It would appear that the severity of the global recession is affecting fertility rates in many countries. The fertility rate as measured by the number of live births per woman in Europe has dropped substantially in a number of countries according to The Economist. These results suggest that rather than lowering the opportunity cost of having children, recessions create the economic uncertainty that makes those about to undertake breeding much more skittish and therefore more likely to postpone childbearing. Unemployment and enchanted romantic evenings are not positively correlated.
Canada has of course continually maintained that it has been weathering the recession more successfully so is there evidence to this effect from our fertility rate? Well, Canada’s fertility rate (as measured by children per woman by Statistics Canada) has been rising from 1.54 in 2005 to 1.68 in 2010 though the increases have been small since 2008. What is actually more dramatic is the evidence from the total number of births. As the accompanying figures show (Figure 1), we are in the midst of what seems to be a rather modest baby boom at least by historical comparisons. The birth data is from Historical Statistics of Canada for the 1921 to 1974 period and Statistics Canada from 1971 to the present. The period from the early 1920s through the Depression era saw a decline in the number of total births in Canada followed by a surge starting in 1938 from 237,000 births to a peak of 479,000 in 1959. There then occurred a bust followed by slow growth that peaked in the early 1990s (another recession) and then a sharp decline. However, since 2000, total births started to grow again and went from 327,000 to 386,000 in 2010.
Compare this to the United States. While the fertility rate in the United States is higher than in Canada, it has been declining since 2007. When the total birth data is examined, it shows that since 2007, there has also been a drop(Figure 2). Total births went from 3.891 million in 1996 to a peak of 4.316 million in 2007 when the financial crisis hit. Since the onset of the financial crisis and great recession, total births have dropped in each year and in 2011 sit at 3.961 million – drop of eight percent since 2007. In retrospect, the recovery of the US housing market is likely also being hampered by fewer births and less new household formation. Canada’s housing market is receiving the benefit not only of a better performing economy and low interest rates but also the stimulus from a rising total number of births and the household formation it entails.
Total births can also provide a crude snapshot of optimism and opportunity on a regional level. If we create an index of births for each province with 1996=100 and plot, you get a pretty good picture of where the opportunity is in Canada (Figure 3). Total births in the Atlantic provinces and British Columbia are generally below where they were in 1996. Quebec, Ontario and Saskatchewan are above where they were in 1996. Alberta is ahead by leaps and bounds with total births in 2010 over 40 percent higher than in 1996. There are substantial differences even within provinces. For example, economically depressed Northern Ontario has seen the total number of births drop since 1996 while Ontario as a whole has seen an increase. Within the North, the relatively more buoyant Northeast saw a smaller percentage decline than the forest sector ravaged Northwest.