A paper by NBER Dettering and Kearney (2023) Unemployment was found to affect fertility and birth outcomes. Using birth outcome data from the National Center for Health Statistics, local unemployment rate data from the U.S. Bureau of Labor Statistics Local Unemployment Statistics, and proportion of mobility-restricted households data from the Consumer Financial Survey.
Using these data, they found that each percentage point increase in the local unemployment rate lowered the fertility rate by about 1%, largely due to mobility constraints. More generous unemployment insurance moderated the fertility impact.
A 10% increase in the unemployment insurance replacement rate reduces the negative impact of unemployment on fertility by about 0.5%, so unemployment has no effect on fertility when 100% of lost income is replaced by unemployment insurance.
Babies born during periods of high unemployment were more likely to be born prematurely but also less likely to have low birthweight, the analysis found. However, the latter outcome may be driven by selection bias (i.e. those who decide to have children during periods of high unemployment are more likely to have relatively higher incomes).likely to earn more
The authors then examine the potential impact of unemployment insurance on birth outcomes:
The analysis found that more generous unemployment insurance could mitigate the negative effects of unemployment on infant health. Without unemployment insurance, for every 1 percentage point increase in the unemployment rate, the proportion of low-birth-weight infants would increase by 0.17 percentage points, and the proportion of premature infants would increase by 0.43 percentage points. A UI replacement rate of approximately 75% will completely offset these negative effects. On average, that’s $383 per week, or $17,000 for a full-term 44-week gestation. Birth hospital costs for preterm infants covered by Medicaid were $42,000 higher than for full-term infants, implying that the net social return to providing such UI benefits would be positive.
