Wednesday, October 20, 2010

Philip Longman on global aging

Over at Foreign Policy, demographer Philip Longman presents a basic overview for that magazine's readers about aging: its scope, its presence in the Third World, its heavy impact in Asia, and so on. Readers of this blog might be interested in his summary. Me, I was interested in his essay's conclusion.

The connection between a society's wealth and its demographics is cyclical. At first, with fertility declining and the workforce aging, there are proportionately fewer children to raise and educate. This is good: It frees up female labor to join the formal economy and allows for greater investment in the education of each remaining child. All else being equal, both factors stimulate economic development. Japan went through this phase in the 1960s and 1970s, with the other Asian countries following close behind. China is benefiting from it now.

Then, however, the outlook turns bleak. Over time, low birth rates lead not only to fewer children, but also to fewer working-age people just as the percentage of dependent elders explodes. This means that as population aging runs its course, it might well go from stimulating the economy to depressing it. Fewer young adults means fewer people needing to purchase new homes, new furniture, and the like, as well as fewer people likely to take entrepreneurial risks. Aging workers become more interested in protecting existing jobs than in creating new businesses. Last-ditch efforts to prop up consumption and home values may result in more and more capital flowing into expanded consumer credit, creating financial bubbles that inevitably burst (sound familiar?).

In other words, a planet that grays indefinitely is clearly asking for trouble. But birth rates don't have to plummet forever. One path forward might be characterized as the Swedish road: It involves massive state intervention designed to smooth the tensions between work and family life to enable women to have more children without steep financial setbacks. But so far, countries that have followed this approach have achieved only very modest success. At the other extreme is what might be called the Taliban road: This would mean a return to "traditional values," in which women have few economic and social options beyond the role of motherhood. This mindset may well maintain high birth rates, but with consequences that today are unacceptable to all but the most rigid fundamentalists.

So is there a third way? Yes, though we aren't quite sure how to get there. The trick will be restoring what, in the days of family-owned farms and small businesses, was once true: that babies are an asset rather than a burden. Imagine a society in which parents get to keep more of the human capital they form by investing in their children. Imagine a society in which the family is no longer just a consumer unit, but a productive enterprise. The society that figures out how to restore the economic foundation of the family will own the future. The alternative is poor and gray indeed.

The wholesale shift towards family enterprises that Longman predicts doesn't strike me as a likely solution to subreplacement fertility. The emergence of cultural norms and economic and political institutions which allow people to form families of various kinds without penalties or stigma, perhaps with the addition of new reproductive technologies to facilitate reproduction for longer periods of time and despite various problems, is the way to go. What do you think?


Anonymous said...

Well, there are a lot of dubious assumptions here.

One is that the whole planet will go through the cycle at the same time (though it admits some countries are ahead of others). In fact, currently the US is getting working-age people coming in from south of the border just when our own Boomers can use their help.

But the biggest dubious assumption is that it will take more workers to support non-workers in the longerm future. What we need is not necessarily more workers, but better production and less waste. IE technological advance (and practices to use it), which development comes from using the brains of all the citizens, not just the males.

bemused_leftist here

Matt said...

Longman has, if I recall correctly, previously speculated that religious conservatives are going to take over the world through faster breeding. It sounds dubious to me.

Sublime Oblivion said...

Sweden is the way to go. A fertility rate ranging 1.6-1.9 results in long-term slow population decline or stability (depending also on immigration), preventing both drastic aging and slowly easing the global overpopulation problem.

At this stage of the game, given what we know about trends in pollution, climate change and resource depletion, calling for national TFR's significantly above 2.1 is about as globally irresponsible as subsidizing the production of gas guzzling SUV's, IMO.

Sid said...

I think the extent of elderly people's dependence on younger workers in advanced societies of the near future is overestimated. For sure, we'll see a trend of production becoming even less based on manual labor (as the latter becomes more and more costly) than it is now - but this might well be offset by growth in non-manual labor jobs, many of which, if not most, can be done by elderly people just as well as by younger (think academics - many of them keep working for all their lives). Perhaps the modern industrial-style organization of non-manual labor work, with workers spending a third to half of their lives in office, will change to something more flexible, time-efficient and health-efficient, but that would be a welcome change indeed.

Of course, this doesn't mean that there will be no problems associated with demographic transition, but if one stops thinking about pre-1970 industrial society as a role-model for how societies should function, the idea that demographic transition itself is a problem does not seem to be that valid.

benj said...

Apparently there is one society that achieved this goal - Israel. It is the only developed nation with a high fertility rate - and it's true for all the population, even the secular not just the very religious.

Noel Maurer said...

First, my patented nitpick: your use of the word "predict" in the last paragraph completely alters the meaning of what Longman wrote: "So is there a third way? Yes, though we aren't quite sure how to get there."

That is not a prediction about the future. It is an if-then statement, with nothing about the likelihood of the "if." If somebody altered something I had written the way you altered Longman, I'd be furious. And rightfully, no? Why did you use the word "predict"?

Second, I don't understand your suggestion. Most of the West already has stigma-free single parenthood and same-sex coupling; I even have a friend who grew up in a commune in Park Slope, Brooklyn, with no problems from social disapproval.

What changes, specifically, do you propose that would have appreciable effects on the birth rate?

Urban Demographics said...

Sid has a good point. But I'm pessimist about this tertiary society future.

I would agree that Sweden is the way to go. Giving economic incentives to child birth and raise might help to increase fertility rates.

The central argument presented by Longman, however, is that low fertility rates are connected to cultural norms. What are the social/economic perceptions people in general have about raising a child? a burden? a gift?

To tackle subreplacement fertility might need a discussion about that.

benj said...

As the Israeli example I gave show it - money incentives are not the way to go. They give far less than any European country and have a fertility rate twice as high.

The solution is clearly cultural. The pressure to get marry, from the family and friends, is very strong. Then the pressure to have children.
Israelis, including the seculars, do get marry, and have children when married, not when living as a couple. And they have 3 children as a norm.

I really can't see how this is doable in Europe. The "traditional" values are too far gone to come back and influence society. Maybe it's too late.

Matt Beck said...

I think this is ridiculous. Artificial reproductive schemes are never going to have an appreciable impact on world population and demographic trends; and besides, they are morally and medically objectionable for any number of reasons. Artificial reproduction is, metaphorically speaking, the demographer's equivalent of the green's insistence that we could replace the fossil fuel industry by relying on electricity generated from windmills: a pipedream at best, but in this case far worse than that, since we are now talking about actual human beings.

What we need is a rollback of the culture of death. Make elective abortions illegal, disallow the use of oral contraceptives within marriage, repeal the estate tax, and then get the government out of the mating and marriage market altogether. Such measures will rapidly conduce to a strong cultural presumption in favor of marriage, children, and cross-generational private investment. Anything else is simply a compromise with the encroaching barrenness.

Wise Bass said...

I personally think one of two things is going to happen:

1)We go through the "bulge" of old people, when we have a disproportionately old population, using all manner of robotic supplements and the like. Eventually, that bulge dies off, and we get to a smaller world population at a more normal and even age distribution.

2)In the next 100 years, somebody discovers ways to drastically extend both life expectancy while putting off the effects of aging, so having an older population becomes much less of a problem.

I personally don't mind an older population as long as it's economically viable. It would also be a much more stable population, much less prone to crime and so forth.

What we need is a rollback of the culture of death. Make elective abortions illegal,

Good luck.

disallow the use of oral contraceptives within marriage,

Even better luck with that. Look at the Griswold case back in the 1960s in the US - even when the rules were on the books, people weren't enforcing them anymore. There's not going to be any support for this anytime soon.

Anonymous said...

Sweden is not the way to go.
Any one aware of how the distribution in fertility is among ethnic groups, would agree.

Its mainly the muslim immigrants who contribute disproportionately to fertility, propping up the TFR, suggesting that ethnic swedes are having more babies.
Ethnic swedes probably have a TFR around 1,5, whch is pretty far from replacement fertility.

Subsidizing fertility has had the adverse effect of boosting muslim immigrant fertility. So their clearly is a selection problem. (unless ethnic swedes, or more generally ethnic scandinavians. plan on engaging in outbreeding themselves through massimmigration and subsidized demographic takeover)

The massimmigration of muslim and african immigrants, and their high fertility, is already a major problem in many westeuropean states.
The new immigrants cant solve the aging problem, as their offspring are far from being as economically productive as ethnic europeans.

So unless the north european welfare states find a selection mechanism which ensures that mainly economicaly productive members of society have a proportionately higher fertility, the indiscrimanate welfare model will possibly result in a negative contribution to state economy.

benj said...

An interesting post close to the subject:

Anonymous said...

nice idea.. thanks for sharing.