Example of dis-saving in process

Recently the Oregonian of Portland, OR USA reported that 2011 was a Banner year for Oregon Public Employee Retirement System retirements.

"Last year was a banner year for the Oregon Public Employee Retirement System in at least one respect: retirements.

PERS officials say 8,279 members signed up during 2011 to start receiving benefits. Final numbers could go down a bit as some members opt to continue working. But that's a 44 percent increase from the average number of retirees over the previous four years. It's also the highest number since 12,500 retired in 2003, when major legislative reforms to the system prompted a spike in retirements."

In response, the system's managers are

"focused on "managing down" the private equity portfolio. That means dialing down their annual commitments to new partnerships, and waiting until market conditions allow existing funds to liquidate older investments and return the proceeds to investors."

A key issue is how easily the system will be able to cash out of its investments in order to pay pension benefits. The report indicates that

"Oregon has one of the most illiquid pension fund investment portfolios in the country... because so much of its money is tied up in long-term private equity partnership...and a slow stock market means fund managers aren't having an easy time selling the companies they've bought".

In a period of global overcapacity in multiple sectors and widespread writedowns to come on financial assets, this pension system like many others may find it difficult to meet its payout obligations. Regardless, the system will see a major increase in the proportion of members in retirement status, meaning that a greater share of payments will have to come from investment liquidation as opposed to contributions from workers. The same situation is occurring in numerous developed countries.

A note on ethnic conflict and demographics: the Czech Republic

The population of the Czech Republic is similar to that of most European populations in its broad outlines: long life expectancies, below-replacement fertility rates, more-or-less substantial net immigration, all can be found in the Czech Republic. The most notable distinguishing factor of the Czech Republic's demographics lie in its size, now and in the relatively distant past: the Czech Republic is one of the very few countries in the world with a smaller population now than in 1945.

The population of the Czech Republic reached a peak of nearly 11.2 million in 1940 but fell to a mere 8.8 million in 1947, not as a consequence of an especially high wartime death rate but rather primarily because of the expulsion of the roughly three million Sudeten Germans. The population has since grown to 10.5 million, this growth the product first of post-war natural increase then--despite a recent partial recovery in fertility rates--because of substantial net immigration.

Beginning with post-war internal migrants from Slovakia (Slovaks and Roma alike) to the labour-hungry Czech lands, immigration into the Czech Republic became more globalized with a later wave of Vietnamese immigrants who made use of Communist Czechoslovakia's recruitment of Vietnamese students and guest workers in the 1970s and 1980s, to the Ukrainians who left their country in the 1990s to earn a living in a neighbouring country with a strong labour market and permeable borders. (As an aside, I wonder if the Ukrainian presence in the Czech Republic is at all linked to historical Czech interactions with the Carpathian Ruthenia that was historically almost an eastern extension of Slovakia, specifically with the Zakarpattia Oblast that was actually part of Czechoslovakia from independence until its 1945 cession to the Soviet Union.) Bulgarians, Chinese, Russians, and Mongolians are some of the newer groups to appear in the Czech Republic. As a high-income European country the Czech Republic would already be an attractive destination, but that the cultural links maintained by the Czechs with other Slavic populations in central and eastern Europe and the Communist-era political and military links established with countries such as Vietnam and Mongolia has advantaged the Czech Republic relative to its neighbours. From what I can tell, this immigration has been substantially less politically problematic than in most other European countries.

None of this couldt have been the case without the catastrophic ethnic violence of the 1940s, the Nazis' colonization and brutalization of the Czechs being followed by the expulsion of nearly the entire ethnic German population from the Czech Republic's territory after the Nazi defeat. Ethnic conflict determined the demographics of the Czech Republic.

Let's start with immigration. Over at my blog I note that Czechoslovakia came apart so quickly and peacefully because Czechs and Slovaks weren't particularly close, for good and for ill; mild resentments and a certain romantic nostalgia characterized, and characterize, relations between the two largest ethnic groups in the former Czechoslovakia. Czechs and Slovaks were separate groups, and each had its own discrete territory unthreatened by the other. The same wasn't true for Czechs and Germans in the modern Czech Republic. I've argued at my blog that the expulsion of the Sudeten Germans was only possible because of long-standing Czech fears that German influence could be the death of their nation, whether metaphorically through assimilation or actually through genocidal colonization. After the Second World War, the expulsion of the Sudeten Germans was probably inevitable. In a counterfactual scenario where the expulsion of the Sudeten Germans wasn't nearly so complete, where the border regions of the Czech Republic were bicultural if not outright German-majority, I can imagine immigration being a contentious issue. In Québec, immigration has been controversial because of concerns about the impact of immigrants on the language balance. Would the post-Communist immigration-driven population growth of the Czech Republic been possible otherwise?

The demographic and economic geography of the Czech Republic would also be radically different. Before 1945, the population density of the Czech lands was relatively uniform, with many of the Czech lands' borders--the same borders home to the Sudeten Germans--being superbly industrialized. The expulsions changed this, depopulating the areas once populated by Germans and then repopulating them only partially with migrants from elsewhere in Czechoslovakia, the expulsions additionally undermining once-strong regional economies. The net result was to make population, making wealth and industry concentrate that much more strongly in the centre of the Czech Republic, in Prague and environs, and in turn creating peripheries. Some people have noted that these peripheries, in turn, suffered disproportionately from overindustrialization and pollution, as the regions' unsentimental new residents saw their new home as a space where industrial modernity could operate untrammelled by tradition, as a site for mass production and mass consumption regardless of the human and environmental cost. According to a recent study (PDF format), the regions which saw the strongest divergence from Czech and European Union averages (as measured by GDP per capita, not by household income) were the border regions that formed the core of the former German zone of settlement. This peripheralization, coupled with the only partial repopulation of the Czech republic's peripheries after 1945, could plausibly encourage the continued concentration of Czechs and their wealth in the geographic centre of their country. Could these border regions of the Czech Republic have evolved very differently if not for the replacement of their populations?

In the past at Demography Matters, we've looked at how changing norms of gender, trivial connections formed by flows of guest workers or tourists, political concerns, the different ways in which people form families, similarities of language and culture between different populations, even geographic adjacency have led to demographic change of one kind or another. One thing that I don't think that we've ever before taken a look at is the role of ethnic conflict, culminating in ethnic cleansing and even genocide, in triggering demographic change. Thinking about this, I find it more than a bit disturbing since more than a few of the populations we've taken a look at--in Germany, Poland, East Africa, the former Yugoslavia, of course the Czech Republic--have been very strongly influenced by the long-term consequences of ethnic conflict. This will change in the new year.

A note on North Korea after Kim Jong-Il

Kim Jong-Il may have died, but North Korea is still damned.

Korea--the south, the north, the peninsula in toto--has been the subject of more than a few posts here at Demography Matters. Korea matters.

Right now, the North and the South are marked by notable imbalances: the south has urbanized, has completed the demographic transition, is in fact at the level of lowest-low fertility, and has begun to receive substantial inflows of immigrants, while the north remains substantially rural and substantially less advanced in the demographic transition and--obviously!--is far more a land of emigration than a land of prospective immigration. South Korea has reached the levels of First World; North Korea combines the worst of the Second and the Third Worlds, with an inflexible totalitarian economy broadly hostile to non-centrally directed enterprise in the context of terrible general poverty. Notably, the South is rather less xenophobic than the North; I wrote back in November 2010 about how the South responds to its deficit of women by sponsoring the immigration of women across East Asia to marry locals, while the North punished women who engaged in survival sex with Chinese men with--at best--the sorts of abortions that didn't involve being kicked repeatedly in the abdomen by members of the security forces.

In the event that the north's border controls weaken sufficiently, as I wrote back in March 2010 sustained mass emigration--to South Korea, an amplification of the existing marriage-driven migration to China, to anywhere--is much the most likely outcome for decades to come. East Germany lost two million people to the West after reunification, and East Germany was--by world standards--a high-income society with relatively advanced consumer industries and a high level of technology. What can North Korea plausibly offer its citizens, especially given the huge improvements in life chances awaiting a North Korean who left and the perhaps (alas) slim likelihood that a new government could trigger quick positive economic transformations.

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