Children of the Great Recession: Recent Evidence on the Impact of the Macroeconomy on Fertility and Infant Health

This paper provides recent evidence on the impact of the macroeconomy on fertility rates and infant health. Previous research has shown that infant health improves during periods of high unemployment because women who would have less healthy children postpone childbearing, and women who do have children tend to get more prenatal care. 

This paper extends the literature by examining how fertility and investments in prenatal health respond to unemployment rates during the Great Recession (2007-09).  It also tests whether the results are similar to those from earlier, less severe downturns.

Using data on the universe of U.S. births from 1980-2010 Natality Detail Files, we examine a variety of outcomes. We start by addressing the issue of selection: how do economic downturns affect women’s decision to have babies, and are the affects uniform across socioeconomics, race, and ethnicity?  Next, we turn our attention to the effect of downturns on a wide array of prenatal and infant outcomes, including: 1) women’s demand for own and infant health, measured by risky health behaviors during pregnancy (smoking and weight gain); 2) women’s demand for health care, measured as timing of first prenatal care (PNC) visit and number of PNC visits; and 3) various measures of infant health – birthweight, whether the birth was pre-term, and Apgar score.

Preliminary evidence suggests that women reduce childbearing during economic downturns but the effect is not uniform; during the Great Recession, the fertility of Hispanic women (but not that of White or Black women) fell with worsening unemployment rates.   Results also suggest that there is positive selection in socioeconomic status, i.e. as the macroeconomy worsens women who give birth are more likely to be older (greater than 35), married, and better educated.

However, preliminary evidence from the most recent recession offers little support for the idea that higher unemployment is associated with improvements in infant health, suggesting that results from earlier downturns may not apply to this more severe economic crisis.

These findings are important for documenting the impact of the recent recession and, more generally, for improving our understanding of how health behaviors respond to macroeconomic conditions.