Some links: longevity, real estate, migrations, the future

I have been away on vacation in Venice--more on that later--but I am back now.

• Old age popped up as a topic in my feed. The Crux considered when human societies began to accumulate large numbers of aged people. Would there have been octogenarians in any Stone Age cultures, for instance? Information is Beautiful, meanwhile, shares an informative infographic analyzing the factors that go into extending one’s life expectancy.
• Growing populations in cities, and real estate markets hostile even to established residents, are a concern of mine in Toronto. They are shared globally: The Malta Independent examined some months ago how strong growth in the labour supply and tourism, along with capital inflows, have driven up property prices in Malta. Marginal Revolution noted there are conflicts between NIMBYism, between opposing development in established neighbourhoods, and supporting open immigration policies.
• Ethnic migrations also appeared. The Cape Breton Post shared a fascinating report about the history of the Jewish community of industrial Cape Breton, in Nova Scotia, while the Guardian of Charlottetown reports the reunification of a family of Syrian refugees on Prince Edward Island. In Eurasia, meanwhile, Window on Eurasia noted the growth of the Volga Tatar population of Moscow, something hidden by the high degree of assimilation of many of its members.
• Looking towards the future, Marginal Revolution’s Tyler Cowen was critical of the idea of limiting the number of children one has in a time of climate change. On a related theme, his co-blogger Alex Tabarrok highlights a new paper aiming to predict the future, one that argues that the greatest economic gains will eventually accrue to the densest populations. Established high-income regions, it warns, could lose out if they keep out migrants.

Some news links: history, cities, migration, diasporas

I have some links up for today, with an essay to come tomorrow.

• JSTOR Daily considers the extent to which the Great Migration of African-Americans was a forced migration, driven not just by poverty but by systemic anti-black violence.
• Even as the overall population of Japan continues to decline, the population of Tokyo continues to grow through net migration, Mainichi reports.
• This CityLab article takes look at the potential, actual and lost and potential, of immigration to save the declining Ohio city of Youngstown. Will it, and other cities in the American Rust Belt, be able to take advantage of entrepreneurial and professional immigrants?
• Window on Eurasia notes a somewhat alarmist take on Central Asian immigrant neighbourhoods in Moscow. That immigrant neighbourhoods can become largely self-contained can surprise no one.
• Guardian Cities notes how tensions between police and locals in the Bairro do Jamaico in Lisbon reveal problems of integration for African immigrants and their descendants.
• Carmen Arroyo at Inter Press Service writes about Pedro, a migrant from Oaxaca in Mexico who has lived in New York City for a dozen years without papers.
• CBC Prince Edward Island notes that immigration retention rates on PEI, while low, are rising, perhaps showing the formation of durable immigrant communities. Substantial international migration to Prince Edward Island is only just starting, after all.
• The industrial northern Ontario city of Sault Sainte-Marie, in the wake of the closure of the General Motors plant in the Toronto-area industrial city of Oshawa, was reported by Global News to have hopes to recruit former GM workers from Oshawa to live in that less expensive city.
• Atlas Obscura examines the communities being knitted together across the world by North American immigrants from the Caribbean of at least partial Hakka descent. The complex history of this diaspora fascinates me.

Some news links: fertility, population aging, migration, demography is not destiny, Eurabia

Over the past week, I've come across some interesting news reports about different trends in different parts of the world.

• The Independent noted that the length and severity of the Greek economic crisis means that, for many younger Greeks, the chance to have a family the size they wanted--or the chance to have a family at all--is passing. The Korea Herald, meanwhile, noted that the fertility rate in South Korea likely dipped below 1 child per woman, surely a record low for any nation-state (although some Chinese provinces, to be fair, have seen similar dips.)
• The South China Morning Post argued that Hong Kong, facing rapid population aging, should try to keep its elderly employed. Similar arguments were made over at Bloomberg with regards to the United States, although the American demographic situation is rather less dramatic than Hong Kong's.
• Canadian news source Global News noted that, thanks to international migration, the population of the Atlantic Canadian province of Nova Scotia actually experienced net growth. OBC Transeuropa, meanwhile, observed that despite growing emigration from Croatia to richer European Union member-states like Germany and Ireland, labour shortages are drawing substantial numbers of workers not only from the former Yugoslavia but from further afield.
• At Open Democracy, Oliver Haynes speaking about Brexit argued strongly against assuming simple demographic change will lead to shifts of political opinion. People still need to be convinced.
• Open Democracy's Carmen Aguilera, meanwhile, noted that far-right Spanish political party Vox is now making Eurabian arguments, suggesting that Muslim immigrants are but the vanguard of a broader Muslim invasion.

Nature's Amy MaxMen on the achievements of Gapminder's Hans Rosling

In January 2011 and June 2013, I linked to two videos by Swedish statistician and popularizer Hans Rosling demonstrating different demographic trends. Today, via 3 Quarks Daily, I came across Amy Maxmen's excellent long-format article on Rosling and his accomplishments, "Three minutes with Hans Rosling will change your mind about the world". It does a great job of explaining just what Rosling, and his Gapminder Foundatin, are trying to achieve, and why.

Back in Sweden, Rosling continued to teach global health, moving to the Karolinska Institute in Stockholm in 1996. But he came to realize that neither his students nor his colleagues grasped extreme poverty. They pictured the poor as almost everyone in the ‘developing world’: an arbitrarily defined territory that includes nations as economically diverse as Sierra Leone, Argentina, China and Afghanistan. They thought it was all large family sizes and low life expectancies: only the poorest and most conflict-ridden countries served as their reference point. “They just make it about us and them; the West and the rest,” Rosling says. How could anyone hope to solve problems if they didn’t understand the different challenges faced, for example, by Congolese subsistence farmers far from paved roads and Brazilian street vendors in urban favelas? “Scientists want to do good, but the problem is that they don’t understand the world,” Rosling says.

Ola, his son, offered to help explain the world with graphics, and built his father software that animated data compiled by the UN and the World Bank. Visual aids in hand, the elder Rosling began to script the provocative presentations that have made him famous. In one, a graph shows the distribution of incomes in 1975 — a camel’s back, with rich countries and poor countries forming two humps. Then he presses ‘go’ and China, India, Latin America and the Middle East drift forward over time. Africa moves ahead too, but not nearly as much as the others. Rosling says, “The camel dies and we have a dromedary world with one hump only!” He adds, “The per cent in poverty has decreased — still it’s appalling that so many remain in extreme poverty.”

Rosling’s online presentations grew popular, and the investment bank Goldman Sachs invited him to speak at client events. His message seemed to support advice from the firm’s chief economist, Jim O’Neill. In 2001, O’Neill had coined the acronym BRIC for the emerging economies of Brazil, Russia, India and China, often considered part of the developing world. He warned that financial experts ignored these rising powers at their peril. “I used to tease my colleagues who thought in a traditional framework,” O’Neill says. “Why are we talking about China as the developing world? Based on the rate of economic growth, China creates another Greece every three months; another UK every two years.”

Rosling welcomed the new audience. “They request my lectures because they want to know the world as it is,” he says. The private sector needs to understand the economic and political conditions of current and potential markets. “To me it was horrific to realize that business leaders had a more fact-based world view than activists and university professors.”

[. . .]

Rosling’s charm appeals to those frustrated by the persistence of myths about the world. Looming large is an idea popularized by Paul Ehrlich, an entomologist at Stanford University in California, who warned in 1968 that the world was heading towards mass starvation owing to overpopulation. Melinda Gates says that after a drink or two, people often tell her that they think the Gates Foundation may be contributing to overpopulation and environmental collapse by saving children’s lives with interventions such as vaccines. She is thrilled when Rosling smoothly uses data to show how the reverse is true: as rates of child survival have increased over time, family size has shrunk. She has joined him as a speaker at several high-level events. “I’ve watched people have this ‘aha’ moment when Hans speaks,” she says. “He breaks these myths in such a gentle way. I adore him.”

Here's another clip, a video taken last year where Rosling explains the reality of a strong convergence of Mexico with the United States.

On the ongoing depopulation of Cape Breton

The other day on my personal blog, I linked to a CBC News report describing how a Cape Breton store and bakery, desperate for workers, was offering free land to people who would move to that Nova Scotian island and work for them.

A family-run business is trying a unique approach to recruit people to live and work year-round in rural Cape Breton by offering two free acres of land to people who are willing to relocate.

Farmer's Daughter is a general store and bakery in Whycocomagh, N.S., which has a population of about 800. Sisters Sandee MacLean and Heather Coulombe took over the business earlier this year from their dairy farmer parents, who started it nearly 25 years ago.

MacLean told CBC News that the store has great employees — but it needs more of them to expand their operations.

"We have big ideas about what we'd like to do," she said.

The business would like to increase the number of year-round employees from 12 to at least 15, but hasn't gotten much response to traditional "help wanted" ads. Many young people have left the community to work in places like Halifax or Alberta.

This story has gotten quite a lot of attention nationally. I would be entirely justified, alas, in suspecting that any bump in migration will be as minor as that which occurred this February when the Cape Breton If Donald Trump Wins website briefly went viral. This humour website did get quite a lot of attention, and apparently did result in at least some inquiries. By this July, though, it seems as if the only migrants the website attracted were temporary ones, in the form of tourists.

A three-ringed binder, tucked into the corner of a small visitor information centre in Nova Scotia, may contain the proof of what many Cape Bretoners have suspected — that more Americans are descending on the island this year.

And locals say Donald Trump is the reason.

All day, tourists flow in and out of the one-room visitor information centre in the village of Baddeck, asking for advice on what to see and how to make the most of nearby attractions. A glance at a visitors' book — marked "Where are you from?" in block capital letters — reveals various American locations: Connecticut, Florida, New York City.

[. . .]

Room nights sold across the province rose by three per cent compared to the first half of 2015, but Cape Breton saw a boom of 16 per cent.

There was also a 12 per cent increase of visitors to Nova Scotia from the United States, while visitation from overseas declined seven per cent.

Although there are clearly many American tourists, it's harder to come by Americans who are actually following the website's advice and immigrating.

Back in January 2015, I looked into the phenomenon of out-migration from Atlantic Canada, the easternmost region of Canada and one that has consistently failed to share in the relative prosperity of other provinces. This out-migration does not occur at the same rate throughout. In the province of Nova Scotia, for instance, the capital city of Halifax has continued to experience some growth close to the Canadian average. At the other end is Cape Breton Island, a mountainous island in the northeast of the province famed as the last stronghold of Canadian Gaelic language and culture and as a land with a sadly dysfunctional industrial economy. Once, before the world wars, coal mining helped sustain a cosmopolitan industrial working class, living in the cities and towns which now constitute the Cape Breton Regional Municipality. But now, the mines are shut and nothing has replaced them. With no local economic motor and not nearly enough subsidies and income transfers coming from outside, the population of the entire island has been collapsing for decades, as the incipient natural decrease of the island's population is accelerated by emigration.

Nova Scotia's Finance and Treasury Board has noted the scale of this collapse. Rural Nova Scotia--Nova Scotia outside of Halifax, even--has been in steep decline for some time.



Cape Breton has done much worse than the average. Chris Shannon's widely shared 2014 Cape Breton Post article looks at the scale, and the inevitability, of this.

Fifteen-year-old Taylor O’Brien says the lure of more opportunities in the West has her thinking a move to Alberta is in her future after she completes Grade 9 at Bridgeport school in Glace Bay this June.

She says the plan is to move to Fox Creek, Alta., a town in the heart of that province’s oil industry. Her father lives there and O’Brien says she wants to move in July, in time to get settled and begin high school there in the fall.

“I really thought it through. I want to move,” she says.

“I’m too used to being stuck around here. It gets old after a while … seeing the same places. I see the Mayflower Mall like 10 times a week. I just want to explore.”

Sydney resident Thérèse Begg, 32, along with her spouse, intend to leave Cape Breton in the next couple of years for either Ontario or British Columbia.

It’s due to a lack of nightlife in the downtown and the small number of quality restaurants, she says.

Despite making a decent living as a baker and her partner being a machinist, Begg says it’s the lifestyle that’s driving them away from her hometown.

“There’s no variety of anything to do. Everybody goes to the hockey game, go to Tim Hortons, and they go to the movies. And that’s pretty much all there is to do,” says Begg, who grew up in Sydney but lived in Halifax for 10 years before returning in 2010.

The statistical trends in 2014 were grim. They have not changed at all.

CBRM’s economic development manager John Whalley says he’s more concerned about the rate of decline, which isn’t showing any signs of slowing down.

“It’s actually accelerating,” he says.

“Cape Breton Island, in terms of rate, saw the biggest decline of any region in the country, according to this (Statistics Canada) data, and CBRM, obviously, constitutes a big part of that.”

In 2012-13, the figures show the CBRM lost 931 people to interprovincial migration to other parts of Canada, and a further 301 people moved to other areas of Nova Scotia (known as intraprovincial migration).

The other municipalities in Cape Breton are worse off with declines in population from the 2006 to 2011 census years at 4.6 per cent for Richmond County, 5.7 per cent for Inverness County, and 6.3 per cent for Victoria County.

Whalley says long-range projections from consulting firm Stantec estimate the CBRM’s population in 2031 would be approximately 78,000.

The island’s population is estimated to shrink to 102,000 from its current size of 134,535 people.

My Prince Edward Island, in marked contrast, is projected to experience relatively strong growth over that timeframe, having surpassed the declining population of Cape Breton just a few years ago.

All I can do is note this trend, rooted in the very deep-seated issues described. Cape Breton is beautiful--its natives agree, its visitors agree--but relatively few of these people actually want to live here. It's difficult to see how this could change, barring something completely unexpected and--frankly--unimaginable. At most, the ongoing slowdown in Alberta might slow down emigration, for a time. (Or, perhaps more plausibly, it might redirect it.)

Some thoughts on the demographics of Japan and path dependency

I learned from any number of sources, from E-mails and from blogs and from the "News" section of my Feedly news feed, that the demographics of Japan have entered a new phase. The population is now in sharp decline. From the CBC:

Japan's latest census confirmed the hard reality long ago signalled by shuttered shops and abandoned villages across the country: the population is shrinking.

Japan's population stood at 127.1 million last fall, down 0.7 per cent from 128.1 million in 2010, according to results of the 2015 census, released Friday. The 947,000 decline in the population in the last five years was the first since the once-every-five-years count started in 1920.

Unable to count on a growing market and labour force to power economic expansion, the government has drawn up urgent measures to counter the falling birth rate.

Prime Minister Shinzo Abe has made preventing a decline below 100 million a top priority. But population experts say it would be virtually impossible to prevent that even if the birth rate rose to Abe's target of 1.8 children per woman from the current birthrate of 1.4.

Without a substantial increase in the birthrate or loosening of staunch Japanese resistance to immigration, the population is forecast to fall to about 108 million by 2050 and to 87 million by 2060.

Bloomberg went into more detail.

Tokyo, Japan’s capital, had the highest municipal population with 13.5 million. The city also recorded the biggest increase in population after Okinawa prefecture. Osaka, the country’s second biggest city, is among 39 prefectures and cities that had a decline in population.

The ratio of Japan’s 1,719 municipalities that had a drop in population expanded to 82 percent in 2015, from 77 percent in 2010. The number of households rose 2.8 percent to 53.4 million with the number of people per household dropping to 2.38 from 2.46 over the five-year period.

Statistics Japan's latest estimates estimate a decline of nearly 200 thousand people between the 1st of September, 2015, and the 1st of February of this year. This Japanese-language PDF apparently goes into more detail about the particulars.

Tokyo, the reports note, continues to grow on the balance of net migration, but away from Tokyo decay is real. I would again like to recommend to our readers Tokyo-based blogger Richard Hendy's sadly inactive blog Spike Japan, a compilation of tours throughout different Japanese regions which have entered terminal or near-terminal declines, something that he plausibly enough blames on demographics. With fertility rates far below replacement levels, large-scale migration of the young out of declining areas, the rapid aging of the remaining population, and next to no foreign immigration, it's difficult to imagine how some peripheral areas could ever be revived.

It's increasingly difficult to imagine how Japan as a whole will revive. Jacob M. Schlesinger's November 2015 Wall Street Journal "Tokyo’s Test: Policy vs. Demographics" noted the challenge for the country.

In May 2012, [Masaaki Shirakawa, the governor of the Bank of Japan from 2008 through 2013] delivered a widely cited speech titled “Demographic Changes and Macroeconomic Performance: Japanese Experiences.” In it, he cited global evidence that “the population growth rate and inflation correlate positively,” a finding he called “a sharp contrast with the recently waning correlation between money growth and inflation.” In other words, a country like Japan with a shrinking population was inevitably condemned to slow growth and deflation, and central banks were impotent to fight it.

[. . .]

Just over two and a half years into his term, [new Abenomics-era governor Haruhiko Kuroda] has delivered well on the first pledge, with two rounds of “quantitative and qualitative easing” that more than doubled the BOJ’s asset-purchase plan used to create fresh liquidity. The jury is still out on his second pledge, to end deflation and revive Japan’s economy.

The bad news: Japan’s gross domestic product contracted for the two consecutive quarters ended Sept. 30, pushing the country into recession for the second time during Mr. Kuroda’s brief term. Some of that results from cyclical problems and policy missteps outside Mr. Kuroda’s control: the slowdown in China, an ill-timed sales tax hike. But some stems from the fact that economy’s capacity to expand is constrained when the workforce is shrinking, making recessions much more common.

The battle to break deflation has also struggled, due both to falling oil prices and the slow growth that has damped price pressures. After some early success in pushing the most closely watched inflation gauge above 1%, deflation returned over the summer, and the Japanese government reported Friday that the consumer-price index was negative in October for the third month in a row.

But the BOJ released Friday its own preferred measure—stripping out prices for food, energy and other items that the central bank considers distorting of underlying trends—that showed inflation rising in October at a more robust positive 1.2% annual rate. The aggressive monetary policy has also helped create the tightest job market in a generation, with a separate Friday report showing the unemployment rate dropping to an eye-popping 3.1%. That, in turn, has helped expand the labor market by prompting employers to find more ways to use older workers conventionally considered past retirement age. The jump in employment in Japan by those 65 years and older has kept the size of its labor force fairly stable, even as the classically defined “working-age population” has contracted. Whether Japan’s newly aggressive monetary policy can really overcome the demographic drag hinges on whether Japanese companies can be persuaded to invest more at home. An economy’s ability to grow is rooted in the expansion of its labor force, combined with the ability to boost its labor productivity, or output per worker. Productivity can be lifted by investment in labor-enhancing equipment.

Could this investment be enough? It depends, Schlesinger concludes, on the Japanese government being able to successfully alter the perceptions of business about the dire business environment. Whether or not this is achievable, particularly in the context of Japan's increasingly adverse demographics, is another issue entirely. Yes, it's possible that Japan might successfully implement a partial roboticization of its economy to cope this these challenges. Whether the technological improvements necessary will arrive in time is another question entirely.

How is Japan dealing with its demographics issues? Not very well. See Isabel Reynolds' October 2015 report noting that Abe's proposed policies for dealing with Japan's demographic issues have not been successful: substantial immigration remains impossible, child care and elderly care programs are not funded to meet the demand, women and especially mothers have substantial problems in the work force, Japan's population continues to drift towards Tokyo Metropolis. A scandal recently erupted over paternity leave, when parliamentarian Kenzuke Miyazaki was criticized for taking paternity leave and then resigned following revelations of an affair. Traditional gender norms seem to still be in effect, removing any possibility of change, certainly any hope of the Nordic-like near-replacement fertility wanted by Abe. Japan's immigration policies, as the report of Bloomberg's Yoshiaki Nohara and Jie Ma about Japan's much-criticized foreign-technical internship program illustrates, remain exploitative, and seem likely to deter immigration.

Back in 2010, Hendy wondered if Japan was stuck in a downwards spiral.

It might just be, however, that despite recent evidence to the contrary, Japan has embarked on a vicious demographic spiral, in which a variety of complex feedback mechanisms set to work: aging results in declining international competitiveness, which results in greater economic hardship at home, which results in a suppressed birthrate; aging results in ballooning fiscal deficits, which in the absence of debt issuance must result in higher taxes or cuts to government spending, which cause economic pain, driving down the birthrate; aging, as the elderly dissave, results in a decline in the pool of domestic savings on which government borrowing is an implied claim, reducing room for fiscal maneuver and resulting in less ability to withstand exogenous shocks; aging further entrenches conservative attitudes to everything from pension reform to immigration, resulting in greater government outlays and smaller government receipts; aging leads the electorate to fear for the future of the pension system, resulting in more saving by the economically active, depressing consumption, which drives manufacturers offshore and raises unemployment, which is strongly correlated with the birthrate.

I would argue that we are seeing just this sort of thing. Certainly the downward demographic spiral is continuing, with inadequate signs as of yet that Japan is going to be making the cultural and institutional changes needed to foster a revival in fertility rates. The new normal in Japan might well be low overall fertility, some people having only small families, some opting not to have children together.

Even if there was a miraculous revival tomorrow to replacement-level fertility, there would still be a huge trough in Japanese demographics, a lack of potential workers and consumers, that could only be plausibly filled by immigration. There, too, Japan is lacking. I have blogged here about the example of South Korea, where the total stock of foreign-born residents is not only comparable to that of Japan despite South Korea's population being only 40% of the size, but where the national government is actively encouraging immigration. Would radical change be enough? Japan could have been a destination for migration flows for some time--I remember reading in the English translation of Robert Guillain's The Japanese Challenge about how some industrialists wanted to bring in Taiwanese guest workers as early as the 1960s--but Japan has explicitly chosen to deter migration. In this context, networks of migrants and migration have formed without Japan, potentially leaving it outside. Might Japan open the doors and find out that the people who might otherwise have come to Japan opted for the more familiar Korea, or China, or who knows where else instead? It's possible.

How can Japan escape its demographic trap, break from its existing path? I straightforwardly admit bafflement. I only hope that the people running one of the world's largest economies will do better than me.

On the demographic limits to future economic growth

On Thursday the 21st in The Globe and Mail, journalist Konrad Yakabuski had an article published, "Fewer economic miracles in a world with fewer demographic explosions". Drawing particularly on Ruchir Sharma's March/April 2016 Foreign Affairs article "The Demographics of Stagnation".

Ruchir Sharma, the head of emerging markets and global macro at Morgan Stanley Investment Management, warns that policy-makers have been looking in all the wrong places to explain what has become the weakest global economic recovery in postwar history. The causes aren’t high public and private indebtedness, income inequality or overcautious investors, although those factors don’t help. The real problem is a dramatic slowdown in labour market growth rates around the world.

It seems counterintuitive to be worrying about labour market shortages when automation is rendering more and more jobs redundant and unemployment remains at near-record levels in most of Europe. Even the U.S. unemployment rate, which is at an eight-year low of 4.9 per cent, cannot mask the fact that the participation rate (the percentage of working-age Americans in the labour force) is at a four-decade low, leaving millions of potential workers idling on the sidelines.

But by exhaustively tracking population and gross domestic product growth over one-decade periods since 1960, Mr. Sharma comes to a several sobering conclusions. One is that “explosions in the number of workers deserve a great deal of credit for economic miracles.” Another, he writes in an article published this week in Foreign Affairs, is that “a world with fewer fast-growing working-age populations will experience fewer economic miracles.”

Between 1960 and 2005, the expansion of the labour force and rising productivity determined growth rates almost everywhere. During that 45-year period, the global labour force grew at an average annual rate of 1.8 per cent. Since 2005, the rate has slipped to 1.1 per cent and is expected to fall further in all but a few outlying nations (such as Nigeria) as the consequences of a decades-long decline in fertility rates leave even emerging economies facing dwindling influxes of new workers.

[. . .]

“Over the next five years, the working-age population growth rate will likely dip below the 2-per-cent threshold in all the major emerging economies,” Mr. Sharma says. “In Brazil, India, Indonesia and Mexico, it is expected to fall to 1.5 per cent or less. And in China, Poland, Russia and Thailand, the working-age population is expected to shrink.” The most worrying slowdown is China’s, with “dire” implications for the rest of the world. In the past five years, Mr. Sharma notes, China alone accounted for a third of global growth.

This is the sort of scenario that long-time readers of Demography Matters have been forewarned about for some time, thanks to the insights of dear comrade Edward Hugh. The 21st century will be a world, it seems, where human capital, in relative abundance or otherwise, will play a critical role in determining the futures of world economies. Individuals, groups, entire communities or countries relatively well-positioned might well be strong. I suspect that in the coming decades, people with the right skills will prosper. Other regions, though? I can easily see any number of major economies not adapting well. Can Germany, locomotive of the Eurozone, really outlast sustained low fertility? What of China? What of ... ? One can only hope that the robots will come on stream at the right time.

Three links on African immigration to China

1. I'd like to point people towards Africans in China, a blog maintained by researcher Roberto Castillo. This blog concentrates on the African immigrant community in Guangzhou, its development and its issues.

2. Yucheng Liang's study "The causal mechanism of migration behaviors of African immigrants in Guangzhou: from the perspective of cumulative causation theory", published in 2014 in The Journal of Chinese Sociology, draws on ethnographic interviews and statistical analyses to argue that African immigraiton to China can be expected to continue and that China should innovate accordingly to try to minimize potential problems.

This study tests international migration theory, especially cumulative causation theory, by looking into the causal mechanisms of international migration behavior among African immigrants in China by using the respondent-driven sampling method since African immigrants in China belong to a small hidden population. This method collected a representative sample (N = 648) from two locations in 2011. The paper reveals that the immigration behaviors of African immigrants in China from 2005 to 2011 have characteristics similar to international immigrants in initial stages - the cumulative causal effects of immigrants' social capital was continually strengthened during the reproduction of migration behavior in the sending countries. Consequently, given the sustainable economic growth and maintenance of a stable society in China, the scale of future transnational immigration (including illegal migration) will continue to expand. The paper proposes that at the present stage, existing policies should raise the entry threshold of African immigrants into China in order to mitigate the speed and scale of migrants' social class decline.

It's also quite interesting to note that, far from Guangzhou and the south of China, in the Zhejiang city of Yiwu in the lower Yangtze basin, another African immigrant community is starting to take form. I point readers specifically towards the 2010 article "From Guangzhou to Yiwu: Emerging facets of the African Diaspora in China" (PDF format), written by Adams B. Bodomo and Grace Ma and published in the International Journal of African Renaissance Studies - Multi-, Inter- and Transdisciplinarity. This article suggests that, owing to a variety of factors, Africans have better experiences here than in Guangzhou.

Yiwu Africans also experience constraints in their Chinese sojourn but these are not different from what any foreigner living in China would experience: linguistic misunderstandings, cultural differences, and even having to put up with socially unacceptable practices like spitting profusely. But Yiwu Africans, in most cases, are treated respectfully by Zhejiang law enforcement officers. Civil liberties are well respected. For instance, freedom of worship among these Africans seems to be one of the highest in China. There may be a number of reasons why this difference is there. One, it may be that Africans who number less than 30,000 in Yiwu can be contained easily. Two, most of the Africans in Yiwu are from the Magbreb region of Africa, while most Africans in Guangzhou are from Sub-Saharan Africa. My fellow West Africans in Guangzhou report that even the brutal Guangzhou police treat Arab Africans more respectfully than Black Africans. But, third, and more importantly, the difference, we propose here, is due to the differences in efficiency and fairness on the part of Yiwu law enforcement officers such as the police and immigration officials. We propose here that, partly as a result of these differences in treatment, and also if Yiwu gets more developed into an international trade centre, it may overtake Guangzhou as a model residential city for Africans and many foreign businessmen from developing parts of the world, such as West Asia and Latin America. In that sense then, Guangzhou is missing an early opportunity as a model multi-racial business city in China.

If in fact the majority of African migrants in Yiwu are from the Maghreb, this does suggest at least the potential for Yiwu to start attracting migrants from the wider Arab world. The role of Islam in binding together Chinese and non-Chinese Muslims, meanwhile, is also noteworthy.

"Depopulation: An Investor's Guide to Value in the Twenty-First Century"

Earlier this month, Marginal Revolution's Tyler Cowen linked to an interesting-sounding new e-book available on the Amazon Kindle platform, Depopulation: An Investor's Guide to Value in the Twenty-First Century by Philip Auerswald and Joon Yun.



Depopulation is a solid, inexpensive, and fairly quick read. Just 70 pages in length, Auerswald and Yun's e-book does what it promises in providing its readers with a quick look at some of the likely economic consequences of eventual global population decline. What asset classes will be hardest hit? Will it even make sense to own assets for investment purposes? How is migration, both intra-national and international, likely to change things? What sorts of policies might be adopted to ameliorate the effects of this change? What other unexpected consequences might come of all this? That the authors can't provide firm answers is owing to the relative novelty of the situation facing an increasingly large majority of the world population.

My substantial disagreement with the authors relates to the idea of competition over resources. Even in a hypothetical world of falling global populations, resource scarcity could still easily be an issue. I could imagine a future world less populous than ours but one with more competition over a resource, whether because potential consumers are wealthier and better able to make claims upon a resource (real estate, say, or some natural resource) or because the natural resources available are falling more quickly than the relevant population. This disagreement is more a matter of emphasis on my part than a substantial objection, mind.

I liked Depopulation, as a thought-provoking guide to our changing world's future. I think that you would, too.

"The Year Having Kids Became a Frivolous Luxury"

Back on the 22nd of January, Slate's Jessica Grose posted at the Double XX blog looking at changing attitudes towards parenthood in the United States.

There have been many prominent pregnancy and child care–related issues in 2014, from the UPS pregnancy discrimination case that was recently argued in front of the Supreme Court to the publicity around the scheduling software that makes child care arrangements impossible for working-class parents. In reading and writing about these issues, I’ve noticed a depressing sentiment: Having children is now often framed as a frivolous lifestyle choice, as if it’s a decision that’s no different from moving to San Francisco or buying a motorcycle. If you choose to buy that Harley or have that baby, it’s on you, lady.

When I’ve written about middle- and upper-middle-class parents wanting benefits like paid parental leave, this is the typical sort of comment people make: “I see no reason to subsidize women’s fantasies of ‘having it all.’ ” As if raising children is just about pinning another badge to a Girl Scout sash. When I write about working-class parents just trying to make ends meet and find safe child care for their offspring, the comments are even crueler: “If you can't afford a dog, don’t get a dog. If you can't afford a kid, don't get a kid.”

Though these sorts of reactions aren’t brand new, I’ve been seeing more of them. So I decided to ask June Carbone and Naomi Cahn, both law professors and the co-authors of Marriage Markets: How Inequality is Remaking the American Family and Red Families v. Blue Families: Legal Polarization and the Creation of Culture, about where the framing of children as a lifestyle choice comes from, and whether my suspicion that there’s an uptick in people treating child-bearing as this kind of consumer choice is true.

There are two slightly different things going on. For wealthier parents, the turn against child-rearing happened in the late ’90s and early aughts, when childless white-collar workers started grousing about the benefits that workers with children received, from tax breaks to more flexible work hours. This coincided with a critical mass of mothers in the workforce. Cahn, a professor at George Washington University, points to the 2000 publication of Elinor Burkett’s The Baby Boon: How Family-Friendly America Cheats the Childless, as an expression of the growing resentment of parents.

[. . . ]

So what’s going on? When Carbone and Cahn wrote their 2010 book, Red Families v. Blue Families, they described the blue state model of parenting as the kind where people defer child rearing until “both partners reach maturity and financial independence.” Red families have a different model—they promote abstinence until marriage and are pro-life, and so people get married younger, and there are higher rates of teen pregnancy among red families. There used to be sympathy for young parents who were struggling to get by in the “red” model.

Blue families have long preached and practiced “responsible parenting,” which is that you shouldn’t have children you can’t afford. But the shift is that red families are now also on the “responsible parenting” bandwagon.

As Grose concludes, in an economic environment where the perceived costs of parenthood have risen substantially while jobs capable of supporting families disappear, the spread of this sort of attitude does much to make parenthood even more difficult. Given the ability of sub-replacement fertility to worsen economic outcomes in the medium to long term, this perception of scarce economic resources necessarily discouraging family formation might even be called self-destructive.

On the inevitability of out-migration from Atlantic Canada

Halifax, capital of the Atlantic Canadian province of Nova Scotia, has some serious demographic issues. In May of last year, the Halifax Chronicle-Herald's Brent Bundale and Davene Jeffrey summarized the findings of the Halifax Index 2014. Bundale had noted in 2012 that a relatively strong Haligonian economy could be threatened by labour shortages. This has become a serious problem.

Halifax is facing a population crisis as fewer people move to the city and more pack their bags for other parts of the country, a new report says.

Immigration to Nova Scotia’s biggest city hit an eight-year low last year, while outmigration to other parts of Canada spiked to its highest level in over a decade, the report found.

Halifax’s population grew 0.4 per cent last year, half the municipality’s normal rate and lagging behind most Canadian cities.
“If our population declines, our fiscal sustainability is threatened,” Paul Kent and Fred Morley, both with the Greater Halifax Partnership, said in an introduction to the Halifax Index 2014.

“The biggest challenge we face as a community is hanging on to our new graduates and attracting immigrants.”

Parts of the index mirror findings of the Ray Ivany-led report released earlier this year on improving the province’s economy. A key finding of the Ivany report was that Nova Scotia must grow its population through immigration and encouraging students to stay.

One noteworthy thing about all this is that, by the standards of Atlantic Canada, Halifax is in relatively good shape. It attracts large numbers of migrants from throughout Atlantic Canada and from Nova Scotia, and it attracts a disproportionately large share of Atlantic Canada's immigrants. Port Hawkesbury, a Cape Breton town and noteworthy source of migrants whose mayor was interviewed in connection with the collapse of the new migration of Atlantic Canadians to Alberta, is not so favoured at all.

John Phyne and Linda Harling-Stalker's paper "'Good to be Alberta Bound?': Out-Migration, In-Migration and the Strait Region of Nova Scotia, 2001-2006", concentrating on the area of northern Nova Scotia including Port Hawkesbury, is a solid paper combining economics and ethnography. It makes a case that, outside of relatively favoured areas like Halifax, substantial out-migration is inevitable. With limited options for well-paying employment, a dispersed and highly rural population structure, a century-long perspective on migration seeing it as an inevitable life stage, little lasting in-migration (whether from other regions of Canada or from non-Canadian sources), and sustained below-replacement fertility rates, the authors predicted the decay of that region's fabric. That decay, I would suggest, can be generalized to the whole of the area.

These constraints on the labour force will limit the region's growth. A Toronto Dominion February 2012 report, "Estimating Longer-Term Growth Prospects in Canada's Provincial Economies", makes just this point.

Québec, the Maritimes, and Manitoba rounded out the middle-to-bottom positions. We see that productivity gains among the group were tightly clustered (1.1-1.5%). Therefore, the difference in the headline GDP growth number among these five provinces stemmed primarily from labour supply growth. Québec generally had a lower labour force participation rate than the others in large part due to an older populace. However, this did not translate into lacklustre labour supply growth because of the province’s ability to attract about 15-20% of all new immigrants admitted to Canada each year. Of the group, Prince Edward Island (PEI) recorded the highest labour supply growth of roughly 1.0% per year from 1990-2007. While annual population gains within PEI were not significant, the labour force participation rate did increase by more than three percentage points over the benchmark period. In comparison to both Québec and PEI, the remaining three provinces (Nova Scotia, New Brunswick and Manitoba) fell somewhere in the middle on labour supply growth front. In spite of their underlying differences, economic growth among the five provinces in this group came in at 1.8-2.4% per year.

Worse will come.

The expected outflow of individuals to other parts of the country, combined with struggles to attract international migrants, weigh down the labour supply prospects for Québec and the Atlantic provinces. Our projections have Québec clocking in at a mere 0.3% labour supply growth over 2016-21. The numbers for the Atlantic provinces are not much better. Combining these disappointing numbers, with lacklustre productivity gains, results in economic growth range from 1.1% to 1.4% per year in each of these provinces.

In response to these demographic constraints, papers like the Canadian Federation of Independent Business' October 2009 "The Future of Atlantic Canada: Dealing with the Demographic Drought" (authored by Amelia DeMarco and Bradley George) and the Centre for the Study of Living Standards' December 2009 "The Productivity Performance of Atlantic Canada" (authored by Peter Harrison and Andrew Sharpe) have identified improving productivity as the only way forward for the Atlantic Canadian economy. The problem, as especially the last paper notes, is that there have been many calls to imrpove productivity in Atlantic Canada but little success. The economic structure of the region, concentrated in low-productivity resource industries and retail, is resistant. What economic convergence has come, in Newfoundland and Labrador, has come from offshore oil driving strong growth in the past decade. Will this last even for Newfoundland? Will the remainder of Atlantic Canada enjoy similar bounty? I have my doubts.

In the meanwhile, as a 2013 Canadian Press report drawing on Statistics Canada's migration information notes, there are entirely rational reasons for Atlantic Canadians to continue to migrate.

BMO economist Robert Kavcic said inter-provincial migration was well established in the early 2000s as Alberta emerged as the country’s growth engine, but stalled somewhat during the 2008-09 recession.

“Now we’re at the part of the cycle where Alberta (is growing strong again), the unemployment rate is down to around four per cent, and Atlantic Canada has lost a lot of momentum because a lot of the fiscal stimulus there has wound down,” he explained.

He noted that while all provinces are losing workers to Alberta and to a lesser extent Saskatchewan, the drain was especially dramatic in Atlantic Canada, where out migration hit 11,000, or 0.5 per cent of the population, during the last 12-month period for which there is data.

The major factor for the movement is availability of work, the report says. Alberta and Saskatchewan lead the nation with unemployment rates of 4.4 and 3.6 per cent respectively, well below the 6.9 per cent national average. The four Atlantic provinces, meanwhile, have jobless rates ranging from 9.1 per cent in Nova Scotia to 11.0 per cent in Newfoundland and Labrador.

As well, average hourly wages are now $6 higher in Alberta than they are in Atlantic Canada — the highest gap on record — and about $4 higher than in Ontario and British Columbia.

[. . .]

Among the least attractive of the 19 areas surveyed, BMO listed Prince Edward Island, Nova Scotia, London, Ont., and New Brunswick in that order from the bottom.

The inevitability of further out-migration from Atlantic Canada, to Ontario or Alberta or Saskatchewan or anywhere sufficient jobs are availabile, seems inescapable. Equally inescapable is the likelihood that, the more out-migration occurs, the more there will be economic incentives for out-migration as the region's economy continues to fall further behind its peers. As Phyne and Harling-Starker's paper noted, Ireland only managed to reverse similarly high levels of emigration with by developing an economic miracle. Even that didn't last. Absent something surprising, I fear Atlantic Canada might be heading into a feedback loop. Certain favoured areas, like Halifax, might do well. The rest, though?

On China becoming a country of immigrants

A South China Morning Post article, Jenni Marsh's "Afro-Chinese marriages boom in Guangzhou: but will it be 'til death do us part'?", published last year caught my attention. This article on the substantial African immigrant community in Guangzhou described how this community, and its descendants, were becoming embedded in the city. Ultimately stemming from the human connections made by China with West African countries during China's Maoist era of internationalism, economic migration has created a large and growing community.

"Chocolate City" OR "Little Africa", as it has been dubbed by the Chinese press, is a district of Guangzhou that is home to between 20,000 and 200,000, mostly male, African migrants (calculations vary wildly due to the itinerant nature of many traders and the thousands who overstay their visas).

Africans began pouring into China after the collapse of the Asian Tigers in 1997 prompted them to abandon outposts in Thailand and Indonesia. By exporting cheap Chinese goods back home, traders made a killing, and word spread fast. Guangzhou became a promised land.

It is easy to believe that every African nation is represented here, with the Nigerian, Malian and Guinean communities the most populous. But Little Africa is a misnomer; in the bustling 7km stretch from Sanyuanli to Baiyun, in northern Guangzhou, myriad ethnicities co-exist.

Uygurs serve freshly baked Xinjiang bread to Angolan women balancing shopping on their heads while Somalis in flowing Muslim robes haggle over mobile phones before exchanging currency with Malians in leather jackets, who buy lunch from Turks sizzling tilapia on street grills, and then order beer from the Korean waitress in the Africa Bar. Tucked away above a shop-lined trading corridor, the bar serves food that reminds Africans of home - egusi soup, jollof rice, fried chicken.

Whereas Chungking Mansions conceals Hong Kong's low-end trading community, in dilapidated Dengfeng village - Little Africa's central thoroughfare - the merchants, supplied by Chinese wholesalers, are highly visible. And it's in this melee of trade where most Afro-Chinese romances blossom.

I would also recommend this Al Jazeera photo essay.

I've blogged here before about immigration into China. In August 2010 I touched upon Russian immigration into China, as people migrated from the Russian Far East to a relatively more prosperous and dynamic Chinese northeast. In a 2011 post on Taiwan, I mentioned in passing the settlement of large numbers of Taiwanese in the Shanghai area. (I recommend one 2009 paper by Yen-Fen Tseng and another by Ping Lin looking at the phenomenon of Taiwanese migration to the Chinese mainland.) In passing while writing on Korea, I've mentioned here and here that many desperate North Korean female refugees have married Chinese farmers. Southeast Asian women seem to be following suit in southwestern China.

China has the potential to become a major destination for immigrants. China has become a global economic power, with interests and relationships worldwide, connections that can be capitalized upon by migrants if there are niches. With a China that is become increasingly rich, especially compared to much of the Third World, with an increasingly low birth rate and a soon-to-shrink working-age population, there are niches. These niches might well attract large numbers of migrants from relatively poorer countries, but they might also attract migrants from relatively richer countries. I mentioned Russia and Taiwan above, while South Koreans are also noteworthy. Looking to the experiences to date from Taiwan and Hong Kong with international migration, I would suggest that Southeast Asia might well become a source of migrants. Will the Philippines become a major source country? What of Thailand and Vietnam? What about an African continent that China is building more ties with? Et cetera.

What will the overall impact be on China's population dynamics? I honestly can't say. With on the order of 1.4 billion people living in China, it would take huge numbers of migrants--tens, if not hundreds of millions, of people--to create change on a large scale. Then again, change on smaller scale, on the level of a province or a metropolis, is also possible. It's arguably already starting to happen. Will this impact the international migration choices of Southeast Asians, if a migrant-accepting China is next door? Is China at all ready for this prospect?

How will the Chinese people and state react to these changes? Any number of outcomes is possible. It will be a privilege to see what will happen in the coming decades.

On how China and Asia show how demographics alone is not destiny

Back on the night of the 4th of October, I joined thousands of Torontonians in wandering the streets late at night, looking at some of the works of art put out for public display in the all-night art festival of Nuit Blanche. One of the works I found most evocative was an installation mounted by Montréal-based artist Maria Ezcurra, draped on an alleyway on Spadina Alley in Toronto's oldest oldest Chinatown. The installation's title? Made in China.

The installation is composed of clothes labeled “Made in China,” donated by the community and set in a Chinatown alleyway. This collaborative piece functions as a façade filling an empty space between two buildings, creating in this way both a physical and a symbolic connection among cultures.

The work is about connections between Eastern and Western societies, between old customs and current trends, between globalization and tradition. It is about how we see and understand ourselves from other views, and vice versa. But mostly, it is about trying to build a bridge in which we are all represented, as a society as much as individuals.

Made in China is an anthropology of our shared present. Clothing in this project is perceived as an effective artistic medium for knowing and learning in new ways about ourselves in relation to others, thus symbolically connecting individual knowledge with culturally produced ideas.

Two months later the news came out that once again, China now had the world's largest economy, at least measured by purchasing power power and in aggregate. China, as Joseph Stiglitz noted in Vanity Fair, is sufficiently large and sufficiently rich to be #1 again, and a major force in the world.

China is also facing the prspect of rapid population aging. Feng Wang 2012 analysis for the China Economic Quarterly, "Racing Towards the Precipice". Between a shift to low levels of fertility and rapid increases in life expectancy, China's working-age population can be expected to start contracting just as its population of potential retirees is growing. Multiple sources predict the working-age population will peak in just a couple of years. This sort of rapid aging could impose very serious costs on China. Ultimately, it could lead to China not completing its economic convergence towards the high-income societies of the world.

Will this necessarily mean that societies with more advantageous age structured, especially neighbouring ones, will profit? That potential certainly does exist, for instance in Southeast Asia. This International Business Times article sets the tone of that argument.

Home to 600 million people and located next to the growth engines of China and India, countries comprising the Association of Southeast Asian Nations (ASEAN) economies face the challenge of creating enough jobs to absorb their domestic growing labor forces and building infrastructure to boost productivity, according to an HSBC economist.

“We believe the future, at least from a demographic and natural resource perspective, belongs to ASEAN,” HSBC economist Trinh Nguyen said in a research note. “But whether this will be realized will be dependent on the will of the countries’ leaders.”

Although seen as the new frontier for growth, these Southeast Asian countries still performed below their potential, averaging just 5 percent growth in the past decade. The region attracted $111.4 billion in foreign investment last year -- almost equal to China’s $121.1 billion. But Nguyen thinks ASEAN countries can and should do better.

In the coming decades, ASEAN nations will have more prime-age adults (age 25-54) than ever before, and their dependency ratio (the proportion of the young and aged to working age adults) will drop significantly, freeing up resources for other investment opportunities, according to HSBC. Economic behavior varies at different stages of life -- while the young require investment in education and health, and the aged require health care and pensions, prime-age working adults supply labor and savings.

Emphasis should be placed on "potential." William Pesek's Bloomberg View commentary from last month, "When Even $7 Trillion Isn't Enough", notes that despite generally more advantageous age structured Southeast Asian countries aren't necessarily in the position to benefit.

For all the handwringing over rising labor costs on the mainland, China's annual output per manufacturing worker remains a staggering 15 times greater than Vietnam's ($57,100 versus $3,800), four times Indonesia's and more than three times that of Filipinos. Bottom line: Higher wages may not drive as many foreign manufacturers out of China and into Southeast Asia as some have predicted. Why relocate southward only to get less for your money?

Given all the hype about regional integration next year, those numbers should be sobering. On Jan. 1, the Association of Southeast Asian Nations will take its most dramatic step yet toward creating a Europe-like common market for 600 million people. McKinsey reckons that a better-integrated Asean could generate as much as $615 billion in fresh economic value annually by 2030. But it will take many years and considerable political will to unify 10 disparate economies that often compete more than they cooperate, and the progress won't necessarily be linear.

Infrastructure is, of course, vitally important to making Southeast Asia more efficient. As Tonby points out, Asean would be well served by "overcoming some of the fragmentation that has prevented companies, technologies, and services from achieving scale in the past."

But human development -- including aggressive investment in education, training and healthcare -- could be even more critical. Take Indonesia. Southeast Asia's biggest economy often touts its demographic dividend -- 26 percent of its 250 million people are under 15 -- but that's a strength only if Jakarta gives them the tools to compete. "We often brag about how much cheaper we are in terms of labor vis-a-vis that of China and vis-a-vis other parts of the world, but we tend to overlook the fact that we're not as marginally productive as China," says Gita Wirjawan, Indonesia's former trade minister. "We've got to do something about building the soft infrastructure for the purpose of creating a much more marginally productive society."

The same is true in Thailand -- where an inefficient and underfunded education system continues to hold down productivity -- as well as Myanmar, Vietnam, the Philippines and elsewhere. Even as they map out new highways and railroad tracks, Asean governments need to increase investment in education exponentially. As of 2012, for example, Indonesia was spending 3.6 percent of gross domestic product on education, while Malaysia spends 5.9 percent and Thailand 7.6 percent. Those ratios need to be closer to 20 percent in the years ahead.

Going something further afield, Dhiraj Nayyar's "Making 'Make in India' Work", also for Bloomberg View, makes the argument that things are even worse in China's trans-Himalayan neighbour.

Consider land. A new land-acquisition law, passed in the dying months of the previous government in 2013, makes buying farmland on which to build factories tremendously complicated and expensive; by law, companies have to pay four times the market price in rural areas. There's simply no free market for land in India.

On labor, India should have a cost advantage over China, whose labor-intensive goods now flood the Indian market. Chinese wages have risen rapidly over three decades of double-digit growth. India’s haven’t, and almost half the population is still engaged in unproductive agriculture. Yet tough labor laws mean that the opportunity costs of hiring workers remain cripplingly high. While the government has started a debate on reforming those laws, few changes are evident yet.

Unreliable and expensive power supplies hamper all of India's businesses. Indian governments have long subsidized agriculture and regular consumers by charging higher rates to industry. China and other emerging nations have followed the opposite strategy. India need not reverse course completely, but it needs at least to even out prices for everyone while boosting overall supply.

The issue of expensive capital is one that should particularly exercise Rajan. He knows that India’s closed financial system artificially raises the cost of capital. He's stuck with a tight monetary policy for the moment because of high inflation. But compared to the rest of the world, Indian interest rates tend to be too high even when monetary policy is more accommodative. There's also plenty more room for India to open up its financial system, even if it remains wary of the kind of cowboy capitalism that led to the 2008 crash.

As numerous sources note--for instance, the OECD report "Economic Outlook for Southeast Asia, China and India 2014: Beyond the Middle-Income Trap" (PDF format)--moving beyond the middle-income stage countries need to innovate to move ahead. Simply having large numbers of workers will not guarantee economic growth if other elements of economic policy aren't sufficiently adept. China, notwithstanding its documented problems and likely prospects, has so far been making a better job of its particular age structure than its neighbours have. Will they catch up? (Will China slow down even further?) All that remains to be seen.

This sort of thing shouldn't need to be emphasized. Look, for instance, at central Europe, where despite advantageous geography and high levels of human development bad policy kept central Europe from catching up with northwestern Europe in the fashion of southern Europe, and where now population aging may mean central Europe might never completely catch up. Demographics, alone, is not destiny. There are things that can be done to make the most of it; there are things that can be done to do otherwise. Simple statistics, by themselves and without interpretation, do not necessarily mean that much.

Looking to the science fiction of Monica Hughes and the demographics of the future

Just this week, I've had the occasion to reread prolific Canadian young adult science fiction writer Monica Hughes' 1991 novel Invitation to the Game. I read the book back when it came out in hardcover, as a Grade 6 student on Prince Edward Island, and was impressed. I'm happy to say that the book still holds up as well, that the novel still deserves my warm memories and the awards and good reviews of others. Understandable as a prototype of the dystopias that seem to predominate nowadays in young-adult literature, Invitation to the Game is a novel that I was surprised to find provided an interesting commentary on some of the demographic issues facing us right now.



The novel starts in the year 2154, as the 16-year-old protagonist Lisse and her friends graduate from their elite private school to their jobless adult lives. There had been a population crash in the early 21st century, precipitated by pollution, and of necessity robots were made to take over much of the day-to-day routines of human society. Even after the population recovered, however, the robots remained entrenched, with the net effect of dooming most of each coming generation to unemployment. Two of Lisse's friends are lucky enough to end up employed, for a time. The remainder are exiled with Lisse to live out their lives in a "Designated Area", an urban district to which they are confined by internal passports, depending on stipends from a resentful employed minority and grey-market jobs to live. Without any hope of escaping their condition, the young graduate drift into despair until they are invited to "The Game," a mysterious but detailed virtual reality scenario that allows them to escape to another world. Eventually, they do.

This post is not a ridiculous post about space colonization being a solution to issues of unemployment and underemployment, to marginalization and anomie. Any kind of program of space colonization is no kind of answer at all to these issues. Author Charlie Stross' 2007 essay "The High Frontier, Redux" makes the point that, even if there are economically exploitable resources in space, the optimistic dreams of human settlement are unlikely to be realized because human beings are just too fragile to persist. Many things would have to change radically for this to happen, and we don't even know if these radical changes are possible.

This is, however, a post that's concerned about the ethics of this. In this world, as in Hughes' fictional future world, people are a resource. In many parts of the world, people are an increasingly scarce resource, especially people belonging to particular demographics or possessing certain skills. Despite the value of people as a resource, and despite these local scarcities, in many cases people are being prevented from being useful. This might be because of barriers to migration. This might be because of mistaken government policies that prevent others from realizing their talents. Whatever the precise cause, it's fundamentally ill-thought and--I'd suggest--in many ways quite wrong. As Hughes' characters note, this kind of waste might even be very problematic for the survival of any numbers of regimes.

"[I]t seems the Government's not interested in any new ideas."

"That's the problem with this society," Trent interrupted. It is uninterested. Dead in the water. We should scrap it and start over."

"How?" Karen asked, her big voice booming. "Societies tend to go on until they run down by themselves or rot from inside."

"Can you afford to wait that long?" Trent pushed his sharp face aggressively at Karen. "I can't." (13-14)

When considering demographic issues, now and in the future, it's also worth considering the extent to which particular treatments are, or are not, sustainable. Various marginalizations--keeping people out, keeping people down--might be politically convenient, but they might equally be politically dangerous.

On the demographic background behind the Ontario election tomorrow

Tomorrow, the Canadian province of Ontario will go through an election. The Liberal minority government failed to get the support of the left-wing NDP in passing its provincial budget, triggering an election. Right now, the parties seem tied; the election can go any way. (I myself intend to turn up at the polls in my riding, or electoral district, of Davenport and vote for the Liberal candidate; the NDP may have overplayed its cards in Davenport specifically and Toronto generally.)

As noted by Jason Kirby of MacLean's, the demographic background of Ontario is rather unpromising. The economic growth that all three parties count on may just not happen as the workforce ages.

[F]or all the thousands of kilometres the leaders travelled, for all the babies kissed, promises made and millions of pixels burned out by instant online analysis, it’s remarkable how little attention went to the only mathematical reality that matters as Ontario tries to get back on its feet. Its workers are getting old, fast, and that simple fact is the demographic hand grenade that threatens to blow an even bigger hole than already exists into Ontario’s economy.

The reality is Ontario’s creaking workforce is likely to upset everyone’s plans, no matter which party wins. That’s because underlying the various party platforms was a common assumption: that Ontario’s economic growth will kick into higher gear over the next few years, providing a boost to the provincial budget and doing much of the heavy lifting needed to haul Ontario out of its fiscal hole. The impetus for the growth might vary (Tory cuts, Liberal corporate welfare and taxes on the rich, NDP corporate taxes), but once past the nitty-gritty each party was in the same finger-crossing territory: our plan will boost the economy, and that growth will bring Ontario’s $11.3-billion deficit under control.

Partway through the campaign, Doug Porter, chief economist at BMO Nesbitt Burns, published a report entitled “Destiny dictated by demography” (PDF) that should have given all parties pause. In it, he sketched some of the ways Canada’s aging population will hit the economy over the next five to 15 years. Top of the list: “Average growth rates will be slower; get used to it.” For Ontario in particular, he estimated, that means an annualized rate of real GDP growth of just 1.7 per cent for 10 years. Yet the Liberal’s last budget before the election forecast growth of 2.5 per cent for each of the next two years, rising to 2.6 per cent by 2017—growth rates not out of step with what the other parties might expect.

To see how Ontario’s demographics could undermine the economy, consider the following. In the early 2000s, Ontario was a notch behind Alberta in terms of the pace of growth of its adult, working-age population. Today the two provinces aren’t even close. Ontarians are shuffling into retirement age far faster than new workers are coming along to replace them. Sure, the aging workforce is a nationwide phenomenon. But in Alberta, where the number of people turning 65 last year rose slightly more than five per cent, the working-age adult population also grew five times faster than in Ontario.

Ontario’s labour force participation rate is already deteriorating as a result. While it’s often said that a lower participation rate is a sign of workers giving up and leaving the job market, the real driver is demographics. As this chart shows the participation for most Ontario regions is below the national average, which is saying a lot when you consider the size of the province’s population.

For the curious, Ontario's official population projection to 2036 is here, and Douglas Porter's report mentioned in Kirby's article is here.

Three links on cities as enormously productive, and predictable, social organizations

Cities, as forms of human settlement that are becoming increasingly dominant across the world, have been on my mind recently. I wanted to share with our readers three papers of interest regarding the structure and importance of cities, economically and demographically.

The first paper I came across via via blogger James Nicoll. The 2007 article in the Proceedings of the National Academy of the Sciences, "Growth, innovation, scaling, and the pace of life in cities", by Luís M. A. Bettencourt, José Lobo, Dirk Helbing, Christian Kühnert, and Geoffrey B. West, argues for the existence of structured urban hierarchies.

Humanity has just crossed a major landmark in its history with the majority of people now living in cities . The present worldwide trend toward urbanization is intimately related to economic development and to profound changes in social organization, land use, and patterns of human behavior. The demographic scale of these changes is unprecedented and will lead to important but as of yet poorly understood impacts on the global environment. In 2000, >70% of the population in developed countries lived in cities compared with ≈40% in developing countries. Cities occupied a mere 0.3% of the total land area but ≈3% of arable land. By 2030, the urban population of developing countries is expected to more than double to ≈4 billion, with an estimated 3-fold increase in occupancy of land area, whereas in developed countries it may still increase by as much as 20%. Paralleling this global urban expansion, there is the necessity for a sustainability transition toward a stable total human population, together with a rise in living standards and the establishment of long-term balances between human development needs and the planet's environmental limits. Thus, a major challenge worldwide is to understand and predict how changes in social organization and dynamics resulting from urbanization will impact the interactions between nature and society.

The increasing concentration of people in cities presents both opportunities and challenges toward future scenarios of sustainable development. On the one hand, cities make possible economies of scale in infrastructure and facilitate the optimized delivery of social services, such as education, health care, and efficient governance. Other impacts, however, arise because of human adaptation to urban living. They can be direct, resulting from obvious changes in land use [e.g., urban heat island effects and increased green house gas emissions ] or indirect, following from changes in consumption and human behavior, already emphasized in classical work by Simmel and Wirth in urban sociology and by Milgram in psychology. An important result of urbanization is also an increased division of labor and the growth of occupations geared toward innovation and wealth creation. The features common to this set of impacts are that they are open-ended and involve permanent adaptation, whereas their environmental implications are ambivalent, aggravating stresses on natural environments in some cases and creating the conditions for sustainable solutions in others.

These unfolding complex demographic and social trends make it clear that the quantitative understanding of human social organization and dynamics in cities is a major piece of the puzzle toward navigating successfully a transition to sustainability. However, despite much historical evidence that cities are the principal engines of innovation and economic growth, a quantitative, predictive theory for understanding their dynamics and organization and estimating their future trajectory and stability remains elusive. Significant obstacles toward this goal are the immense diversity of human activity and organization and an enormous range of geographic factors. Nevertheless, there is strong evidence of quantitative regularities in the increases in economic opportunities, rates of innovation, and pace of life observed between smaller towns and larger cities.

In this work, we show that the social organization and dynamics relating urbanization to economic development and knowledge creation, among other social activities, are very general and appear as nontrivial quantitative regularities common to all cities, across urban systems. We present an extensive body of empirical evidence showing that important demographic, socioeconomic, and behavioral urban indicators are, on average, scaling functions of city size that are quantitatively consistent across different nations and times [note that the much studied “Zipf's law” for the rank–size distribution of urban populations is just one example of the many scaling relationships presented in this work]. The most thorough evidence at present is for the U.S., where extensive reliable data across a wide variety of indicators span many decades. In addition, we show that other nations, including China and European countries, display particular scaling relationships consistent with those in the U.S.

Via The Atlantic Cities' Emily Badger, meanwhile, I came across "Urban characteristics attributable to density-driven tie formation". Authored by Wei Pan, Gourab Ghoshal, Coco Krumme, Manuel Cebrian, and Alex Pentland, and originally presented in June 2012, the paper makes some interesting claims.

In this paper we propose social tie density (the density of active social ties between city residents) as a key determinant behind the global social structure and flow of information between individuals. Based on this we have described an empirically grounded generative model of social tie density to account for the observed scaling behavior of city indicators as a function of population density.

The model predicts that social tie density scales super-linearly with population density, while naturally accounting for the narrow band of scaling exponents empirically observed across multiple features and different geographies. We note that this is achieved without the need to recourse to parameter tuning or assumptions about modularity, social hierarchies, specialization, or similar social constructs. We therefore suggest that population density, rather than population size per se, is at the root of the extraordinary nature of urban centers. As a single example, metropolitan Tokyo has roughly the same population as Siberia while showing remarkable variance in criminal profile, energy usage, and economic productivity.

We provide empirical evidence based on studies of indicators in European and American cities (both categories representing comparable economic development), demonstrating that density is a superior metric than population size in explaining various urban indicators.

Our argument suggests that the reasons for creating cities are not that different from creating work environments like research institutions. While current technology makes remote communication and collaboration extremely easy and convenient, the importance of packing people physically close within each other is still widely emphasized. We argue that cities are operating under the same principle|as a consequence of proximity and easy face-to-face access between individuals, communication and ultimately productivity is greatly enhanced.

We of course note certain caveats and limitations of our study. The density of social ties is intrinsically a function of the ease of access between residents living in the same city. Consider the example of Beijing in China, which has a very high population density. Due to its traffic jams, Beijing currently is de-facto divided into many smaller cities with limited transportation capacities between them and consequently may not demonstrate a higher social tie density than other cities with a much lower population density. Thus a direct comparison of the model predictions with a similarly dense area such as Manhattan is not feasible.

[. . . ]

A number of theories of urban growth suggest the importance of specialist service industries, or high-value-add workers, as generative models of city development. While our model does not disprove these theories, it provides a plausible and empirically-grounded model that does not require the presence of these special social structures. The other theories must therefore appeal to different sorts of data in order to support their claims. Cities are one of most exceptional and enduring of human inventions. Most great cities are exceptions in their own right: a New Yorker feels out of place in Los Angeles, Paris, or Shanghai. However, this exceptionalism may be more due to our attention to human-scale details than tothe underlying structures. In this paper we have presented a generative theory that accounts for observed scaling in urban growth as a function of social tie density and the diffusion of information across those ties. It is our hope that this provides both a foundation for the commonalities across all cities and a beginning point for which divergence between specifc cities can be explored.

In Badger's interview, Pan suggests that the enormous benefits of urban life start to flatten out once urban areas pass the 40 million mark.

What might this mean? Well, via io9, I came across the April 2012 McKinsey Global Institute report"Urban America: US cities in the global economy", by authors James Manyika, Jaana Remes, Richard Dobbs, Javier Orellana and Fabian Schaer. It makes the claim that the United States is uniquely highly urbanized, and hence uniquely prosperous.

Today, large US cities have more weight in the US economy than do large cities in any other major region. In 2010, 259 large US cities generated almost 85 percent of US GDP. During the same period, large cities in Western Europe accounted for less than 65 percent of the region’s GDP. Among emerging regions, metropolitan China accounted for 78 percent of China’s GDP and the large cities of Latin America contributed 76 percent to regional GDP.

Large US cities have such relative economic weight for two reasons. First, they are home to 80 percent of the population compared with less than 60 percent in Western Europe. Second, they have a relatively high per capita GDP premium. The average per capita GDP of large US cities is almost 35 percent higher than in smaller cities and rural areas; in Western Europe, this premium is about 30 percent.

The relative weight of different regions in the world economy changes when we home in on the economic clout of their large cities. Even though Western Europe’s GDP exceeded that of the United States by nearly 10 percent in 2010, the combined GDP of large US cities exceeds that of large Western European cities by more than 20 percent.

It is America’s cities that explain why the United States continues to enjoy higher per capita GDP than Europe. The higher share of US urbanites—and the fact that they command a larger per capita GDP premium over US smaller towns and rural areas than do their European counterparts—explains three-quarters of the per capita GDP gap between the two economies.

The nation’s largest and well-known megacities of New York, New York, and Los Angeles, California, will continue to prosper. New York is on course to remain the second-largest city by GDP in the world in 2025, and Los Angeles to rise from sixth place today to become the fourth-largest city. But the weight of these megacities in the US economy is not decisive to the overall importance of cities in the United States. London and Paris have a smaller share of the overall Western European population—6 percent, compared with the combined population of the US megacities of 10 percent of the total US population—but they enjoy a significantly higher per capita GDP premium than their US counterparts. Paris and London contribute 9 percent to Western Europe’s overall GDP, compared with the 13 percent contributed by New York and Los Angeles.

Instead, the true vigor of America’s urban economy comes from a broad base of dynamic middleweights and the relatively high per capita GDP they achieve. There are just over 255 middleweight cities in the United States, compared with just over 180 in Europe. And they generate more than 70 percent of US GDP today, compared with just over 50 percent in Western Europe. In fact, the top 28 US middleweights alone contribute more than 35 percent of US GDP. The dynamism of middleweights in the United States is a characteristic of today’s global urban expansion, making them an interesting group to understand for both US and global growth prospects.

I do wonder whether comparing the United States to western Europe was the best thing to do, not least since despite western Europe's integration within the European Union the region's nation-states and their frontiers are still quite relevant. The argument doesn't seem immediately implausible, though, and has obvious implications on regional population balances within the European Union and its various member-states (and between the member-states). Should Europeans, for instance, try to promote increased urbanization and the growth of large cities to compensate for shrinking workforces? What of other world regions?