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MetLife Sees a Baby Bust

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A shape fairly symmetrical shape that's narrow on top, for the age groups born before World War II, then widens a bunch around World War II, then narrows and widens about every 15 or 20 years or so. This demographic pyramid, based on U.S. Census Bureau data, shows how many people in each five-year age group might live in the United States in 2025. (Image: U.S. Census Bureau)

MetLife has early observational data that could settle a dispute between Brookings Institution demographic forecasters and other prognosticators.

Typical forecasters have suggested that the COVID-19 pandemic could lead to a new baby boom, by giving couples more time at home together.

Analysts at the Brookings Institution have predicted, based on consumer surveys and demographic data for the period following the 1918 influenza pandemic, that the number of U.S. births could fall by about 300,000 to 500,000 this year, because of health concerns and the effects of the pandemic on the economy.

(Related: Expect a Baby Bust in 2021)

MetLife has an indication that the Brookings analysts are correct: Enrollees in the group short-term disability plans MetLife runs for employers are filing fewer pregnancy-related STD claims.

MetLife sells employers group STD coverage, and it also administers group STD plans for employers that choose to self-insure.

STD claims for pregnancy-related leave fell 20% between the fourth quarter of 2019 and the fourth quarter of 2020, according to Phil Bruen, a senior vice president for group life and disability product management at MetLife.

The drop occurred about when pregnancies that started early in the pandemic lockdown period would have resulted in pregnancy-related claims, Bruen said in an email.

The United States has been recording about 3.9 million births per year in recent years. The number dropped below 3.8 million in 2018 and 2019, according to National Center for Health Statistics data.

The kinds of new parents who have STD coverage provided or administered by MetLife may be different from parents in the general population.

Population Drop

But, if the birth rate for the entire U.S. population fell 20%, that would imply that the 2021 drop in the number of births could be over 500,000 — and possibly larger than the drop the Brookings analysts have predicted.

That would imply that the United States could record only 3.3 million births, much lower than 2018 or 2019.

MetLife analysts say employers might want to think about pandemic-related changes in the birth rate when designing benefits plans for later this year, and for 2022.

No matter what happens to the birth rate, “employer-offered benefits, including paid leave, continue to be critical to support employees’ financial and mental health as they encounter various health challenges as we enter the second year of the pandemic,” Bruen said.

Long-Term Implications

Even a one-year drop in the number of U.S. births could have important implications for everything from how many kindergarten seats the country will need, to how many 30-year-olds will be prime prospects for cars, houses and individual life insurance in 2051.

A prolonged “baby bust” period could also lead to a labor shortage when people born during that period reach working age.

By reducing the size of the working-age population, a prolonged bust period could reduce the number of wage-earing workers paying into the pension funds, social welfare programs, life insurers and other arrangements that support retirees.

— Read Another Reason Pandemics Are the Retiree’s Enemy, on ThinkAdvisor.

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