Wednesday Thoughts: So, How About Those Birth Rates?


Did you hear? The birth rate is... "[at its] lowest in more than four decades," and the average number of children a woman will have in her lifetime in the US now 1.64, which is "the lowest rate on record since the government began tracking it in the 1930s." To cash out a prediction that I (and almost everyone) made at the beginning of the pandemic, here's an assessment of what I've learned so far. I predicted a post-lockdown boom in birth rates. Not only was I wrong, but I was wrong on cataclysmic levels. In this piece, I explore why I was wrong and if I should have known I would be wrong when I made the prediction.

To answer the first, it could be the case that I was not wrong...not yet, at least. Maybe it's too early to cash out the prediction because although we've made substantial progress, we are not totally done with the pandemic. Evidence for this reasoning includes India's recent spike in cases and the different variants. That said, giving me an indefinite time frame is quite cheap because I could easily extend it until I get data to fit my conclusion (if I ever do). Further, if it's "not time" to cash out this prediction, then when is? Vaccination is effectively widespread in the United States, and the economic recovery is basically in full swing; in other words, "now" seems like a good time to cash out the prediction. That said, I made errors in weighing evidence of some significant factors, and that was costly.

Economics:

Usually, the birth rate dips after a recession. As much as I am embarrassed to admit, factors like boredom, lockdowns, and physical proximity reduced the weight of this fact. In other words, because of the unusual nature of this recession (being that the broad cross-section of the nation was told to stay home), other forces like one's biological imperative would take hold. I was wrong. However, it is also important to note that "sharp declines in births, followed by rapid increases, have been typical in the midst of historic events that caused mass disruptions to family life, such as the second world war," so maybe I was not wrong after all. A longer time frame would probably make this prediction more correct; as a result, consider this a mini-cashing-in (MCI for short).

There is also reason to conclude that this time might be different. That this time, we might not get a "rapid increase." Having children is extremely expensive, younger people are saddled with more debt than ever before from college loans, and the lockdowns wreaked havoc on people's perception of their income. Keyword, perception. There were two rounds of stimulus checks and multiple months of unemployment insurance such that people had more money than they had while they worked. The nature and length of the lockdowns and the uncertainty in job prospects during the time can dampen the desire to have (more) children.

Technology and Culture:

These recent lockdowns were interesting because they showed the cultural impact of mechanical and cultural birth control mechanisms. More and more women have children at later ages. Here's a graph from the WSJ on the birth rates.

This point is the one with which I am most disappointed. I considered and held it quite strongly, but the weight I attached to it was not as high as it should have been. My rationale was this, it makes sense that people having to contemplate their mortality causes them to reorient their lives. On a broader scale, we might assume that the level of existential alarm will encourage people to procreate; see the baby boom. Now I question that intuition largely because my n=1 (I have only one example of this), the opposite could just as easily be the case, and there might be particulars to that one situation that differs vastly from this present situation. I would stress that this trend is not particular to the United States. In fact, the declining population problem seems to be the biggest issue facing China's sustained growth and Europe's survival.

Finally, looking back, my error in reasoning was weighing these points individually. Considering them collectively would have resulted in a much better prediction. This brings me to the second question: should I have known at the time that I would have been wrong? Yes, actually. Many pieces and pundits I both enjoy and admire were less sanguine about the prospect. This has to have been my most optimistic view to date, and although this is not an uplifting topic, I'm glad reality is what it is, and I can recalibrate. That said, because this is an MCI, I will restate my prediction with a minor update in specificity. Thus, I am 23% confident that by 2024, we should see a slight change in the birthrate up and to the right. I predict between 0.1% and 1%. How did I arrive at the 23% number? Well, my gut.


Certainty rating: 79%



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