Economic reaction to Covid boosts birth rate

The number of births in advanced economies has generally recovered to the level it had before the coronavirus pandemic, an analysis by the Financial Times shows – a recovery that experts say is due in part to stimulus policies put in place to mitigate the impact. economic crisis.

The number of births began to fall sharply in late 2020, after Covid-19 took root and people were confined to their homes, exacerbating an already dangerous demographic trend of population decline in rich countries.

The trend mirrored population declines during the 1918 flu pandemic, the Great Depression and the 2008 global financial crisis. But an analysis of national data shows a rapid recovery in most developed countries.

“The short-term decline in the number of births in many countries is consistent with other historical crises, but in the case of Covid-19, the decline was very short-lived,” according to the UN.

This was largely due to government spending and efforts to produce and distribute Covid-19 vaccines.

The economic uncertainty caused by the pandemic was “counterbalanced by stimulus packages and expansive reactions from central banks,” said Klaus Prettner, professor of economics at the University of Economics and Business in Vienna.

The effect of the pandemic

When many countries began imposing lockdowns to combat the pandemic in early 2020, sexual activity declined, according to a survey by French public opinion polling institute Ifop.

From the end of 2020 to the end of the first half of 2021, nine months after the first lockdowns, many countries, including China and France, reported the lowest number of births in their recent histories. Italy had fewer births in 2021 than at any time since the country’s creation in 1861.

The fertility index is a projection of the average number of babies a woman will have in her lifetime. Demographers generally take as a criterion that a country’s population can only grow without immigration if couples on average have at least 2.1 children. Many of the developed economies already have fertility rates well below this.

Kate Choi, director of the Center for Research on Social Inequality, said people tended to have fewer children when faced with “an enduring catastrophic event that results in a high level of uncertainty.” Covid-era couples “may not want to bring a child into the world if they don’t know where their next paycheck will come from,” she said.

But the number of births began to recover later in 2021, in places like the United States, Scandinavian countries, Australia and Israel — returning to, and in some cases exceeding, the pre-pandemic trend as part of what demographers describe it as a catch-up effect.

In England and Wales, the number of births dropped by 5% in the first half of 2021, compared to the same period in 2019. By the end of 2021, the two countries were registering their first increase in birthrates since 2015.

After experiencing a sharp drop in the number of births, Spain recorded more births in March and April 2021 than in the same months a year earlier. In Germany, there were more births in March 2021 than in any March in the preceding 20 years.

In the United States, the Census Bureau noted that the number of babies born from December 2020 to February 2021 was unusually low, equivalent to 763 fewer births per day in December. “This was probably a result of the Covid-19 pandemic,” said demographer Anne Morse of the Census Bureau.

But in the second half of 2021, the United States recorded a similar number of births to the period in 2019.

Population experts and economists credit the monetary and economic stimulus provided by many governments in the first few months of the pandemic as a crucial factor in helping to prevent a more lasting decline in birth rates.

Karoline Schmid, who heads the fertility and population aging section at the UN Department of Economic and Social Affairs, said stimulus initiatives played a role in preventing a sharp drop in fertility rates by providing financial protection against economic uncertainty.

“Fertility declines during and shortly after economic downturns are caused by couples delaying childbearing due to higher unemployment, greater job insecurity and reduced household income,” she said. “Monetary stimulus from the governments of some countries helped to prevent sharp declines in fertility at the beginning of the pandemic.”

The “baby bust”

But that still leaves the planet facing the same demographic ticking time bomb it faced before the pandemic: declining fertility rates that threaten to slow global growth and force countries to face the cost of aging populations.

The world fertility rate peaked in 1960 and has been in free fall since then. As a result, demographers believe that, after centuries of strong population growth, the world is on the brink of a natural decline in population.

According to a study published by the medical journal Lancet in 2020, the world population will peak at 9.7 billion people in about 2064 and then fall to 8.7 billion at the end of the century. There are 23 countries that are expected to halve their populations by 2100. The Japanese population will drop from a peak of 128 million in 2017 to less than 53 million. Italy’s from 61 million to 28 million.

Low fertility rates set off a chain of economic events. The reduction in the number of young people results in a smaller workforce, affecting tax revenues, pensions and social security contributions.

“An economy with a labor shortage problem can experience higher labor costs, declining productivity and falling standards of living,” Choi said.

Christopher Murray, one of the authors of the study published by the Lancet, said it was difficult to overestimate the economic and social impact that a decline in fertility can have.

“We have to reorganize society,” he said.

But the future doesn’t have to be apocalyptic. In addition to the widely reported benefits to the environment, the decline in fertility could lead governments to invest more in education, according to Prettner.

“When fertility rates fall, governments have more resources to spend on education,” he said. “Many of the negative economic consequences that a decline in fertility would have can be offset by the increased productivity that children [beneficiadas pela educação melhor] will later have on the job market”.

Translated by Paulo Migliacci