Will the Recession Inspire a Baby Bust?

On Slate's The Big Money, author Lauren Sandler argues that there is an overlooked line of business blossoming in the recession: The birth control industry. She reports that sales of condoms and morning-after pills are rising, along with interest in vasectomies. Since a single child born to middle-income parents costs, on average, $11,000 a year for the first couple years of his life, one can understand parents' reluctance to procreate.

But the reality isn't quite so simple, and Sandler overlooks some of the more rigorous work, done by economists, that suggests the relationship between recessions and babies is a murky one at best. One National Bureau of Economic Research paper found that while an increase in the unemployment rate leads to a decrease in fertility, once the effect of the divorce rate and proportion of young marriages is subtracted out, then the higher unemployment rate actually is associated with increases in fertility. One possibility is that women who get laid off, or find themselves under-employed, decide it's a good time to have a baby because they have more time to care for it.

Even those who are scared by the cost in such a tight economy will likely just put off having children, and not cancel their plans altogether. Whether or not that decision to delay having another child results in fewer kids depends heavily on how long the recession lasts -- something that is yet to be determined. 

But that doesn't mean that those who do decide to have children won't find a way to do it more cheaply, because many parents tend to buy more than they need to. A recent survey from the classified ads site Kijiji found that parents of newborns spend upwards of $2,500 on baby gear alone, much of which they end up not using or using only briefly. And a different story posted on Slate featured a 29-year-old woman who feared she wouldn't be financially ready to have children for at least another decade, the amount of time she figured it would take for her and her husband to be able to sell their two-bedroom condo and move into a single-family home. She seemed to think such a house was a prerequisite for having children.

If the recession doesn't have the power to put a significant dent in the fertility rate -- and the NBER paper suggests that it doesn't -- then perhaps it could put a damper on the out-of-control spending sprees that seem to accompany so many births.