After declining for the last 4 years, the U.S. birth rate flattened out in 2012 relative to 2011 with just under 4 million babies being born in both years. This maintains the number of U.S. births per 1000 women aged 15-44 at 63, its lowest level since records have been kept.
But they may go even lower in 2013. As the chart below shows, preliminary numbers from the U.S. Centers for Disease Control indicate 2013's fertility may decline slightly compared to 2012.
Historically birth rates have declined during periods of economic stress such as the great depression and the major 1970s recession. But once the economy picked-up, so did birth rates. Because of this, demographers have been predicting birth rates would increase as the economy recovers from the Great Recession.
But they haven't, even though the recession officially ended 4 years ago.
We think a key reason birth rates aren't bouncing back is economic insecurity due to increased economic turbulence.
Globalization, automation, rapid technological change and other social and economic shifts have made the world more volatile, uncertain, complex and insecure. Companies have responded to this turbulence by becoming more agile and flexible and reducing their long term commitments and fixed costs.
We think people are responding in a similar way.
Children are definitely a long term commitment. They also reduce your agility and flexibility. And they are expensive to raise.
Given how insecure employment is today, it's no surprise Americans are choosing to have fewer kids.
In addition to the falling birth rates, young adults are also saying they aren't as likely to have children as prior generations. Research from the Wharton School at Penn shows less than half of millennials (born 1980-2000) think they will have kids. This is down from a similar 1992 study which found 75% were planning on having kids.
Millennials started adulthood during the recession. Clearly economic turbulence and insecurity is having a big impact on their thinking. They may change their minds as they get older, but their survey responses coupled with birth rate data is a pretty clear signal birth rates may stay low.
This is an important trend to watch. If U.S. birth rates stay low it will have a major impact on a wide range of industries, government programs and overall economic growth.