Friday, April 28, 2006

Scrutinizing low fertility

As many European countries are gearing up to reform their pension systems it is really all about the demographics. As life expectancy keeps on rising it is only logical to expect the retirment age to expand with some kind of proportionality. In fact, the real conundrum which is creating much grey hair on the heads of demographers and scientists is really how far life expectancy will and can be pushed? Interesting as this topic is this post will deal with the flip side of the coin which is fertillity and why it is low among many European countries and higher in others?

Lets begin with some empirical evidence though to frame the theme. A research paper from February this year has all the relevant data which points to the low fertility in Europe and the rest of the world. Hans-Peter Kohler, Francesco, C. Billari José, and José Antonio Ortega entitled "Low Fertility in Europe: Causes, Implications and Policy Options"; (from School of Arts and Science - Pennsylvania Univerisity).

The global population is at a turning point. At the end of 2004, the majority of the world’s population is believed to live in countries or regions below-replacement fertility, and the earlier distinct fertility regimes, ‘developed’ and ‘developing’, are increasingly disappearing in global comparisons of fertility levels (Wilson 2001, 2004). Several aspects of this convergence towards low fertility are particularly striking. First, the spread of below-replacement fertility to formerly high fertility countries has occurred at a remarkably rapid
pace and implied a global convergence of fertility indicators that has been quicker than the convergence of many other socioeconomic characteristics. Second, earlier notions that fertility levels may naturally stabilize close to replacement level—that is fertility levels with slightly more than two children per women—have been shattered.

(...)

It is clear that current social and economic institutions are not sustainable in light of these trends, and individual’s life-courses already have been—and will continue to be—transformed in response to reductions in fertility and increases in longevity. Adjusting to the demographic reality of the 21st century will therefore constitute a major challenge for policy makers and companies on the one, and for individuals and families on the other side."

For a more boiled down version see the article from the Economist's European columnist Charlemagne - The fertility bust. (walled for non-subcribers!)

The interesting thing for me in this case is not so much the political and economic implication of sustained low fertility although this is clearly very important and interesting, but why we are seing this low fertility? The argument which is mostly invoked in mainstream discourses is that women's entrance into the workforce has wielded a pressure by the family as an institution pushing birth rates down; i.e. the labour force participation argument. The paper mentioned above obviously engages in a thorough discussion of the reasons for the sustainable low-replacement fertility but for example in a European context differences in fertility still has experts (in this case the the Paris-based National Institute of Demographic Studies (INED)) wondering.

8 comments:

Anonymous said...

Fertility may be falling, but it seems to be that gains in life expectancy (in the United States, at least) are coming at a very modest pace. There even are predictions that the current generation of children in America will be the first generation ever to have shorter life expectancies than their parents.

Peter
Iron Rails & Iron Weights

Edward said...

"in America will be the first generation ever to have shorter life expectancies than their parents."

This claim is being made by Olshansky and others due to the impact of obesity. At present it is a US issue, though the problem may be spreading. Vaupel and others are sceptical.

Funny how fertility stays higher and life expectancy increases less in the US than elsewhere. Could these two be connected? In some strange way they may be.

Edward said...

"The interesting thing for me in this case is not so much the political and economic implication of sustained low fertility although this is clearly very important and interesting, but why we are seing this low fertility?"

Well yes, this is the big question. Many people seeem to treat this as an invitation to answer another question, namely, which sort of determinism do you prefer.

Those who favour economic determinism then argue either labour market or cost of children type arguments. Those who favour social determminism emphasise the emancipation of women, thos who favour biological determinism (instinct) suggest we will return to near replacement because women have a reproductive need etc etc. Some of these arguments have some validity, but they don't get to the heart of the issue.

There are, as we know, two components to the currently low fertility, a quantum one and a tempo one.

The quantum one basically reflects how many children - on average - women want to have. Now what is happening in most cases here is the virtual disappearance of the higher parities - ie very few people are chosing to have more than two. This is in part because children are expensive (as much in time as anything else) and there is a limit to how many children you can combine your time withe and work. It's a quality versus quantity trade off. So if there are few couples seeking more than two children, then there are less to compensate those who remain celibate, are infertile, have a different sexual orientation, or chose to have only one etc. So barring tempo factors, it is unlikely that TFRs would be near 2.1 anyway due to quantum difficiencies.

So what determines how many chgildren people want to have, their 'preferences' for children. Well as we can see in Utah, Idaho etc, ideational factors play a big part. How many children others consider to be desireable, and how many children you see around you are big influences. So in societies were few children are produced, few are desired in the longer run. It is a self re-inforcing process. We need, eg, to watch the Eurobarometers, and (in a post later today) the latest results for Japan and South Korea.

On tempo, this is produced by more women getting more education, rather than labour market entry as such, although structural labour market changes associated with increasing uncertainty in the lower age groups, and the relatively higher costs of first home entry are producing later couple formation and hence later first childbirth in many countries.

And last, but by no means least, modern technologies give women control over their own bodies, separating the sexual act completely from reproduction. This has to be a very important part of the situation as it allows the woman herself to take the decision.

So I would say rather than a reductionist, monocausal approach, you need a multi-causal one, with inetrlocking, and possibly circular, causality at work.

One thing which is clear is that there are very few causal processes at work and identifiable which would push fertility back in the other direction. Getting that old time religion might just be one of them.

S.M. Stirling said...

It's important to remember that we are, to date, _not_ seeing any increase in real longevity.

That is, there's no increase in the potential lifespan.

We're just seeing more people making it to the same limits. There have always been people who lived into their 80's and 90's and even to past 100; now there are just more of them.

Anonymous said...

it would be interesting to see if there is a correlation between birth rates and housing prices (both japan and europe have seen huge housing bubbles in the 90s). Clearly, in order for young people to start a family, they have to have an affordable living.

S.M. Stirling said...

it would be interesting to see if there is a correlation between birth rates and housing prices (both japan and europe have seen huge housing bubbles in the 90s).

-- there's been a big runup of housing prices here in the US, accompanied by rising fertility, so it can't be a simple correlation.

I'm increasingly coming to doubt economic

Edward Hugh said...

"there's been a big runup of housing prices here in the US, accompanied by rising fertility, so it can't be a simple correlation".

I agree. This is not a simple correlation. There are behavioural chnages involved here. There is more than one parameter. Cheap credit is also a factor (eg Spain too). Cheap credit is a global phenomenon, and this can be related to the savings and investment imbalances, and these are to some extent demographically driven.

Rather than looking at those countries who have a housing boom, it is also important to look at those that don't (Germany, Japan, Italy) and try and understand why they don't. It is here that you can best see the demographic elements at work.

S.M. Stirling said...

Also, female education or labor market participation as such is not a causative factor.

The US has very high levels of female education (well over half the students in university), and very high levels of female labor market participation.

Furthermore, all these factors have been in place in the US for a long time -- as long as they have anywhere in the world.

The US also has high and increasing levels of fertility.

Furthermore, the US has relatively little in the way of government-mandated maternal leave, childcare, or any Scandinavian measures of that sort. The general attitude here is "sink or swim, you're on your own".