Merry Christmas and a Happy New Year to Demography.Matters' Readers

As we get ready to turn the page on another year I think it is due time to wish the readers and commenters of Demography.Matters a Merry Christmas and a Happy New Year. We realize that the latter part of 2007 has been somewhat meager with respect to normal tradition here at Demography.Matters but we hope that our readers will be able to forgive us. We have of course not been idle and I am certain when I say that the work we have been doing of a more intense data collecting nature will serve us well indeed in our future work here at Demography.Matters. Moreover I am happy to see that our readers, new as well as old, are ready to engage in interesting and intelligent commentary most recently proxied by the enlightening discussion following Edward's post on the demographics of the US. In a year where Al Gore secured himself the nobel prize for putting the climate issue on the agenda you cannot help but feel that some countries would be better off if somebody explained to them a little more emphatically their inconvenient truth with respect to demographics. Here at DM at least we will keep on churning in the new year.

I leave you with some snippets and light reading suggestions for the holidays.

Firstly and really as a reference to the post trailing this one on the demographics of the US (see link above) a recent piece in the Washington Post caught my attention.

For the first time in 35 years, the U.S. fertility rate has climbed high enough to sustain a stable population, solidifying the nation's unique status among industrialized countries. The overall fertility rate increased 2 percent between 2005 and 2006, nudging the average number of babies being born to each woman to 2.1, according to the latest federal statistics. That marks the first time since 1971 that the rate has reached a crucial benchmark of population growth: the ability of each generation to replace itself.

More information can be found in the article which conforms well with the general discussion such as it has been going on here at DM. The second article I want to emphasise comes from the extended Christmas edition of the Economist. It is called 'Census Sensitivity' and talks about the difficult process of counting people by quantitative as well as qualitative measures. Finally, the Economist also has a piece up on the hunter-gatheres which I found very interesting and which I am sure will interest our readers.

Having presented these small snippets I will depart wishing you all a Merry Christmas and a Happy New Year. We will resume posting here at DM again in the new year barring some kind of dramatic unforseen events.

Best Wishes

The DM team.

Some Reflections on US Demographic Data

Well, as promised in the comments to my last post, here is a little bit of US demographic data. This isn't the first time I have taken a brief look at US demography on this blog, and it surely won't be the last one.

This was an early attempt, where I tried to link the rebound in the US TFR that we can see from the mid 1970s to the start of modern-era large-scale immigration and to a slowing down in the birth postponement process in the US 'majority' population. The consequence of this have been a 'recovery' of those previously missing births (this process has also been noted in a number of societies in North Western Europe, for example in the United Kingdom at the present time, following the wave of migration from Eastern Europe). The US rebound can be clearly seen in the following chart:

This "recovery" trend continues, as outlined in the summary which accompanies the US Births Data for 2006 (preliminary) published earlier this month by the National Center for Health Statistics:

As a result of the increases in the birth rates for women aged 15-44, the total fertility rate –- an estimate of the average number of births that a group of women would have over their lifetimes –- increased 2 percent in 2006 to 2,101 births per 1,000 women. This is the highest rate since 1971 and the first time since then that the rate was above replacement -– the level at which a given generation can replace itself.

Now in general terms US demography can, I think, be given a pretty clean bill of health, as can be seen from the very solid looking population pyramids the US generates, and especially moving forward (see examples at the end of this post). The underlying situation is pretty stable and pretty sustainable, or so at least it seems. In part the US position is a result of the pretty unique movements in median age which occured in the 20th century (by developed country standards). The US seems to have found the "elixir of youth", and for this reason enters the next "ageing" stage from a comparatively priviledged position. This can be seen from the following median age chart.

What is most striking about the above chart is the way in which the US median age actually drops after the mid 1950s until the mid 1970s. This is a very surprising phenomenon, and I doubt anyone has really studied this in depth, especially since up to the present time noone really imagined that such shifts in median age were very important. Recent economic phenomena have of course started to put all of this back on the agenda, and I imagine someone, somewhere will get into this at some point.

It would be very interesting to understand this whole process a lot better, to see what can be learned from it, especially in the contaxt of trying to arrest rapid ageing in the not-yet-rich, newly developing countries. Basically the US in 1970 seems to have had the sort of median age which an Argentina or a Brazil have today, and yet it was the most developed economy of that time. What does this mean? What can we calibrate here?

Life Expectancy

Moving on slightly, while as I say in an ageing context US demography is very solid, there are negative elements. The first among these is evidently life expectancy, and in particular male life expectancy? This is significantly below that which is to be found in many other developed economies. What does this mean, and what economic conclusions can we draw from this? We know Americans work a lot, is this a case of burning the candle at both ends. (See this fascinating article from Colin Speakman et al: Living Fast, Dying When? The Link between Aging and Energetics, for an extensive review of the issues involved here).

Are life style and diet important? Certainly the recent rise in obesity and diabetes is setting alarm bells ringing everywhere. Researcher Jay Olshansky, in a controversial article in the New England Journal of Medicine in 2005, even went so far as to suggest that if the increase in obesity was left unchecked it could arrest or even reverse the whole trend for life expectancy to increase. Evidently in the context of the growing discussion of the rise of the so-called metabolic syndrome (diabetes and obesity, basically) these life expectancy problems may become aggravated, and this may sour the inter-generational debate somewhat.



At the end of the day what we have in the life expectancy department are a large number of unanswered questions. We have little real idea at this point, for example, of whether - once life expectancy reaches a certain point - we are really increasing our economically productive life to any significant extent, or whether we are increasing the number of years of (more or less pleasant, according to individual circumstances) dependent life. A useful summary of the whole state of the art in the great life expectancy debate can be found in this piece from the population reference bureau.

Immigration

Immigration obviously forms a significant part of the US population growth story, and indeed immigration has had a major effect on the size, distribution, and composition of the U.S. population. According to data from the Population Reference Bureau, immigration contributed at least one third to the total population increase which took place between 1990 and 2000, during which time the number of foreign-born U.S. residents rose from almost 20 million to over 31 million.

Using rough and ready calculations based on the recent flows, the PRB estimate that the number of foreign-born persons (first generation migrants) may well to rise from 31 million in 2000 to 48 million in 2025, and if this is the case the foreign-born share of the U.S. population will rise from around 11 percent to about 14 percent. Accordingly, the number of second-generation Americans—the children of immigrants—will continue to increase.

In 2000, first- and second-generation Americans constituted about 21 percent of the U.S. population. If net legal and illegal immigration were to average around 820,000 per year, first- and second-generation migrant Americans will constitute about one-third of the U.S. population by 2025. Of course immigrants have played an important part in the recent increases in the US labor force simply because they tend to be of working age. Immigrants accounteded for nearly 50 percent of the total labor force increase between 1996 and 2000, and as much as 60 percent of the increase between 2000 and 2004. If net immigration were to run at the rate of 1 million per year, new immigrants and their children would effectively account for all of the growth in the U.S. labor force between 2010 and 2030 (PRB estimates). Of course all this begs some very important questions about the kind of economic growth we have been living on. For all the talk about productivity surges and total factor productivity it is important to take note of the fact that a good deal of economic growth is very factor intensive (ie it requires increases in the inputs of labour and capital). This point is important since while the availability of capital over the period from now to 2025 may well be pretty much guaranteed (all those ageing populations busy saving) labour force increases may be much more difficult to generate, as the traditional sources of migrant flows (and especially for the less skilled types of work) begin to dry up due to a combination of declining fertility and economic development in the countries concerned.

Before leaving this topic it is interesting to note that even while the total number of foreign born in the US continues to rise, the share of foreign born in the total population still is not as high as it was in 1910, although it is of course still climbing.

It is also interesting to note how the turn-around in the decline of the foreign born share (in the mid 1970s) more or less coincides with the fertility rebound.




The rebound is the product of a combination of two components (birth recovery among the US population of European origin who had been "postponing" and the arrival of a higher fertility migrant population, largely from Latin America, but it is hard to attribute weightings to each of these. What is clear is that the US aggregate population dynamic is a product of the overlaying (one on another) of two seperate dynamics, as I attempt to explain in this post (a tale of two pyramids). Just to remind us here are the local pyramids for each population. First the white non-hispanic one.



As can be seen, this pyramid is very similar to the ones we can find for some European countries (the UK, Sweden etc). And here is the hispanic pyramid.



Teenage Births

Another factor which has been something of an ongoing cause for concern among those who have been thinking about the US demographic situation is the relatively high level of teenage pregnancy which has been a factor over the years in the comparatively high achieved fertility rate. Now this problem, as can be seen in the chart below had been reducing, but out of the blue in 2006 we seem to have an uptick.



Of course as the CDC say it is far to early to attribute any significance at all to this, be the development is, in itself, interesting.

The report shows that between 2005 and 2006, the birth rate for teenagers 15-19 years rose 3 percent, from 40.5 live births per 1,000 females aged 15-19 years in 2005 to 41.9 births per 1,000 in 2006. This follows a 14-year downward trend in which the teen birth rate fell by 34 percent from its all-time peak of 61.8 births per 1,000 in 1991.

"It’s way too early to know if this is the start of a new trend," said Stephanie Ventura, head of the Reproductive Statistics Branch at CDC. "But given the long-term progress we’ve witnessed, this change is notable."

The largest increases were reported for non-Hispanic black teens, whose overall rate rose 5 percent in 2006. The rate rose 2 percent for Hispanic teens, 3 percent for non-Hispanic white teens, and 4 percent for American Indian or Alaska Native teens.

The birth rate for the youngest teens aged 10-14 declined from 0.7 to 0.6 per 1,000, and the number of births to this age group fell 5 percent to 6,405. The birth rate for older teens aged 18-19 is 73 births per 1,000 population –- more than three times higher than the rate for teens aged 15-17 (22 per 1,000). Between 2005 and 2006, the birth rate rose 3 percent for teens aged 15-17 and 4 percent for teens aged 18-19.

Global Rebalancing

Another issue which the US of course faces is the externally-related one of the changing global demographic enivironment. Whilst demographically speaking the US may well be reasoanbly stable, many parts of the world are evidently not, and some of these parts - Russia or China, for example - are evidently not. One of the strong arguments I have been advancing on this blog over the years boils down to saying (the obvious) that no man is an island, and even less so a country which is effectively wired-up to a globalised world economy. Changes elsewhere, it is clear, will be noticed inside the US.

One of the most obvious areas where this is currently the cases is associated with the role which the US dollar has been playing as a unit of measure for the global accounting system in recent decades. And this factor certainly does have a demographic component, since it is in large part the relative size of the US economy which lead to the transition from reliance on the UK pound sterling to use of the US dollar in the first place. Now demographics are once more at work, in the shape of the rapid arrival of a new set of potentially extraordinarily large economies on the global scene.

So it would seem that the US economy does now have something of a demographically driven adjustment problem (not in terms of the small adjustment which will be necessary as a result of the sub prime issue, which I think, incidentally, US demographics will make a lot less enduring than some imagine) but rather insofar as that the burden of carrying what is known among economists as Bretton Woods II had fallen squarely on the shoulders of the US dollar, and this reliance had the effect of encouraging people to accumulate rather more dollars than they actually needed. With the rise of the new global giants (also known as the BRICs) this system now seems to be in the process of unwinding with an ongoing recoupling of the global economy a recoupling which will in and of itself imply a reduced role and lower profile for the US economy (hene the interminable "decoupling" debates), associated with an ongoing diversification of currency reserves out of the dollar. As Claus Vistesen ably puts it in this post here:

You see, it appears that the old maid is a fitting metaphor for what at the moment seems to be a global game being played about not ending up being stuck with the Dollar.....the game is played and apart from the USD starring it could also seem as if a derivative of the old maid would be who in fact must step up to take the role for the USD as the structure of Bretton Woods II is ground down. Here of course, it will soon (i.e. after my exams) be time to re-visit old arguments but for now I will merely note that I always saw the current structure as very strong and fragile at the same time. It was/is very strong quite simply because de-coupling/re-balancing in the traditional sense where Europe and Japan ascends to take over the throne of the US would be virtually impossible. The fragile nature then comes in as an immediate consequence of this since if Europe and Japan cannot step up to the task who can and indeed will? As I say, fundamentals will tend to drive this and no-doubt the process of global re-coupling whereby the likes of India, Brazil, and Turkey takes over the clout of the US will materialize itself but a lot of glasses might end being shattered in the process.

So we are passing through a delicate moment, that part is clear. The world economy is changing fast, as revealed by the following chart which shows the shifting relative dollar values of the Japanese, the US and BRIC economies as % shares of global GDP. As can be seen the relative decline in the value of US GDP is virtually mirrored by the rising share of the BRICs.

Basically, if we can call the second half of the 20th century the "modern growth period", there were in fact two separate growth processes at work, a growth in wealth and income in the developed world, and an accumulation of population elsewhere. Indeed arguably it was the very rapid rise in population numbers (a by-product of the very high fertility levels) which was responsible for the stagnation in income and wealth which took place in these countries. Now, with fertility rates falling rapidly more or less everywhere , this balance is changing, and the former "underdeveloped" countries are started to accumulate not population but wealth, with the significant detail that they are doing this from very large population bases, with all the impact that this has in terms of global GDP shares and resource (climatic) pressure. Rather than calling ours a post-modern growth era, perhaps we would be better with "the epoc of the great unwind".

So, and briefly summing up, anyone in their right minds would be more than happy to trade population pyramids with the US of A, but this does NOT mean that the whole US situation is without its own very specific problems, different as they may be.

Appendix: US Population Pyramids

A note on one Canadian periphery

My birthplace, the Canadian province of Rrince Edward Island, population 140 thousand, isn't often considered in relation to wider demographic trends. While it's true that the Island is peripheral even in the Canadian context, with its population of 140 thousand being smaller than those of a dozen Canadian cities and an economy based primarily on the service sector (including tourism) and slowly declining primary industries like agriculture and fishing, it's also true that Prince Edward Island's demographic prospects and futures prefigure the demographic issues facing peripheral areas throughout the First World. Scott Peterson wrote last week about how falling populations is reshaping the landscape of many depopulating parts of Europe; Prince Edward Island has faced this trend for more than a century. Although there is now intense human presence on the landscape of Prince Edward Island, with more than half of the Island's land being used for agricultural or other purposes, in the late 19th century an evenly distributed population of farmers occupied the near-totality of the Island's territory. This geographic distribution of population changed when, soon after Canadian confederation, Islanders began to participate in the ongoing mass emigration from Atlantic Canada.

In the nineteenth and early twentieth centuries the exodus was primarily to the ‘Boston states.’ It reached crisis proportions in the 1880s when our industrial boom began to go bust. Despite efforts to staunch the outward flow, it continued unabated until the United States closed the border during the 1930s Depression. Scholars estimate that between 1851 and 1931 some 600,000 people left the Maritimes, nearly 50 percent of the population still present in 1931. Following the Second World War, out-migration again became acute as villages dependent on farming, fishing, forestry, and mining expelled their people to the booming Ontario economy. The oil crisis of the 1970s shifted the emphasis to jobs in Alberta.

[. . .]

Scholars debate the impact of out-migration asking whether it was a cause or a result of the region’s poor economic showing. It was undoubtedly both. Living on the edge of two cradles of industrialization in the nineteenth century – New England and the St Lawrence-Great Lakes heartland – it was difficult to establish a third node of development on the Atlantic coast. People were inevitably attracted to the new growth centres. With dwindling numbers, provincial grants declined as did political clout in Ottawa. Economic growth thus became even more difficult to sustain against the centralizing tendencies of Canada’s National Policy. Head offices of banks and businesses followed the money and people were obliged to do likewise. It is unclear whether these trends can ever be reversed.

As a province with a relatively more agricultural economy than its neighbours, Prince Edward Island experienced relatively higher out-migration, with outright population decline being the main trend for most of the first half of the 20th century and many territories which once were farmed being allowed to return to nature. Out-migration slowed down over the second half of the 20th century, as federal transfer payments began to subsidize seasonal economies, the standard of public services improved sharply, and the tourism sector began to take off. The net resutl of all this is that Prince Edward Island faces less potentially damaging demographic challenges than any of the other three Atlantic Canadian provinces. For instance, the Island's fertility and birth rates are higher than in most other Canadian provinces, while the province actually benefits from interprovincial migration: more Canadians move to Prince Edward Island than leave. The tourism sector plays a major role in this second trend; tourism campaigns have successfully promoted an image of Prince Edward Island as a pleasant territory with beautiful natural scenery and an engaging, friendly population, this industry attracting migrants and helping to boost levels of employment. If Prince Edward Island's economy didn't make spectacular leaps forward, this economic strategy may well have helped the province avoid the massive out-migration that has dominated Newfoundland and Labrador's demographic trends for decades. It's worth noting that this strategy isn't dissimilar from Spain's recent economic and population growth, driven so heavily by (among other migratory trends) the movement of northern Europeans to the Costa del Sol and other tourist destinations.

All of this isn't to say that Prince Edward Island doesn't face serious demographic issues. The definitely sub-replacement fertility rate, among other factors, ensures that the number of students (and future workers) in Prince Edward Island may fall by one-fifth by 2020, and Prince Edward Island's development minister has warned that the aging of Island's population and the province's development into a "retirement province" risks creating serious labour shortages, especially if immigrant retention rates don't rise. Even now, as Zena Olijnik ("Immigration: Give us your skilled") wrote recently in Canadian Business, flawed guest worker programs and local populations unwilling to undertake dirty and dangerous jobs are threatening the viability of some industries, leaving some people in these same outlying areas to propose economic revitalization strategies like wildly uneconomic ferry routes. The only thing that can be said about these issues is that the Island has managed to buy itself some time in which to adapt to its new demographic environment. Here's to hoping that this time will be well-spent.