Thursday, April 23, 2020

econlife - Coronavirus, a Baby Boom, and a Divorce Spike by Elaine Schwartz

Coronavirus brings us closer together and farther apart. It can spike births and divorces.

Coronavirus Impact on the Birth Rate

Conventional wisdom tells us that people create more babies when they are confined to their homes. However, a new paper conveys a different story. Nine months after an epidemic, where death rates soar, birth rates plummet. But then, we have a rebound in baby deliveries. The number of births goes down nine months after an epidemic and then it goes up:

It might depend though on the severity of the event.  Only those that are more severe have a delayed impact on the birth rate. When there are mild advisories about an imminent storm, birth rates rise. But not when the danger is massive.

For the coronavirus pandemic, we can expect, except for China, that birth rates will rebound. With or without the pandemic, the U.S. fertility rate is down. At 59.1 births for every 1000 women,  it has been descending for four years.

Coronavirus Impact on the Divorce Rate

The statistics are even less definitive for the divorce rate. Some anecdotal evidence tells us that the divorce rate in the Chinese city of Xi’an was up in response to the virus. After initiating an appointment system on March 1, on March 4 and 5, they hit their daily max at 14 appointments. One official hypothesized that the reason could have been being locked up at home together for a month. He did also point out though that they had been closed for a month. So, I wonder if there was some pent-up demand.

When researchers have gathered the stats, they’ve concluded that divorce rates fall after a manmade disaster and rise after one that is natural. Using 9/11 as their manmade disaster example, they point out that most people’s lives were not threatened. As a result, the disaster did not increase everyday stress. A natural disaster, though, could be just the opposite because it brings more tension into the home. After Hurricanes Karina and Andrew, local divorce rates went up. In Dade County, Florida the spike was 30 percent after Hugo.

Our Bottom Line: Externalities

An externality refers to the impact of an activity or a contract or a decision on an uninvolved third party. Good and bad, externalities can be positive and negative. A vaccine creates a positive externality while water pollution results in the negative ripple. For the coronavirus, we have a cascade of results that can become positive and negative externalities. They include a depressed or accelerated birth rate and divorce rate.

My sources and more: Thinking of past econlife posts on births and blackouts, I checked for the coronavirus connection, and, in this paper, Quartz, and IFS I found some possible (not definitive) answers. From there, researchers also cite a spike in the divorce rate, perhaps confirmed by a Chinese news report. But if you just want to read about falling fertility rates, the NY Times had the facts.

Please note that my definition of externality was in a previous econlife post and our featured image is from Pixabay.

Ideal for the classroom, reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.