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Is fertility a leading indicator for stock returns?

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  • Verdickt, Gertjan

Abstract

If fertility behavior is closely related to business cycle behavior, there should be evidence in financial markets. I document that a decrease in fertility growth negatively forecasts real excess returns, several months ahead. More interestingly, this effect is not yet captured by demographic, business cycle or confidence metrics. The relationship is robust in specific subsamples. Overall, this suggests that fertility growth is a leading indicator for recessions.

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  • Verdickt, Gertjan, 2020. "Is fertility a leading indicator for stock returns?," Finance Research Letters, Elsevier, vol. 33(C).
    • Handle: RePEc:eee:finlet:v:33:y:2020:i:c:s1544612318309115
    DOI: 10.1016/j.frl.2019.06.001
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    More about this item

    Keywords

    Fertility growth; Business cycle; Recession; Return predictability;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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