Let's Talk Long-Term Demographics
As if we don’t have enough to worry about already, I read this piece yesterday, suggesting that demographic trends in America are going the way of, well, the rest of the Western world. This concerns me. Demographic slumps are depressing insofar as they tend to signal a lack of hope and vitality in a nation’s population. Even more significantly, they can precipitate some very serious longer-term problems. As a youngish person, I want people to be having babies now, so that when I do eventually reach retirement age, there will be a nice crop of younger people in place to run the country and keep the economy going. But, as countries like Germany and Japan have discovered, steady birth rates are not something we can take for granted in our brave new world. So the question becomes: how can we reverse these demographic trends?
The short answer is that it’s hard. Once they grew out of the “overpopulation” phase, some European countries started trying to spur higher birth rates with a slate of pronatalist policies, including government subsidy for pre-natal care and delivery, lengthy paid parental leaves, and government-sponsored childcare. Some countries have been more inventive. Russia apparently tried instituting a regular “day of copulation” in which workers were given a half-day off so they could go home and have sex. (NB, I’ve seen this mentioned on a few blogs, but have not found a reputable corroborating source. It sounds like the kind of wacky thing the Russians might try, though. Makes you think of 1984 and “our duty to the party”, eh?)
It seems that these measures have had at least a modest effect. Birth rates in Germany, for example, have gone up since the implementation of aggressive pronatalist policies. Of course, as a conservative I implicitly find such interventions distasteful, although it does also occur to me that pronatalist benefits might be a needed counterbalance to entitlements for the elderly. In most human societies, children were the primary retirement plan, and raising them was an investment in one’s own future as well as theirs. Nationalizing benefits for the elderly opens the opportunity for the childless to be “free riders”, enjoying the support of other people’s children without having to invest in raising their own. From one perspective, then, pronatalist benefits could be seen as just compensation to parents. Would there be a way to offer these without giving government an objectionable degree of control over family life?
Given the present financial state of our nation, such questions are mostly academic, and the obvious solution to the demographic problem (along with many other problems) is to fix the economy. People will have more children if they feel financially secure. Unfortunately, I think the reality is that the economy probably isn’t going to be surging back to flushed, rosy-cheeked health anytime in the near future. We need to consider ways to make families feel more secure even in an unstable economy.
What I want to see is a more flexible and dynamic labor market, which opens opportunities for people to prove themselves and potentially learn on the job. For a whole host of reasons, credentialing has become the main ticket to employment nowadays, and this makes people more reluctant to take on serious responsibilities (such as parenting) because these present such a significant handicap in the lengthy and tortuous credentialing game. If people could move in and out of the workforce more easily, parenting would become less daunting financially. It seems to me that our resume-building process is incredibly inefficient, and the hamsters running on the resume-wheel are mainly young people, who should be expending that same energy to start families.
Other thoughts? Are there better ways to encourage people to have babies? Or can someone assuage my worries that these demographic trends portend an ugly future?
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Comments:
Jul '12
Re: Let's Talk Long-Term Demographics
I am doing what I can to reverse the trend. Have 4 and will have as many as the good Lord allows.
May '11
Re: Let's Talk Long-Term Demographics
America certainly doesn't have a problem with the "conception rate" just the birth rate.
Jun '10
Re: Let's Talk Long-Term Demographics
Great post.
If you want to check out each nation's fertility rate (remember that in order to eventually reach population stability, the fertility rate needs to be about 2.10), the best source of information is the CIA World Factbook.
A variety of factors affect fertility. Despair about the future is one. In Russia, which is experiencing actual population loss right now, men drink themselves to death--it has a horrible life expectancy for males; if I were a Russian woman, I'd be pessimistic about the future.
Complacency is another reason. Raising children, while ultimately the best thing we can do, feels like a toothache a fair amount of the time. A government safety-net eliminates the need for children as your ultimate old-age security.
I think the single biggest factor is religion. Religious people have more kids (as a Mormon, I speak from experience). My favorite line from America Alone is: "“The design flaw of the radically secularist [Europe] is that it depends on a religious-society birth rate.”
I fear that an existential crisis is necessary will be necessary. Religiosity is decreasing in America, so it's going to have to be something significant.
Edited on September 12, 2012 at 1:10amMay '11
Re: Let's Talk Long-Term Demographics
Actually, many are finding that the family disposable income changes very little when the mother stays home due to the reduced expenses of child care etc.
Jun '10
Re: Let's Talk Long-Term Demographics
Does that represent the actual cost of the services provided, or is it inflated by something, and if so what?
Do we think market-driven competition could drive that cost down significantly, or is that just the intrinsic price of modern medical technology?
Mar '12
Re: Let's Talk Long-Term Demographics
Michael C19Fan: David Goldman, aka Spengler, has documented how TFR has collapsed in Iran and throughout the Arab world. I doubt anybody would describe that part of the world as having "abandoned religion".
I am not aware of any Islamic country with a negate birthrate. I noted that large swathes of Europe are in trouble. In the Islamic countries I believe that there is a high participation in religion. I don't see Islam the same as Judaism or Christianity. The Jews and Christians largely believe in variations of free will while Islam believes in the will of God which seems to be a sort of fatalism.
At this point in time, it appears that Islam is not suffering some of the moral issues that the west is burdened with, albeit that Islam does suffer in other ways from that particular belief system.
Feb '12
Re: Let's Talk Long-Term Demographics
TR,
I'd add cultural expectations of parents to your list of reasons. I don't know how much of an American problem it is, but I've been told one of the many problems with the Japanese, Spanish, and Italian birthrates is that while feminism has foisted jobs and careers on women, it hasn't had much luck in convincing men to step up domestically. Most women apparently have one child and then realize they're expected to perform all the traditional female roles in addition to the new ones -- and then quickly decided to never have another kid.
To be fair, I can't blame them. My mother worked my entire childhood, but my dad was there to help with housework, do the actual homeschooling, and take on a Mr. Mom role to ensure everything that needed to happen in the household got done.
Mar '12
Re: Let's Talk Long-Term Demographics
The old model for old age security: Have enough children and make sure they had good training and work ethics to assure your old age would be provided for.
The new model: Tax all productive workers to provide a minimum standard of life for all elderly, whether they had had children or raised them to be productive workers or not.
After 70 years, the "tragedy of the commons" is kicking in: More and more of each succeeding generation have no children, spending their surplus wealth on themselves, and many that do have children feel no urgency to train them to be productive citizens. Everyone assumes that taxes on other people's children will provide for their retirement as well. It doesn't help that the costs of raising children (especially college) have risen astronomically.
Between the social old age programs and the high costs of middle class child-rearing, having children is perceived as a luxury good. In addition, the post-industrial state is signaling (with enduring high unemployment rates) that it needs less and less human workers to produce goods and services. The wonder is that birth rates are still as high as they are.
Mar '11
Re: Let's Talk Long-Term Demographics
<p></p>Having kids is *pricey*, even when done on the cheap.
Steyn had a great idea: instead of the Child Tax Credit and the rest of the tax code complications, just divide household income by the number of people living there.
That would really change things in terms of incentives, and quite rightly. After all, taxes ought to come out of net income, not gross - and when one has kids, any substantial "disposable" income becomes a pipe dream.
Such a change would also encourage fostering and older-child adoption, both of which are much in need.
Feb '12
Re: Let's Talk Long-Term Demographics
Joseph Stanko
Does that represent the actual cost of the services provided, or is it inflated by something, and if so what?
Do we think market-driven competition could drive that cost down significantly, or is that just the intrinsic price of modern medical technology? · 2 minutes ago
Well, problem one is that almost no one knows what the "actual" cost of the services provided might be. The hospital knows what they charge insurance companies, and Medicare/aid, and people who didn't make arrangements ahead of time, but apparently hospitals don't actual have firm numbers on how much exactly things actually costs.* This is why you can often negotiate prices down 75% or more by paying cash ahead of time.
*Source: my dad, ultrasound tech for a teaching hospital.
Part of the costs for a delivery is the need for malpractice insurance on the OB, which apparently can cost $250K/yr or more. This obviously drives up costs. Additionally, the battery of tests and sonograms that are considered the standard of care are always become more elaborate, partly as healthcare evolves and partly as CYA medicine.
(continued)
Jun '10
Re: Let's Talk Long-Term Demographics
Amy Schley: TR,
I'd add cultural expectations of parents to your list of reasons. I don't know how much of an American problem it is, but I've been told one of the many problems with the Japanese, Spanish, and Italian birthrates is that while feminism has foisted jobs and careers on women, it hasn't had much luck in convincing men to step up domestically. Most women apparently have one child and then realize they're expected to perform all the traditional female roles in addition to the new ones -- and then quickly decided to never have another kid.
Amy: Each country has its own variety of factors, and I think you've identified a significant one.
I do think that, going country by country (most especially in Europe), the combination of an old-age safety net and a severe decline in religiosity are central.
The safety-net is at great long-term risk. Religiosity is one that isn't fixed in a day.
One other factor is urbanization. From the age of about ten on I was of economic value on our family-farm. The economic equation is dramatically different outside the agricultural world.
Edited on September 12, 2012 at 1:37amFeb '12
Re: Let's Talk Long-Term Demographics
As for how to reduce costs:
Increasing consumers' sensitivity to price signals could help by pushing more deliveries, particularly those of young healthy women, into utilization of midwives and other non-MD services.
Radically reform tort law and malpractice insurance structures to push more of the liability risks out of the profession. (Doctors follow the same law of averages as everyone else: the bottom 10% cause 90% of the problems.) This could lower malpractice insurance premiums for the competent docs.
Finally, force hospitals to actually publish prices to allow for price competition and reduce the fungibility of income. For example, an ultrasound should cost (time spent by the tech to perform it * hourly wage) + (time spent by the doctor to review it * hourly wage) + (total cost of ultrasound machine / number of ultrasounds performed over the expected life of the machine) + (overhead cost per patient).
I don't know what that number is, but I'm willing to bet it's a good deal lower than the $1K or more that a patient is charged.
May '11
Re: Let's Talk Long-Term Demographics
Mendel: Great post, Rachel.
The principle of laissez-faire is that economic decisions which are good for the individual will also be good for society. What evidence exists that childbearing - which in many ways is also an economic activity - should be any different?
That is a great point, as usual, Mendal. A declining birthrate does not spell the doom of Western civilization but it does spell the end of the Ponzi scheme of socialism.
Feb '12
Re: Let's Talk Long-Term Demographics
Donald Todd:
I am not aware of any Islamic country with a negate birthrate.
A birthrate of 2.10 is considered necessary for replacement. According to the CIA fact book, the following Muslim countries have a rate below that or "negative" birth rates:
Islam is far from a cure for demographic ills ...
Jun '10
Re: Let's Talk Long-Term Demographics
In most cultures in world history, and in America in the not-so-distant past, most new mothers could rely on a ton of help from grandmothers, aunts, and neighbors. A live-in grandmother, for instance, could handle many of the household and child-care duties and would gladly do so in exchange for her room and board.
Now grandma lives in an expensive nursing home in Florida, and her children have that bill to worry about in addition to hiring baby sitters or paying for professional day care.
Jul '12
Re: Let's Talk Long-Term Demographics
Pilli
Actually, many are finding that the family disposable income changes very little when the mother stays home due to the reduced expenses of child care etc. · 42 minutes ago
This has definitely has been the case in our home. We have actually found we have more disposable income just because of the lack of spending on gas money.
Mar '11
Re: Let's Talk Long-Term Demographics
This argument is often cited (including by myself) as a reason to stop financing retirement benefits through transfer payments.
But to pose the heretical question: would ending Social Security and Medicare actually lead to a significant rise in fertility? For a working couple, buying a smaller house (or renting) and holding off on buying a new car could be safer and less stressful investments in retirement than raising a child and hoping it will be productive enough to support itself and them.
And with the incredible increase of productivity we are still witnessing, is it not possible that a couple with 60 combined years of wages could afford a comfortable retirement without the help of children? My parents - who never earned more than the national median income - are set to do so (and a big thank you to Mom and Dad!).
Jan '12
Re: Let's Talk Long-Term Demographics
Mendel:
I think the main focus should be eliminating incentives which distort the economics of childbearing - including access to healthcare (as Amy described) and the decoupling of retirement expenses from personal savings. Otherwise, let individuals decide for themselves - if society needs more children, the invisible baby hand will send the proper signals. · 4 hours ago
Edited 3 hours ago
What you're overlooking are the 'huge incentives' that are already in place, to encourage unwed mothers. Motherhood provides a steady stream of entitlements to those who choose to live off the government.
Over forty percent of births in America are to unmarried women.
At the same time, our government is lowering the qualifications for welfare and increasing the benefits for these families.
The end result will continue to be that the least productive segment of society has far more incentive to have large families, whilst those who are working and paying their way are finding it ever harder to make ends meet and, thus, postpone or decide against having children.
Over and above the mathmatical certainty of 2.2 live births, there is the spector of the next generation being less and less productive and responsible.
Not a great outlook...
Jun '10
Re: Let's Talk Long-Term Demographics
Amy Schley:
Increasing consumers' sensitivity to price signals could help by pushing more deliveries, particularly those of young healthy women, into utilization of midwives and other non-MD services.
So what about buying, for instance, a Kaiser Permanente Deductible plan? You're paying for care up to an annual deductible, so you're sensitive to price signals, but after that you're covered for major health issues. Also preventative care is covered at no charge including "routine prenatal care visits."
I'm curious why such a plan wasn't included in your list of options? It's available today, at least in some states, so I'm not clear why you say we need "fundamental reform of our healthcare services and insurance industries" when this option is already available. What am I missing?
Edited on September 12, 2012 at 2:15amMar '11
Re: Let's Talk Long-Term Demographics
At the risk of repeating myself, I am still very curious: why should we worry about declining fertility?
If it is a financial question, why can't growing productivity fill the gap, as it has for years?
If it is a cultural question, what proof is there that more populous cultures subdue smaller ones? If that were true, Judaism would have vanished centuries ago and Peruvians would still speak Quecha.
If it is simply a question of keeping our genes from joining those of the stegosaurus, our natural instincts will kick in at the proper time - they always have throughout history.
With all due respect to those who think the ground is falling, the panic over declining birth rates is very reminiscent of left-wing panics over the imminent depletion of Earth's natural resources.