Wednesday, June 17, 2009

A Good/Bad Time To Stop Having Babies

Guest post by Doug Muir

This post originally appeared on A Fistful Of Euros In March.

Here follows a bit of demographic speculation. It’s guesswork right now, but we’ll know in a year or two if I’m right.

Interesting Fact #1: birthrates tend to drop during recessions, and the drop tends to correlate with both the severity of the recession and the speed of its onset. The current recession is looking to be a bad one, and it happened pretty quickly, so we can reasonably expect a sharp drop in birth rates. I say “expect” because it hasn’t happened yet — human biology being what it is, we won’t see the first effects until nine months after most people became aware of the recession. This summer, more or less.

– Makes sense, right? Babies are expensive; more to the point, babies limit your options. They make it harder to move to a different city, change careers, stop working for a while. When times are hard and uncertain, babies become a luxury. For individuals and families, a recession is a good time to put childbearing on hold.


Interesting Fact #2: all across Communist Eastern Europe, birth rates declined slowly through the 1970s and ’80s… and then crashed after 1990, dropping to very low levels and staying there through most of the decade. In some countries they bounced back a bit, in others not, but in almost all cases there’s a big “birth gap” from about 1991 until at least 1997, and often later. This is in contrast to, say, Germany or Italy or Greece, where birthrates declined more smoothly.

Put these two facts together, and there’s a problem.
See, a country’s total birthrate depends on two things. One is the fertility of its women — especially its women in peak childbearing years, 18-35. The other is the total number of women in those childbearing years. If your country has very few young women, then the country as a whole can’t have a high birth rate, even if every young woman is having lots of kids.

Still with me? Well, consider: Eastern Europe saw birthrates crash after 1990. That means that, all across the region, the number of fertile women is starting to decline sharply. In Russia and Ukraine, Bulgaria and Serbia and Hungary, there just aren’t many 18 year olds relative to the total population. And year by year, as the “empty” birth cohorts of the 1990s move into their peak child-bearing years, the number of fertile women will continue to decline.

Okay, this isn’t news. Demographic projections have taken it into account for years. But now there’s a new factor: the recession.

What’s likely to happen is that the countries of Eastern Europe will be hit with a double punch: few childbearing women, and those women having few children. Demographically, the recession is coming at the very worst possible time: roughly one generation after birthrates crashed across the region. This suggests that over the next couple of years, countries like Russia and Ukraine are going to see record low birthrates in both absolute and relative terms. This, in turn, suggests that starting next year, long-term demographic projections for those countries are going to start nosing downwards.

Now, there is one glimmer of hope here. Across most of Eastern Europe, women still tend to start having children sooner than their Western sisters. The average age of birthing mothers in Germany is 29.5; in Sweden, it’s over 30; in Bulgaria, it’s about 25. So there is some slack, demographically speaking. If the recession is short, young women can simply pick up where they would have, only a year or two later. The babies not born in 2010 might just be born in 2012 instead. In this respect, the East is better off than the West; countries where the average birthing mother is already over 30 don’t have this margin.

But if the hard times drag on… well, some of the demographic projections for Eastern Europe were pretty drastic already. By the 2030s, Romania’s population is supposed to shrink by about 10%, Bulgaria’s by over 15%, Ukraine’s by roughly 20%. The recession is likely to make those numbers even more alarming.

So: a good time for individual women and families to stop having babies. But for their countries, maybe not so much.


Phil said...

But ultimately, good for the planet, if the global population starts (and continues) to shrink.

Anonymous said...

Population crashes declining economic conditions could result in skyrocketing poverty leading to a population that eventually can not use advanced agricultural techniques or high efficiency power sources. Increasesing reliance on high labour agriculture and an inability to school citizens would lead to a return to third world fertility levels and eventually expanded land use for farming and cutting of forest for firewood as is happening in Africa.

Russia has an average female age of 41.6 years. And an economic recovery is nowhere in site as their banks are sitting on huge amounts of bad credit - their credit crisis has yet to strike. Large sections of their middle class is made up of "advisors" and other people who were paid out of the old oil wealth to be middle class consumers rather than actually produce anything. These people will soon be out of "work". The government has squandered the oil revenues on trying to defend the falling currency but still dreams of throwing money that it does not have at projects which it can not complete. Oh, and in addition to all the violence occuring just a stone's throw from where the Olympics are going to beheld in Sochi, the eastern territories are livid at Moscow and are likely a future source of unrest.

If good economic conditions are needed to rescue Russia's demographic situation then things are going to get much worse before getting better.

Randy McDonald said...

"Population crashes declining economic conditions could result in skyrocketing poverty leading to a population that eventually can not use advanced agricultural techniques or high efficiency power sources."

That's not an obvious outcome--can you explain the logic behind that?

At any rate, if local economies become unviable for whatever reason, you're not likely to see a return to Third World cohort fertility and traditional farming and more likely to see "normal" fertility and mass emigration. The closest First World equivalent that I can think of is Newfoundland, where the fisheries-related collapse of the outports did not lead to a baby boom but rather to the continued decline of the old economy and mass migrations.

JFreegman said...

I can’t really say I agree with any part of your analysis or the conclusions you draw. First I want to ask: What is the source of your first “fact”, or more specifically, your claim that the drop in birthrates correlates with the severity of the recession and the speed of its onset? Is this a real scientific fact, or just an observation you made based on a few modern examples? But regardless, even with that fact assumed, your conclusion that: “countries like Russia and Ukraine are going to see record low birthrates in both absolute and relative terms. This, in turn, suggests that starting next year, long-term demographic projections for those countries are going to start nosing downwards”, does not seem realistic to me, nor does it appear to be based on a foundation of actual empirical facts. I’ll use Russia as a single example for this argument since it’s much easier to apply data to a single country than a diverse group of countries whose current situations vary greatly.

First I’ll point you in the direction of a much more in depth look at the crisis and the effects it might have on demographics here. It’s a good read and makes a lot of sense. One important point to note is that this crisis is nowhere near as severe as the 1998 financial crisis in terms of the negative impact it’s having on the population. This is reflected through both opinion polls and just plain common sense (eg. People’s entire savings aren’t being wiped out/there’s no hyperinflation; unemployment while high is nowhere near what it was in 1998; they’re starting from a much more secure base rather than just coming out of a depression; the government has huge reserves to fall back on this time around and is much more socially competent). And still, when you look at what happened to birth rates following that crisis, not only were they barely affected, but only a year or two later they began to rise, a rise that sustained for the first time in a decade. The 1998 crisis in conclusion did not make either an immediate or a long term negative impact on birth rates. And although death rates sky-rocketed, which could partially be attributed to the crisis, the overall natural population growth stayed steady. But that’s irrelevant because we’re not seeing anything similar in terms of death rates this year (so far). They’re actually falling and even suicide rates are stagnating.

To amplify my point, here’s a little quote from the above linked blog:… in the first six months of the 1998 recession, the proportion of people who could hardly afford even food rose from 29% to 40% of the population; in stark contrast, in the five months since the Russian economy began collapsing in October, this figure rose from 9%…to just 10%”

So reiterating the fact that this crisis is nowhere near as bad as the 1998 crisis in terms of the social impact it’s having on the population, which in itself didn’t even do much damage to birth/fertility rates, what logic leads you to your conclusions? Unless you’re predicting a disaster on par with perhaps the collapse of the USSR, which is highly speculative, unlikely, and not appropriate for a demographic analysis, I just don’t see how it’s possible.

And I do think the majority of this argument would apply to most of Eastern Europe, bar perhaps Ukraine and Latvia who both might be entering a period of depression and ensuing political turmoil.

JFreegman said...

Three and a half months later, and I'm back to report on some interesting news I just heard about. Last month (August), Russia saw natural population growth for the first time in 15 years. It seems the demographic situation has kept right on track towards improvement throughout the crisis, upward trends unhindered so far.

Kind of ironic since you set "this summer" as the date when we would start to see the horrible effects of the financial crisis, being 9 months after the onset (your rule, not mine!)

That said, I'm still not entirely confident that the positive trends won't be hindered somewhat in the near future since Russia didn't start to experience the full effects of the crisis until much later than the western world. (though I still sincerely doubt anything even close to as serious as what you predict). So if your theory does hold any weight, the last quarter of 2009 will reveal all.

Also it's worth noting that Ukraine is also still seeing improvements, despite their crisis being many times worse than pretty much anyone else's.