If pregnancy rates start to dip, watch out for your investments — the National Bureau of Economic Research (NBER) published a report Monday concluding that a falling conception rate in the U.S. has consistently preceded the economic downturns of the last three decades.
Calling it a "new business cycle fact," the NBER's paper, entitled "Is Fertility an Economic Indicator?" documented its finding that "the growth rate of conceptions declines prior to economic downturns and the decline occurs several quarters before recessions begin."
"Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short-run expectations about the economy than previously thought," the report said.
The research into this correlation is the first of its kind, and no prior work on fertility has produced this conclusion.
The NBER used high-frequency data from birth certificates to examine fertility trends across the 109 million births that took place in the U.S. between 1989 and 2016, tracking their changes in relation to business cycles.
The result was the bureau's stated belief that fertility rates can predict recessions just as well as — if not earlier and better than — conventional market indicators like equity prices and consumer confidence levels.
Basically, the organization is saying that economic contractions can be predicted by falling numbers of an entirely different type of contraction.