Fri, Jul 05, 2019 - Page 9 News List

Demographic decline is not necessarily a bad thing for nations

By Adair Turner

Every two years, the UN issues its latest estimate of future population trends. Its projection this year reveals a stark divide.

Across all of Asia, Europe and the Americas, population stability has already been achieved or soon will be, with the median projection suggesting an increase from 6.4 billion today to 6.5 billion in 2100, a rise of just 2 percent.

By contrast, the UN projects that Africa’s population will soar from 1.34 billion to 4.28 billion.

Beyond a few decades, population trends depend crucially on forecasts of future fertility rates, which are inherently uncertain — but across all of the world’s developed economies, the current fertility pattern has held for so long that it seems likely to remain a stable feature of human society.

In all economically advanced countries, fertility rates fell fast between the late 19th century and the 1920s, as contraception became increasingly available, and women were increasingly liberated from the domestic sphere by education and greater participation in the formal workforce.

However, after falling below 2 percent in many countries between the world wars, fertility rates rose again in the immediate post-war era, reaching about 2.4 in northern and western Europe, and just over 3 in North America.

In the half-century since 1970, a remarkably constant pattern has reigned, across countries and across time. Since northern and western European fertility rates fell below 2 percent in the early 1970s, and southern European rates followed a decade later, they have never again risen above 2, with a current European average of 1.6 and not a single country above 1.85.

Canada’s fertility rate has never been above 2 percent since the early 1970s and currently stands at 1.53; and the US fertility rate, having fallen below 2 in the 1970s, rose to just above that mark in the 1990s only because recently arrived immigrants from Latin America initially had higher fertility rates than the non-Hispanic population.

However, with Hispanic fertility rates now falling fast, today’s US average is 1.78.

In all countries that have achieved middle-income status, and where women are well educated and have reproductive freedom, fertility rates are at or below replacement levels.

We should be wary of declaring a universal rule of human behavior, but it seems this might be one. Rich, successful human societies choose fertility rates that imply gradual population decline.

Much conventional commentary laments the inevitable consequence that the “working age” population, often rigidly defined as people aged 15 to 64, must decline as a ratio to those aged 65 and above.

If fertility rates cannot be coaxed higher, it is often argued, immigration must be embraced as the only answer to impending labor shortages.

However, in a world of rapidly expanding automation potential, demographic shrinkage is largely a boon, not a threat.

Our expanding ability to automate human work across all sectors — agriculture, industry and services — makes an ever-growing workforce increasingly irrelevant to improvements in human welfare. Conversely, automation makes it impossible to achieve full employment in countries still facing rapid population growth.

India’s overall fertility rate has now fallen to 2.24 percent, and is below 2 in all of the country’s more economically successful states such as Gujarat, Maharashtra and Kerala, with the national average only kept above 2 by much higher rates in the poor states of Uttar Pradesh and Bihar.

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