Weakening demographic transitions?


in Economics, Politics, Science, The environment

Shirt drying in the sun

It has long been common knowledge that there is a general correlation between rising income in states and falling fertility. While women in very poor states give birth to an average of around eight children, those in the richest places can only expect to give birth 1.5 times on average. Because individual wealth is generally rising around the world, it has been assumed that this transition will help to stabilize the global population sometime this century.

Research by Mikko Myrskyla, at the University of Pennsylvania, suggests that things may not be so clear-cut. While rising income does correlate with lower fertility in states with a low grade in the Human Development Index (HDI), the trend seems to reverse when scores rise above about 0.9, out of a possible 1.0. Back in the 1970s, no state scored higher than 0.89. Now, more than two dozen do.

The research suggests that wealthy states with high HDI scores will not see their populations peak and begin to contract, but rather that they will stabilize and level off. This has a number of implications. Firstly, it could mean that the long-anticipated pension and health crises associated with having fewer workers per retiree might be less severe than expected. Secondly, it could affect immigration patterns and policies. Many people have been assuming that immigration would be the only way for rich states to maintain their populations. If this proves untrue, it could have a significant political, social, and economic impact. Thirdly, stable populations with rising wealth and very high rates of per capita resource and energy usage (and waste production) could spell special trouble for the climate and the environment generally.

When it comes to global population, it is difficult to know what sort of policies would promote environmental sustainability. As I suggested before, reproductive abstinence in the rich world does seem like a plausible way to reduce the total biophysical impact of humanity. It seems fair to say that the probability of any social and economic arrangement being compatible with environmental sustainability rises as the global population falls. A world with three billion people seems fundamentally less likely to experience environmental catastrophe than one with the same political and economic systems but a population of nine billion. Preventing an excessively high population from developing is thus a way of hedging against very bad outcomes, while making it more likely that there will be sufficient resources and waste-absorption capabilities for all those alive to live decently. If Myrskyla’s research is correct, one mechanism for achieving that aim that was previously considered all-but-automatic may in fact not be.

{ 8 comments… read them below or add one }

. August 18, 2009 at 1:21 pm

August 7, 2009, 10:32 am
Having Children Brings High Carbon Impact
By Kate Galbraith

Having children is the surest way to send your carbon footprint soaring, according to a new study from statisticians at Oregon State University.

The study found that having a child has an impact that far outweighs that of other energy-saving behaviors.

Take, for example, a hypothetical American woman who switches to a more fuel-efficient car, drives less, recycles, installs more efficient light bulbs, and replaces her refrigerator and windows with energy-saving models. If she had two children, the researchers found, her carbon legacy would eventually rise to nearly 40 times what she had saved by those actions.

“Clearly, the potential savings from reduced reproduction are huge compared to the savings that can be achieved by changes in lifestyle,” the report states.
The impact of children varies dramatically depending on geography: An American woman who has a baby will generate nearly seven times the carbon footprint of that of a Chinese woman who has a child, the study found.

The calculations take account of the fact that each child is, in turn, likely to have more children. And because the calculations derive from the fertility rate — the expected number of children per woman in various countries — the findings focus on women, although clearly men participate in the decision to have children.

. August 27, 2009 at 3:01 pm

Population growth at 47-year high

The UK population grew by 408,000 in 2008 – the biggest increase for almost 50 years, according to the Office for National Statistics.

The total number of people passed 61m for the first time, with changes in birth and death rates now a bigger cause of growth than immigration.

The numbers of people arriving minus those leaving actually fell by 44%.

Minister Phil Woolas said migrants were coming for short periods, contributing to the economy and then going home.

The UK population grew more in 2008 than at any time since 1962, when it rose by 484,000.

. October 2, 2009 at 9:52 am

Half of babies ‘will live to 100’

More than half of babies now born in the UK and other wealthy nations will live to 100 years, researchers say.

The study, published in The Lancet journal, also says the extra years are spent with less serious disability.

Data from more than 30 developed countries shows that since 1950 the probability of surviving past 80 years of age has doubled for both sexes.

One expert said healthy behaviours for all ages was the key to enjoying living a long life.

Professor Kaare Christensen, of the Danish Ageing Research Centre at the University of Southern Denmark, who led the study, said life expectancy had been increasing since 1840 and there was no sign of this trend slowing down.

. October 29, 2009 at 2:22 pm

Demography, growth and the environment
Falling fertility

Oct 29th 2009
From The Economist print edition
Astonishing falls in the fertility rate are bringing with them big benefits

THOMAS MALTHUS first published his “Essay on the Principle of Population”, in which he forecast that population growth would outstrip the world’s food supply, in 1798. His timing was unfortunate, for something started happening around then which made nonsense of his ideas. As industrialisation swept through what is now the developed world, fertility fell sharply, first in France, then in Britain, then throughout Europe and America. When people got richer, families got smaller; and as families got smaller, people got richer.

Now, something similar is happening in developing countries. Fertility is falling and families are shrinking in places— such as Brazil, Indonesia, and even parts of India—that people think of as teeming with children. As our briefing shows, the fertility rate of half the world is now 2.1 or less—the magic number that is consistent with a stable population and is usually called “the replacement rate of fertility”. Sometime between 2020 and 2050 the world’s fertility rate will fall below the global replacement rate.

At a time when Malthusian worries are resurgent and people fear the consequences for an overcrowded planet, the decline in fertility is surprising and somewhat reassuring. It means that worries about a population explosion are themselves being exploded—and it carries a lesson about how to solve the problems of climate change.

. November 6, 2009 at 11:33 pm

Does the Baby Bust = a Sustainability Boom?

But, while it’s easy to assume that slowing population growth means a more sustainable future, it’s not really as cut and dry as all that. Like The Economist points out: With development, you also get more people living the fossil-fuel heavy American lifestyle. Their argument: The problem of creating a sustainable future isn’t really tied to birth rate. That’s taking care of itself and couldn’t go much faster without China-like impositions on personal freedom. Instead, the focus needs to be on the technology and policies that will help those children grow up in sustainable, energy efficient societies.

. November 9, 2009 at 3:14 pm

Low fertility
The rich are different

Oct 29th 2009
From The Economist print edition
Rich nations are also reaching replacement fertility—by boosting their rates

WHAT happens in poor countries when they reach replacement fertility? The lesson of rich countries is that they stay there for decades. German fertility dipped below replacement in 1970 and is still low. America is the only rich country that, having fallen below the replacement rate, has risen back above it.

Except in a few extraordinary cases—Hong Kong, Macao, parts of eastern Germany—fertility has not fallen to the very low rate of 1.0. In most rich countries, the rate stabilises at about 1.3 and begins to rally. But the rally varies. Northern Europe—Britain, Scandinavia, France—is seeing big rises in fertility, though not yet to above-replacement levels. Russia and eastern Europe have seen little increase in fertility and Mediterranean countries only modest rises.

. September 17, 2011 at 6:42 pm

The main function of marriage in most traditional societies is to bring up children (romantic love rarely has much to do with it). Not surprisingly, changes in child-bearing have gone along with changes in marriage. The number of children the average East Asian woman can expect to have during her lifetime—the fertility rate—has fallen from 5.3 in the late 1960s to below 1.6 now, an enormous drop. But old-fashioned attitudes persist, and these require couples to start having children soon after marriage. In these circumstances, women choose to reduce child-bearing by delaying it—and that means delaying marriage, too.

. January 2, 2017 at 7:08 pm

So why don’t workers in DC schemes put more money aside? The paper suggests that savers may have been deceived by the robustness of past returns. The authors assume that workers would like to retire on 75% of their final salary and that 30 percentage points of that would come from other sources, including social security. Furthermore, they assume 2% annual real-wage growth during workers’ careers, and that, on retirement, savers buy a 25-year annuity with their pot.

Combine those real returns into a portfolio of 60% American equities and 40% Treasury bonds (a standard asset allocation) and you get an overall return of 3.5% a year. That is two percentage points lower than the 5.5% achieved from the same combination in the past. And it means that a worker would have to save 15% a year, not the current 9%, to reach the target.

Even that approach looks optimistic. With bond yields less than 2%, inflation will have to average under 1% to deliver the 1% real return assumed by the authors. And fund-management charges will eat into returns as well. On a 2.5% real-return assumption, contributions would need to hit 19% of payroll.

So why aren’t workers saving more? They may not be overestimating asset returns. Instead, they may be indulging in “hyperbolic discounting”—valuing the income they earn today far more highly than the income they will earn in old age. After all, employees in DC schemes tend to get lower retirement pay than those in DB plans (because employers are contributing less). Yet there is no evidence that workers in companies with DC plans demand more current pay to compensate.

Leave a Comment

Previous post:

Next post: