Baby Bust? COVID-19, Fertility Rates, and the U.S. Economy

Family during COVID-19

In March 2020, states began to issue the first-round of shelter-in-place mandates to quell the spread of COVID-19. The American education system and workforce shifted into a new realm of working from home; or worse, individuals temporarily or permanently lost their job altogether. Many expected the increased amount of time romantic partners spent together would result in a “baby boom,” similar to the spike in births nine months following power outages, blizzards, and other temporary disruptions. This could not be further from the truth.

Historical Connections

COVID-19 poses unique threats to the U.S. economy and national fertility rates. Nonetheless, to say this pandemic is unprecedented is an overstatement. The Spanish Flu, Great Depression, and Great Recession are applicable case studies that relate to COVID-19 and the U.S. fertility rate. Unlike COVID-19, which has most severely impacted the elderly and immunocompromised, the 1918 Spanish Influenza targeted children aged 0-5 and healthy, young adults in their 20-30’s.

While the Spanish Flu did affect birth rates and created a “post-pandemic dip,” it recovered with an “increase in late autumn 1919 and early spring 1920,” surpassing expectations and not dipping below irrecoverable levels. The Great Depression and the Great Recession led to high-levels of unemployment, reaching 20% and 9.5% unemployment rates respectively. In each instance, fertility rates dropped well-below replacement levels, resulting in increasingly prolonged periods of a baby bust.

Current Cultural Considerations

COVID-19 impacts each aspect of the American family, “altering marriage markets, attitudes towards non-marital childbearing,” and the degree to which individuals may choose to delay or forgo childbearing altogether. Moreover, as marital instability and low-childbirth rates are correlated, “in 2018, marriage hit a record low, with the U.S. fertility rate also decreasing a new low of 1.73” children born per woman with firms like Demographic Intelligence anticipating declines as low as 1.7, which is well below the replacement level of 2.1. Interestingly, the last time that birthrates were at replacement level in the United States was 2008, prior to the Great Recession, which means that American’s have forgone over seven million babies since then and should replacement levels remain at “2020 levels for the next decade, individuals will forego nine million children by 2030.” As women are delaying childbearing until later in life, when they have attained economic and relational security, statistics suggest that “catch-up fertility” is not high enough to mitigate the negative effects of the growing delay on birth rates.

Following the research of Lyman Stone, the impact a specific crisis may have upon birth rates can be calculated by taking the case-fatality rate percentage and the rate of disease spread (R0) into account. High rates of infection coupled with low case-fatality rates increases the number of collateral survivors, such as the case with COVID-19, who despite surviving the virus, are left with economic instability and fear such that they will be much more likely to delay or forego childbearing. It is actually better for birth rates if the case-fatality rate is high and the rate of infection is low, since there are fewer affected people. Death and birth rates are closely related. For example, the Ebola outbreak in West Africa caused a very small dip in fertility rates, hypothetically due to the fact that the fatality rate was 40% and the rate of infection was low, infecting only 50,000.

Economic loss and instability, paired with the health and safety concerns warranted by COVID-19, are correlated to a decline in births (and marriages). For example, a “one percentage-point increase in the unemployment rate is associated with a 1.4% decrease in birth rates,” with a one percent state unemployment increase leading to as high as a 2.2% decrease in birth rates. Given previous crises, birth rates begin to increase 10-11 months post epidemic; COVID-19 poses a unique threat. It is unclear when a vaccine will be available or whether a second round of ‘shelter-in-place’ mandates will be issued. Individuals may be unsure when they will consider themselves “post-crisis” and feel economically and socially secure to consider childbearing. Nonetheless, COVID-19 presents the opportunity for new policy proposals which have the potential to positively affect fertility rate outcomes in the United States.

“Policymakers worry about these empty cradles because of what it means for the economy (dramatically slower growth, loss of economic dynamism, rising inequality), public programs (underfunded pensions, overburdened health systems, collapsing local governments), or even national security (fewer potential soldiers).” In a healthy society, the percentage of births as compared to the greater population, would create a right-side-up triangle, or a rectangle at best. Meaning, that the amount of children born would be greater than or equal to the amount of adults in the nation, especially those entering into retirement. A flourishing economy and social security pensions rely on the sheer amount of children in the upcoming generations to sustain them. Currently, with fertility rates as low as 1.7, the percentage of births compared to the aging population represents an upside-down triangle, with far more people to support economically than there are currently children born. This impacts the life and livelihood of the United States on every level.

Policy Response

In response to this growing phenomena, it is paramount to stress pro-natalist policy. To do so, one must keep economic, cultural, and public health concerns in mind. Whereas middle and upper class couples tend to have fewer children, lower/working class people produce greater numbers of children. The gap in supporting fertility rates in the United States lies in encouraging a societal shift towards child bearing and providing the necessary economic encouragement.

The laws in the United States play a normative role in forming the values and character of society towards a certain kind of person. To rightly address and overcome low fertility rates, proper policies must be implemented which encourage childbearing. I submit the following policies for your consideration as possible means of reflecting the cultural value of children by alleviating the economic barriers.

First, the elimination of “marriage penalties” could be beneficial in encouraging marriage and, subsequently, children. The Family Research Council (FRC) notes that poor and working-class families also face marriage penalty burdens, as their tax is increased at a faster rate than income. Thus, current and potential married couples could be financially alleviated through adopting policies such as “income splitting,” where half of the couples’ joint income would be attributed to each spouse, thus ensuring that they wouldn’t pay higher taxes than two people on the same income would. This could especially be beneficial in COVID-19 in that many people, particularly those of the working class, have been laid off from their jobs, and ultimately have a positive result on raising fertility rates.

Secondly, and especially during COVID-19, child tax credits must be increased. Current credits under the “Tax Cuts and Jobs Act” go up to $2,000 per dependent child. Yet proponents such as Senator Mike Lee have called for a greater credit in the past, being one of $2,500. In a time when government handouts are plentiful, it would be beneficial to increase these credits  to benefit families and children, which in turn would create financial stability for families and potentially raise fertility rates.

Lastly, affordable housing is vital to the success of a family. To most, housing is a serious cost that can be unaffordable and seem like a roadblock to starting a family. One strategy that could be implemented to policy would be encouraging landlords/owners to offer lower/subsidized loans to tenants in exchange for the owners compliance with existing affordability requirements. As Brookings notes, the housing markets that operate under such landlords disproportionately affect minority communities. Making housing affordable will greatly incentivize couples to marry and move in together, thus leading to a culture that may further foster childbearing and family values.

Although COVID-19 negatively impacted fertility rates and the U.S. economy, I am optimistic that family policy will see a resurgence in popular discussion as the nation realizes the grave import of raising fertility rates in the United States.

Special thanks to Lisa Kriegshauser and Noah Collier for their contribution to this article.

Emma Posey is a research assistant and intern for a prominent think-tank in Washington, D.C. where she studies domestic policy, marriage and family structure studies, and religious discourse.