Thread by @lymanstoneky

It also makes a fertility rebound more likely, since reducing debt/savings are core "life cycle" things more than employment or income.

https://twitter.com/markgongloff/status/1382725887255281668

A good model of (intentional) fertility is: "People have children when they feel ready to take care of them, and readiness is primarily proxied by their assets and debts rather than their income."

Indeed, if a tight labor market boosts wages and labor demand and causes people to believe they can boost their net worth rapidly by working now and then having kids *later*, then tight labor markets could theoretically *reduce* fertility.

*In practice* the effect of tight labor markets boosting income and income boosting net worth totally swamps this effect, so fertility tends to be procyclical.

But nonetheless, it isn't income *per se* that drives fertility changes, but expected future capacity to finance childrearing, which is better proxied by assets and debts than by current income.

Also, prior lifetime experience of *volatility* probably influences expectations!

People who have experienced severe downturns probably carry around a stronger awareness of downside risk and so may be more cautious. There's actually some really awesome research showing this in cohort data matching economic volatility exposure and fertility outcomes!

So, if we successfully shielded people from "experiencing" the downturn (whatever that means), and if we dumped cash directly into increasing net worth, it's plausible that a fertility rebound *might* be faster than after the great recession.

Maybe. Or maybe not.