The National Bureau of Economic Research has just released a working paper arguing that pregnancy rates predict whether the economy is going to fall into recession in the near future.
It’s worth considering what a recession is. Different schools of economics will varyingly insist that this or that causes them, or even that they cannot happen at all — those latter ones are wrong. One part where John Maynard Keynes was right is that they come about because of a change in confidence (Well, some of them do). For it is true that if we all think the future’s going to be gloomy, then it will be so.
If we think in six months’ time everything will be just peachy, then we’ll spend today as if our incomes will be going up when we’ve got to pay off the credit cards. Equally, businesses will invest to capture that wondrousness. This goes into reverse if we’re gloomy: We’ll not spend, business won’t invest. Either way around, the results are that our views create that future. This is, in part at least, the “animal spirits” that Keynes talked about: Us all having a touch of the glums really can cause a recession.
It’s not a huge leap from there to the idea that people optimistic about the future will plan to have more children — more than when we’re all gloomy about how we’re going to afford even bread for the table. So, our result accords with basic intuitions and there’s little reason to think that it isn’t true. For proof, of course, go read the full paper.
My own thought is that there’s something much more interesting here. This from the CNBC report on it:
The research into this correlation is the first of its kind, and no prior work on fertility has produced this conclusion.
That could, of course, be because no one has studied the potential connection before. But I doubt it. Rather, it’s a new thing. A function of the manner in which conception is controlled these days.
Sure, we’re humans, we’re all pretty interested in sex and the rate at which it happens across the population doesn’t change all that much. Yes, hospitals turn entire floors into maternity wards nine months after a power outage, but other than that, there’s not so much variation in the having sex bit. Our interest in it comes from the manner in which we’re all descended from a long line of people who had an interest in having sex, of course.
But it’s only in these recent decades that the link between conception and sex has been broken. Not entirely and completely, but enough that population changes in birth rates or reported pregnancies are due to contraception and its use or not, not how heavy the petting gets in the backseat at the drive-in. That is something new in human history. This is thus a new effect.
This is a testable proposition as well, and my intuition is that if we looked for this effect before, say, 1980, perhaps 1970 (yes, the pill existed before that, but effective contraception wasn’t universal), then we wouldn’t find it.
Which is odd and interesting to my mind. The invention of the pill has aided in making recessions predictable. Who, really, would have thought that would be a consequence of it?
Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at The Continental Telegraph.
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