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Finally, that pandemic baby boom many people joked about has come to fruition. You know the jokes, with everyone stuck at home during the pandemic we’ll see a rise in babies because - you know - “they’re bored”?
The National Bureau of Economic Research (NBER) just published a study on birth rates through 2021 (and 3Q22 for California) that found a sizeable increase in birth rates through the pandemic. We’ve seen a few people surprised by this increase in fertility rates, but we here at Parento fully expected it (read our outlook on the Pandemic Baby Boom here). We anticipated a decline in overall births (which was correct) due to drops across all demographics during the pandemic (which was wrong), followed by a rise in birth rates that would more than offset the drop (which was right!).
Birth rates increased overall, and significantly! People are having more kids than before the pandemic.
Birth rates have reversed their long-term downward trend, with particularly pronounced effects amongst certain populations, which could have a notably large impact on the labor force, and amongst a company’s employee population.
We’ll break down what the data shows, and how to interpret the results for your organization, but basically, regardless of your population’s make up, expect more employees to have kids and need to take leave. It’ll just be a matter of how large of an increase to expect.
The NBER leverages data on all women giving birth in the US. For women born in the US (as opposed to foreign-born mothers), birth rates didn’t have a statistically significant decline in 2020, during the height of the pandemic. So, birth rates were essentially flat for them. Whereas they fell for foreign-born women.
For 2021, though, births were up 6.2% relative to pre-pandemic trends for all US-born moms. That’s a pretty significant increase. Notably, the uptick in births offsets 2 years of declining fertility rates. See figure C below, percent deviation among US-born women from 2018 - Q1 2022.
However, the impacts were more pronounced in certain groups than others. Therefore, companies with a higher exposure to those demographics should prepare for an above average increase in future birth rates prior to past years.
What the data shows is that the increase in birth rates in 2021 was larger amongst women who had a first child and those under 25 years old, “suggesting that the pandemic led many women to start their families sooner. The baby bump was also pronounced among women 30-34 and among those ages 25-44 with a college degree or more.” See figure A below, first births among US-born women (source: NBER, 2022).
What about 2022? Importantly, early data from California - the only state for which we can see 2022 trends, indicates birth rates have remained elevated compared to before the pandemic. More people having more kids wasn’t just a one time consequence of the pandemic, it’s a long-term trend.
Okay, now that’s the data overall for moms born in the US, now let’s break it down to understand how current trends might affect your workforce based on its composition.
Spoiler alert, birth rates came up across all ages and education levels. So regardless, prepare for more leaves (and if you don’t have a solution to address parents’ needs when they have kids, more turnover) - but how much more is important.
Fertility rates increased 10% relative to pre-pandemic trends by December 2021. That’s a huge increase, so expect the youngest employees to have more kids than you’re used to.
Women 25-34 years old account for the majority of births amongst US-born women. But for just 25-29 year olds, birth rates rose rapidly starting in January 2021 with a 7% uptick relative to the prior trend lines.
Combined with the slightly younger age bracket, those up to 34 years old account for the majority of births amongst US-born women. Birth rates climbed beginning in January 2021 with a 5% uptick relative to the prior trends.
Women 35-39 years old are much more likely to require “assisted reproductive technology services'' than younger age brackets. Their decline in fertility relative to pre-pandemic trends was the largest in 2020, but climbed 13% above the pre-pandemic trends in birth rates by the summer 2021 - the largest increase of all age brackets. There was no net increase in overall births by the end of the pandemic for women 35-39.
For the first 9 months of the pandemic, there was no change to the rate at which people were welcoming their first baby, but they jumped 8% by the end of 2021.
People having a second child dropped during the beginning of the pandemic but rose sharply in early 2021. For those having a 3rd or higher child, those birth rates declined in 2019 and through the end of 2020. Yet, like those having 1st and 2nd children, rose in 2021, but ended back on their pre-pandemic trend by year end.
A 6.7% overall increase in birth rates seems small, but what’s important isn’t the top number, but what’s happening amongst each demographic.
For instance, if you have a predominantly college-educated workforce with a median age under 40, you’re going to see much higher increases in birth rates relative to prior years. You should expect an increase in birth rates of 10% or more amongst all employees of those demographics - regardless of gender.
A 10% increase in birth rates still seems small, but across 1,000 college-educated employees aged 25-34, that will likely result in 8-12 more births per year.
While the study reviewed only women giving birth, don’t forget in the vast, vast majority of cases there’s a partner. So, expect increases in partners welcoming kids, and since the study didn’t review men and partners; keep things simple and assume an equal increase in birth rates amongst men and non-birth parents.
The data shows there was no overall baby bust during the pandemic amongst US-born women. Women born overseas did have fewer births, but likely due to trends unrelated to the pandemic as their declining birth rate started before the pandemic.
If the company you work for only has a population of a few hundred employees or less, you may not have seen this increase in birth rates. That doesn’t mean it’s not relevant for you. It’s simply because your population is too small to see statistically significant fluctuations, but you will see a higher average number of people having kids over many years.
So, if you have employees under 40 years old (both women and men), expect a measurable increase in the annual number of them having kids. If you have a workforce that’s mostly college educated, you should expect a higher increase than companies with a lower proportion of college graduates, and a much larger increase overall - assume 10%.
However, if you have disproportionately more women under 25 years old or between 30-34 than the US population, they will also have more kids than in years past.
These upticks in birth rates didn’t end in 2021, and have continued through the third quarter of 2022 according to early data, so plan for it!
The rise of remote work and ability to work from home on a flexible schedule reduced the opportunity cost of having children. That likely contributed to the increase in birth rates amongst college educated women, who are more likely to have remote work options. Therefore, if you have a remote pr hybrid workforce, expect an even faster increase in birth rates compared to years past. You may want to assume a greater than 10% increase in birth rates.
First, prepare for more employees having kids, both men and women. Plan now how you’ll support them before, during and after parenthood.
That means greater demand for parental leave, leave administration, daycare funding, etc. That also means more employees and candidates will prioritize family-friendly companies and policies. Enhance those policies now and make them front and center in your recruiting efforts.
If you don’t have a good paid parental leave policy (at least 10 weeks at 75%) for men and women, expect more turnover too!
