People are less likely to have kids when unemployment is high.
A chart from a new Goldman Sachs note on “Millennial Mums” shows the historical relationship between changes in birth rates and changes in unemployment. From the late nineties through the Great Recession, this relationship was very strong: big increases in unemployment were associated with big decreases in births, and big decreases in umemployment happened at the same time as big upward jumps in the number of births.
During the present recovery, however, that relationship is weaker: While the labour market has been improving for millennials since 2011, there hasn’t been a big increase in birth rates as happened during the post-2001 recovery.
The light blue line shows the change in the number of births to parents between 20 and 34 years old over the last year, and the darker line shows an inverted scale of the change in the number of unemployed people in the same age bracket.