Want To Predict A Recession? Measure The Amount Of Baby Making With These Tricks.

By Cheryl Truman
Lexington Herald-Leader

WWR Article Summary (tl;dr) Can a baby bust foretell a recession? Is a pregnancy a vote of confidence in the economy? Some researchers are tackling the subject.

Lexington Herald-Leader

How do you feel about having a baby?

The answer to that question may be a predictor of the next recession.

A University of Kentucky professor, Steven Lugauer, is one of three authors of a new working paper for the National Bureau of Economic Research that suggests potentially child-bearing people have a gift they don’t know about, the ability to forecast a recession.

They do it by not getting pregnant, sometimes a year or more before the recession starts. That has been true for the last three recessions, which began in 1990, 2001 and 2007.

It’s not known exactly why people do this.

“Our work raises the question of whether non-traditional indicators, like conceptions, might be used for the purpose of forecasting,” the paper says.

The authors note that tracking conceptions in real time could be aided by using scanner data on retail purchases related to fertility and pregnancy, such as pregnancy tests and menstrual products.

“We are not arguing here that a decline in conceptions causes a recession,” the paper says. “Instead, we think that the factors behind the last three recessions also had a profound (and very rapid) effect on decisions. In fact, these factors seem to have impacted fertility decisions before large parts of the economy.”

The factors behind the recession had a fast and profound impact on conceptions and could be viewed as “a proxy or early warning for whatever shocks did create the recession,” the researchers argue.

Consider the “Great Recession” of 2008. The autumn of 2007 saw all-time highs in several stock markets, although the problems in the sub-prime mortgage market were starting to emerge.

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