Setting An Agenda For Demography Matters in 2008

Hi, and welcome back to the 2008 edition of Demography Matters to all our regular readers, and hello to any of you who are just dropping by here for the first time. 2008 promises to be a very interesting year on the demographic front, if only because many of our ideas about what is, and what isn't important are about to be tested. This will, of course, be most noticeable on the economic front, and although Demography Matters is not essentially an economics blog, given that both Claus and I have a professional bias in that direction it is hard to avoid some kind of emphasis on economic factors. Fortunately we do have Randy here (and some wonderful commentors to boot) to play the part of cultural anchor-man, and drag us back from what might otherwise be an excessively one-dimensional approach. Personally my New Years resolution has been to try and offer a rather broader diet of demographic topics and analysis here in the coming year, even if the ongoing currency correction (which is in part, we argue, driven by comparative demographics) and the inflation issue in China are likely to be the years headline grabbers.

Looking back over 2007, there is no doubt in my mind that the biggest demographic news story of the year was the strong showing made by live births in the United States. We have already covered this in previous posts (here, and here) but I have just put up a short guest post from Scott Peterson which you will find below, as a way of emphasising just how important we all feel that this phenomenon is (as is the recent arrival of France back up near the 2.1 replacement rate), and how much we wish others would sit up and take note (and especially in those countries still mired in the 1.2/1.3 Tfr range), and above all to start taking the whole fertility issue more seriously and try to correct what has all too often become an extremely precarious situation.

The second big story of 2007 was undoubtedly the sudden and alarming appearance of high levels of inflation across almost the entire former Soviet Bloc. Claus and I, in numerous posts, both here and elsewhere, have been busy tying this in to the ongoing demographics of these countries - both in terms of fertility and out-migration - and really what happens next here is going to be a very important test of everyone's view. If - in the longer term - fertility really doesn't matter to economic performance, then I see no other underlying impediment to their general economic well-being, but again, if it does, then........

Also we learnt that Japan was ageing slightly more rapidly than had previously been estimated. Back in November the Japanese National Institute of Population and Social Security Research published results showing that the 75-or-older age group would in all probability make up over 10 percent of the population in 2007 (the previous estimate had been 9.7%). Such statistical differences may seem small (and they are, obviously, still within a margin of error). But any news which indicates that population ageing may happen more quickly than anticipated is certainly not good news if what is so problematic for our institutions about the ageing transition is its pace (and especially if this news is based not only on a more rapidly increasing life expectancy but also on a failure of natality to gather traction), plus we need to remember that what seem to be small statistical details can often become large issues if they are carried consistently forward over time.

Obviously the fertility decline in the third world continued apace in 2007, with a whole pack of countries - Argentina, Brazil, Chile, Turkey, Tunisia, Morocco, Thailand, Vietnam, Malaysia, large parts of India etc - coming near to or passing below replacement level. Not un-coincidentally this group of countries are also taking-off very rapidly in economic terms (and this is the big decoupling story, the decoupling of global growth from the G7 collectively, or at least, if not complete decoupling then a re-balancing of the whole situation), which is only likely to reinforce the labour force participation rates and educational levels of women in the countries concerned. Given this, what I find really startling, and indeed preoccupying, is the virtual silence of the large institutional players - the G7, the IMF, the World Bank and the United Nations - on the issue of the potential problem that this process will represent should these countries then follow China and the Asian Tigers into the lowest low fertility zones. It is really quite an urgent matter to get a systematic mother-and-child support policy into place in these countries while there is still time.

Finally, we have, what must be considered to be the most bizarre demographic news story of 2007, sent to us by an Australian reader:

A WEST Australian medical expert wants families to pay a $5000 plus "baby levy" at birth and an annual carbon tax of up to $800 a child. Writing in today's Medical Journal of Australia, Associate Professor Barry Walters said every couple with more than two children should be taxed to pay for enough trees to offset the carbon emissions generated over each child's lifetime. Professor Walters, clinical associate professor of obstetric medicine at the University of Western Australia and the King Edward Memorial Hospital in Perth, called for condoms and "greenhouse-friendly" services such as sterilisation procedures to earn carbon credits.

Basically I think two issues are being confused here. Firstly the need for the entire planet to achieve a "balanced population path" (which might mean that ultimately, and after peaking, global population does start to fall, I see no harm whatsoever in this, although, of course, it will mean some sort of adjustment in our economic system and way of doing things, although that in and of itself may be no bad thing), and secondly the need to attain this balanced path on the basis of a sustainable transitional dybanic. Population ageing is inevitable, and even in many ways to be welcomed, the important thing for our societies is that the process be a balanced one, and - to put it bluntly - that we do not crash societies and countries as we go. Looking across at Eastern Europe there is a very real danger that such "crashes" are produced, at least in some countries. So the road to take does not pass through encouraging people in what are already low fertility societies to have even less children. As our reader commented " Isn't Australia's TFR in the 1.75 range? So, it would seem, this insane proposal would drop Australia to lowest-low."

Which I suppose brings us nicely to the fact that while during 2007 a lot of ink was spilt on concerns about the climatic process (and I don't say that this was not a worthwile and useful way of using the ink) a good deal less was spent on the underlying demographic issues which are associated with it. Our Professor Walters does at least get the point that more people with more money (and this is, of course, what we are now about to see bigtime) means more energy consumption, and it is perhaps a suitably sobering thought as we enter 2008 that as the rupee and the yuan steadily rise oil imports entering India and China will effectively get cheaper and cheaper (assuming that is that we don't get another large hike over the $100 a barrel level). So, in economic terms, and as always, here there are no free lunches, for anyone.

Finally, I am posting a comment I received on my German economy blog. The comment is a response to my review of Germany's economic prospects as we enter 2008. I do not agree with this comment - indeed as you will see - it is in part intended as a criticism of me ("But the author appears to be unaware...etc..etc..etc"). Howvere I did find the comment lucid and entertaining, as I hope you will. In particular since it represents another way of looking at the fertility decline, one which, although not exactly the view taken here on DM, is widespread and (hopefully) controversial.

I am not familiar with this author, but the point I believe he or she is making is that Germans and the rest of the industrialized West cannot grasp a simple point: when you stop reproducing, economic troubles come. There comes a point when exporting to countries that still are reproducing fails to maintain production, when higher wages fails to maintain consumption and hence production, when cutting interest rates to zero fails to offset an inescapable debt that is a consequence also of failure to reproduce. If he wished, the author could also say, when attempts at robotization fails to offset the consequence of failure to reproduce, as Japan has learned, and that counting on certain uneducated and still reproducing niches of one's own country also fail, as India has learned and China is about to learn. Yes, we fail to grasp the point.

But the author appears to be unaware of how deeply the deliberate failure to reproduce weaves itself into all modern society. Into everything! Every modern "belief," the elaborate scaffold of self-deception modernists erect (when they can erect anything without chemical help and extreme porn), depends on failing to reproduce. It's like discovering every event breaks down into the number twenty-three. You would have to reverse practically every modern philosophical 'development' and return to a belief in God, a belief that motherhood is every bit as good as kung fu fighting, a belief again in monogamy, a belief again in scarlet A's. Yes. Women won't return now without an elaborate set of guarantees, and there are some societies where women will never return, regardless the incentives, because their cultures never recognized love ever (oh but keep those geisha movies coming). There's a web-site related to space colonies when one technocrat, considering the problem, said Oh it's simple, just make birth control pills illegal, just fail to order them. Like quality motherhood was some automatically functioning thing that kicked in and prevented a person from strangling the infant once born. No. Our western society was built on a delicate fulcrum, a little spirit of sacrifice from Christianity, a little ignorance of biology, a little chance to make a family. It's gone--oh, it's collapsing a little more slowly than Asia and Africa's. But this article describes the inevitable development in the rest of Europe. Only the US still maintains a tiny edge in the birth rate, and we aren't listening, we're cooperating fully in the final blows to the family.