Do women planning families know something economists don’t?

The U.S. birth rate has reached a 30-year low, and, according to a recent study, that could signal a looming recession.

A February study into fertility and birth rates found that people in the U.S. cut down on baby-making decisions well in advance of recessions — almost as though anticipating them.

The fact that people postpone expanding their families during recessions is well documented in academic research and not at all surprising, given how much job losses impact such decisions. But the study by University of Notre Dame economists found that conceptions, which start declining months before a recession, could be used as a valid leading indicator.

A recession is defined as two or more consecutive quarters of declines in the gross domestic product and due to inaccuracies of data reporting and revisions is only confirmed after the fact. The Great Recession of 2008-2009 was one of the sharpest since the economic depression of 1930s.

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In the study, Is Fertility a Leading Economic Indicator?, circulated on Feb. 26 by the National Bureau of Economic Research, a trio of authors found that over the past 30 years, conceptions fell at the same time or even before other indicators whenever a recession was about to start.

For example, conceptions peaked in 1998 and 2006, well in advance of recessions and the large decline in conceptions came before the large increase in unemployment. In fact, conceptions worked as well as other economic leading indicators, such as consumer confidence or durables-goods purchases.

U.S. fertility rates have reached a record low, at 60.2 births per 1,000 women of childbearing age, according to the most recent figures from the Centers for Disease Control and Prevention’s National Center for Health Statistics.

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“To some, this is cause for hand-wringing, as concerns arise that low fertility will spell problems for the nation’s economy, while others, concerned about limited natural resources, may look positively on the decline,” wrote Gretchen Livingston, a senior researcher at the Pew Research Center, who wrote about low fertility rates earlier this year.

The general fertility rate is unaffected by the overall population size and share of women of childbearing age, she added. However, “the higher the share of women in their peak childbearing years, the higher the general fertility rate will be, all else being equal — and vice versa.”

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A pretty close correlation between conceptions and the consumer confidence index is not surprising, according to Daniel Hungerman, economics professor at University of Notre Dame and one of the co-authors of the paper.

“Because most of U.S. births are planned, we’d imagine that families discuss their options before making that decision and if they don’t feel confident about their economic situation they delay,” he said.

Authors of the paper argue that factors behind the last three recessions also had a profound (and very rapid) effect on fertility decisions.

“In fact, these factors seem to have impacted fertility decisions before large parts of the economy. In this way, declining conceptions might be a proxy or early warning for whatever shocks did create the recessions,” the paper said.

But just like any other economic indicator, conceptions as an indicator can also provide false positives or false negatives.

The main takeaway, however, seems to be that real-time conceptions data could be helpful in understanding business cycles and economists would benefit from a measuring tool that is as valid as other leading economic indicators.

This story was originally published on Feb. 26, 2018 and updated on May 17, 2018.