Monday, November 21, 2011

2012-2015: lucky years to have babies in the US.

In his book Outliers, Malcolm Gladwell notes that the generation of Americans born during the Great Depression ( when the birth rate in the US was the lowest on record) did really well economically. They studied at schools and colleges that were less crowded; they got good jobs working for the Baby Boom generation families, and etc. Now, with the Great Recession entering its 5th year, we see a similar birth rate troff:
(Nov 21, 2011. BusinessWeek) - The number of births fell to an estimated 4 million last year, the fewest since 1999, according to National Center for Health Statistics data. American families -- whose finances have been hurt by high unemployment, falling home prices and low pay raises -- lack confidence to plan for “explosions in spending” required by a new child...
By 2015, women in their childbearing years may average 1.75 babies each, a 30-year low, while “ Americans still believe that two or more children is ideal,” said Bradford Wilcox, a sociology professor and director of the National Marriage Project at the University of Virginia in Charlottesville. 
Taking into account that "The annual cost of raising a child ranges between $11,880 and $13,830 for a two-parent family earning $57,600 to $99,730," parents who plan to have kids now will presumably get an immediate hit, but their children will gain a long-term advantage over other age cohorts. Further, housing prices for families with kids will soon be the lowest in a generation, which will also add to the advantage. 

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