Cohort effects and the downturn in US fertility since the Great Recession

There is an excellent new article in the Journal of Economic Perspectives (open access, with a less technical summary here) by Melissa Kearney (University of Maryland), Phillip Levine (Wellesley College), and Luke Pardue (University of Maryland) on fertility rates in the U.S. In particular, the article looks to explain this puzzle (from their Figure 1):

The figure tracks the period fertility rate - the number of births per 1000 women of childbearing age (15-44 years) in each year. Notice that the trend is reasonably flat from 1980 to 2007, and then the trend turns sharply downwards after that. Recessions are known to generate short-run decreases in fertility, and you can see the recessions in the early 1980s and 1990-91 quite readily. But after those recessions, the birth rate climbs back up to the trend. Not so with the Great Recession, with birth rates continuing downwards for more than a decade, despite the end of the recessionary period.

Kearney et al. do an excellent job of unpacking the available evidence on how U.S. birth rates have changed. They start by looking at different demographic groups, and find a dramatic decline in births to teenage mothers. However, that change predated the Great Recession, with teen births trending downwards since the early 1990s. At other ages, since 2007 there has been a decline in births to mothers in their 20s, and a slowing of the previous increase in the number of births to older mothers. Decomposing the change in births over time by demographic group (age, race, and education level), Kearney et al. find that:

...changing birth rates within demographic groups is responsible for the declining birth rate since 2007, not changing population shares. From 2007 to 2019, the birth rate declined by 10.8 births per 1,000 women 15 to 44 (from 69.1 to 58.3)... Across all groups, had birth rates been constant and only population shares shifted between 2007 and 2019, the birth rate would, in fact, have risen by 2.6 births per thousand. On the other hand, if population shares were held constant and only within-group birth rates moved over that period (the change captured by the first term), the overall birth rate would have fallen by 12.8 births per 1,000 women...

The three teen categories by race/ethnicity explain 37 percent of the overall decline. Hispanic teens contributed the largest share, explaining 14 percent of the overall decline; their birth rate fell dramatically, from 82.2 to 24.7 over the period.

Other demographic groups with smaller declines in their birth rate also contributed extensively to the overall decline because of their relatively large population shares. For instance, the third-largest contributing group is White women between the ages of 25 and 29 with college degrees; their birth rate fell from 101.1 to 65.1, accounting for 11.9 percent of the overall decline.

So, again, the biggest contributors to the decline in births has been a decline in births to younger women, in their teens and 20s. So, what has caused that change? Kearney et al. look at a variety of policy and economic variables, and find that:

...when we sum the estimated coefficients on our ten economic/policy variables with their average change between 2007 and 2018, their combined effect is 6.2 percent of the total decline in the birth rate from 69.1 to 58.3 births per 1,000 women age 15 to 34 between 2007 and 2018.

What does that leave? Well, up to this point in the paper, I'd been silently yelling "It's a cohort effect!" And I wasn't to be disappointed, because that's where Kearney et al. turned next. The results are neatly summarised in their Figure 5:

The figure tracks the average number of births for women at different ages, grouped by five-year birth cohort. So, each line tracks all women born in a cohort. The first three cohorts (women born in 1968-72, 1973-77, and 1977-82) are pretty similar. But then things change dramatically. The cohort of women born in 1983-87 had less births at each age than the earlier cohorts. The cohort of women born in 1988-92 had less still, and the cohort of women born in 1993-97 have had even less. Now, given that these more recent cohorts of women have not completed their fertility (they could yet have more babies), it is possible that there will be some catch-up. But, as Kearney et al. note:

...the number of births they would have to have at older ages to catch up to the lifetime childbearing rates of earlier cohorts is so large that it seems unlikely they will do so.

So, what has been causing this generational change in fertility behaviour? Here, Kearney et al. become more speculative (which is the best we can do at this stage), and refer to the 'second demographic transition':

The theory of the second demographic transition highlights instead an overall shift to a greater emphasis on individual autonomy, with a corresponding de-emphasis on marriage and parenthood. The specific manifestations of this shift are taken to include a decoupling of marriage and childbearing, a change in the relationship between education and childbearing, a rise in childlessness, and the establishment of a two-child norm for those having children.

Specifically, Kearney et al. note that, although there was no abrupt change exactly in 2007:

...women who grew up in the 1990s were the daughters of the 1970s generation and women who grew up in the 1970s and 1980s were daughters of the 1950s and 1960s generation. It seems plausible that these more recent cohorts of women were likely to be raised with stronger expectations of having life pursuits outside their roles as wives and mothers. It also seems likely that the cohorts of young adults who grew up primarily in the 1990s or later - and reached prime childbearing years around and post 2007 - experienced more intensive parenting from their own parents than those who grew up primarily in the 1970s and 1980s. They would have a different idea about what parenting involves. We speculate that these differences in formed aspirations and childhood experiences could potentially explain why more recent cohorts of young women are having fewer children than previous cohorts.

It doesn't quite answer the question of why this sudden change occurred in 2007, so it's a little unsatisfying as an ending to the paper. However, this is a very thorough piece of work, and had me wondering about what the cohort effects look like for New Zealand. That might make an interesting research project for a suitably motivated Honours student.

[HT: N-IUSSP]