People made a lot of babies during the pandemic

A new study finds the pandemic led to an increase of births among American-born parents.

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a senior reporter and certified personal finance counselor at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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U.S.-born parents experienced a baby boom in the midst of the COVID-19 pandemic. Fertility rates had been dropping since the 2007 Great Recession, but the 2021 “baby bump” reversed that trend, a new study finds.

The study, published by the National Bureau of Economic Research, found the pandemic led to a net increase of 46,000 births among U.S.-born parents. While the study did not isolate the reasons for the fertility increase, the authors found it was especially pronounced among women with a college degree. These women likely benefited from greater workplace flexibility as many jobs switched to work-from-home arrangements, says Hannes Schwandt, a health economist at Northwestern University’s School of Education and Social Policy and an author of the paper.

“These results suggest that relaxing time constraints and career demands that highly educated women face can help them balance their work and private lives and allow them to have the children they may desire,” he says.

The COVID-19 baby bump

While U.S. fertility rates declined in 2020, most of the decline was concentrated at the very beginning of the pandemic, among parents born outside of the country. This suggests the drop may have reflected travel restrictions, rising health concerns, and the loss of economic opportunity for migrants. In contrast, U.S.-born parents showed little sign of a baby bust, the study finds. 

Birth rates exceeded pre-pandemic trends among U.S.-born women in 2021 and 2022, a sign that conceptions rose in May and June 2020, and have remained higher than before the pandemic began. 

The authors say the estimates show the importance of foreign-born parents in raising U.S. fertility rates. They also show the impact of the availability of child care and work-from-home arrangements. Conditions after the pandemic made it much easier for college-educated women in particular to have children, especially those who didn’t already have kids, since they had more flexible schedules and didn’t have to worry about schooling or child care for older kids.

Money moves for new parents

If you’ve experienced your own baby bump, there are a few things to add to your to-do-list to make sure you're financially fit enough to afford the expense — about $13,000 a year by one estimate.

  1. Redo your household budget: You’ll have new expenses like child care and recreation, and you can expect your grocery budget to grow. 

  2. Bulk up your emergency fund: In the event you lose your job or experience some other income loss, your savings account will have to feed an extra mouth, so raise your savings rate.

  3. Protect your finances: Speaking of income loss, make sure your family is financially secure if you die or get disabled. The birth of a child is a great time to shop for life insurance, and you should also consider a disability insurance policy to replace your income in case you can’t work.

  4. Save for college: With President Joe Biden’s plan to forgive a portion of student loan debt held up in court, there’s no sign that the cost of college will ease any time soon. A tax-advantaged 529 college savings plan is a good place to put your future scholar’s tuition money. Every bit helps.

  5. Don’t neglect your own savings: With all these added expenses, it can be easy to forget your own goals, like retirement. But even 1% of your income can grow a lot over time if it’s invested properly, so don’t let your 401(k) or IRA gather cobwebs while you're parenting.

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