Northern Economist 2.0

Wednesday, 1 August 2012

The North's Economy and Births: Bad Times Lead to Fewer Babies

The link between the economy and the number of births is an important one in both demographic and economic analysis.  One view maintains that a poor economy breeds uncertainty about the future and in turn results in families postponing children and therefore a reduction in both the number of total births as well as the birth rate.  Another view maintains that a poor economy reduces the opportunity cost of having children – that is, if you do not have a job, why not use the time to start a family – and the result would be a higher birth rate.  A lot of recent evidence from the current recession suggests that a poor economy results in fewer births. For example, the Economist Magazine recently chronicled a recent drop in fertility rates amongst European countries hit hard by the recession.

Figure 1 


In Ontario, a comparison of Ontario with its North – the chronic poor economic performer – also suggests that a more buoyant economy results in more births (Figure 1).  Using birth data from Statistics Canada, it appears that after a period of decline in the 1990s, total births in Ontario have been rising since 2000.  Between 2000 and 2010, total births in Ontario rose by 13 percent.  Meanwhile, between 2000 and 2010, the total number of births in Northwestern Ontario declined by 9 percent while the number in the relatively more prosperous Northeast (which had robust mining activity and a less severe forest sector downturn) actually grew by about one-half of one percent. 

Figure 2


If one looks at total births in Northern Ontario by region (Figure 2), many regions have stayed relatively flat in terms of the total number of births, some have declined and one in particular – Greater Sudbury and Nipissing – have seen increases over the last decade.  Indeed, much of the growth in the number of births that has occurred in the Northeast has been over the last five years reversing the declines of the late 1990s.  Between 2005 and 2010 (Figure 3), with the exception of Manitoulin, all the regions of Northeastern Ontario have posted increases in the number of births with the largest percent age increases being in Nipissing and Greater Sudbury.  Meanwhile, the Northwest has seen declines in the number of births in Rainy River and Thunder Bay and an increase only in the Kenora District.

Figure 3


Based on the total number of births as an indicator of economic opportunity and optimism, it would appear that over the period 2005 to 2010, the economy performed reasonably well in much of Northeastern Ontario relative to the Northwest.  In the Northeast, the Timiskaming and Manitoulin regions seem the most depressed while in the Northwest, Rainy River is in particularly poor shape especially relative to the Kenora region.  Nevertheless, the economy of the Northwest has begun to move beyond the forest sector downturn.  Given the improvements in the economy as a result of growing mining activity in the Northwest that have been occurring over the last two years, one thing we can expect in the future in Northwestern Ontario is an uptick in the number of births. Who knows, maybe in Thunder Bay they may actually find they need more schools after the slew they closed over the last decade.