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Baby Bust: How The Recession Affects Birth Rates

Babies are so 2007.

Back in 2007, birth rates were on the rise and families were expanding. Then the recession hit and *boom* people instantly stopped having so many kids. It wasn’t just the overall recession that triggered the drop on birth rates, though. A new study finds it was the bottom falling out of the housing market that caused couples to put their family plans on hold.

What do housing prices have to do with fertility? Not much at first glance. It turns out, though, that birth rates are closely tied to home prices. As home prices drop, so do the number of babies being born.

Kids are expensive. One of the big expenses in having a kid is housing: you need somewhere to put that baby, and the mountain of stuff that comes with it. You’d think this would make cheaper houses lead to bigger families. But you’d be wrong.

Instead, it turns out that having a home with a highly inflated value makes you feel more flush, and better able to support a large family. As Time reports:

You know how people took out home equity loans to pay for a new car or boat, or just to live beyond their means. Well, Kearney and Dettling believe we were financing baby making as well. People used the rising equity in their homes to finance the cost of having a baby, or perhaps the rising property values gave owners a boost in wealth, at least temporarily, and the perception that they could afford more kids, that non-homeowners didn’t feel.

It’s true that I had both of my kids during the peak of the housing boom. I don’t recall thinking, “Wow! My home equity just went up 10 percent! Let’s have a baby!” It was more like, “I’m in love, I just got married, let’s have a baby!”

But that’s just me. Do you feel like you’re holding off on having more kids until the recession is firmly behind you? Does the price of your home effect how you feel about having babies?

Photo: AMagill

 

 

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