Did You Know: People Conceive Fewer Children Before Recessions – Here’s Why

As mothers are honored around the country this weekend, one expert says we should also keep an eye on mothers-to-be, as their numbers foretell the strength of the economy.

“You would think that people would begin to put off having kids after a recession has already begun,” says Matt Lampert, director of research at the Socionomics Institute (www.socionomics.net) and contributor to such books as The Socionomic Theory of Finance.

“But the data show that people in the aggregate actually tend to start conceiving fewer children before the onset of recessions.”

If that sounds counterintuitive, consider this: Just recently, the National Bureau of Economic Research posted a working paper that showed declines in conceptions preceded the three most recent U.S. recessions. That study confirmed similar work that one of Lampert’s colleagues, Robert Prechter, conducted 19 years ago. Prechter charted data from the U.S. Department of Health and Human Services and the Dow Jones Industrial Average going all the way back to 1908.

The data revealed that conceptions tended to rise and fall with the stock market. In fact, they were especially in sync with the advance-decline line, a measure of stock market breadth.

“Like the stock market, pregnancies are a leading economic indicator, typically sounding the alarm well before the economy contracts,” Lampert says.

Why is that? Prechter’s socionomic theory, which motivated his research, proposes that trends in social mood regulate trends in social behavior, including those in conceptions, the stock market and economic growth.

Here’s how that all adds up to fewer pregnancies prior to recessions:

  • When we’re upbeat. A positive mood prompts feelings of friskiness, daring and confidence, Lampert says. “That inspires people in general to have more children, to send the stock prices higher and to become more productive economically,” he says.
  • When we’re downbeat. A negative mood prompts feelings of somberness, defensiveness and fear, Lampert says. “The result is that, overall, people are inclined to have fewer children, to send stock prices lower and to become less productive economically.”
  • Why the economy lags the “conception indicator.” “Because people generally can express their friskiness in their trading accounts and in bed sooner than they can expand or contract business, trends in stocks and conception tend to lead trends in the economy,” he says.

At the conclusion of his 1999 study, Prechter noted that conceptions at that time had been falling in recent years despite a growing economy and a mania for stocks on Wall Street. That foretold of trouble ahead, and sure enough, the dot-com collapse began the next year.

“We find ourselves in a similar situation today,” Lampert says. “Births have declined as stocks have soared and the economy has grown. Millennials are delaying marriage and having fewer children.” It sounds like if history is any guide, the economy may soon have contractions of its own.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.