The Impending Pandemic Baby Boom?

There’s been a lot of talk of a baby boom due to the pandemic. It’s fun to speculate, but will it really happen?

Yes, but it probably won’t happen quite how many expect it will.

We expect to see a baby boom initially within specific demographics beginning in the 2nd half of 2021, before a general boom across the board in 2022. With the end of the pandemic in sight, the boom will be primarily driven by psychological reactions to the pandemic — offsetting any short-term economic factors that might otherwise put downward pressure on birth rates. The first half of 2021 will see lower overall birth rates as people delayed family planning in 2020, a temporary, broad-based “baby bust”. We’re about 10 months into the pandemic now, and we’re seeing slightly lower birth rates (for now), in response to the fewer conceptions earlier in the pandemic.

Just like some economists expect a “K-shaped” economic recovery, we anticipate a temporal “K-shaped” baby boom. By the 2nd half of 2021, birth rates among middle or upper-class workers able to shift to remote work will rise more than enough to offset the baby bust in early 2021 while those whose families were hit harder financially, push off family planning a bit longer.

Firms with a younger (average age <40 years old), mostly remote workforce should anticipate an uptick in employees having children to well above historical rates by the third quarter of 2021. This boom should sustain itself for several years before returning to long-term trends.