Posts Tagged ‘demography’

making babies in China

Monday, November 23rd, 2015

FT Shanghai correspondent Patti Waldmeir has written yet another, superb column on social policy in mainland China.

Authoritarian governments can achieve many things by decree, but making babies is not one of them. It seems China has a shortage of that essential biological ingredient to power the next phase of the mainland economic miracle: sperm to fertilise the embryos of future workers.

There is a sex shortage, too: one recent survey showed that Chinese white collar workers slave so long in the office that half said they had intercourse less than once a month. Or maybe it has something to do with the fact that a large proportion of 20-somethings still live with their mother (and for that matter, their grandmothers) in cramped urban flats. Surely that’s better than the best contraceptive. ….

Good quality sperm are in such short supply that one Shanghai hospital recently ran an advertisement on social media offering enough money to buy the latest iPhone in exchange for 17ml of the stuff …. “It’s no longer popular to sell your kidney for an iPhone, but now you can easily get one without selling your kidney,” said an ad posted on the official WeChat account of the Shanghai Renji Hospital Sperm Bank ….

Patti Waldmeir, “Wanted: more people to make babies in China“,  Financial Times, 24 November 2015 (metered paywall).

urban versus rural retirement

Sunday, May 4th, 2014

Here’s a pattern familiar to all of us: a retired married couple with an empty nest sell their overpriced home in the city centre and move to the country to enjoy peace, quiet, gardening and fishing. ….But there are signs the trend may be reversing. And indeed, there are some very good reasons why this reversal is a good thing. ….

When you consider the plethora of free or low-cost cultural services available to older adults in London alone – free bus fares, admission to the best museums and galleries in the world, discounts at cinemas and theatre – the question becomes not whether you should retire to the country. Instead, it is “Why leave the city at all?” ….

Among other factors, the inability to drive a car is often an immediate precursor to the greatest threat to elderly wellbeing: social isolation. In other words, retirement and old age spent in a rural setting without close family nearby can be the opposite of idyllic. ….

[F]or those looking to maximise their chances of a comfortable retirement, the signs are pointing in one direction: move to the city!

Norma Cohen, “City living is good for you“, Financial Times, 3 May 2014.

Journalist Norma Cohen is demography correspondent at the Financial Times.

I agree that urban living trumps rural living. I would add that retirees living in high-cost cities like London and New York should – unless they are very affluent – relocate to a less expensive city. Any selected city must, however, offer public parks, cultural amenities and – above all – good public transportation. I relocated from New York to such a city in central Europe, where many attractive, inexpensive cities exist. The United Kingdom also has wonderful, smaller cities where living costs are much lower than London. North America is difficult, because of a car culture and lack of public transportation. Desirable North American cities with good public transit systems (such as New York City and Vancouver) tend also to be very expensive.

demography is destiny

Sunday, February 20th, 2011

Humanity is in the grip of three profound transformations: first, a far greater proportion of children reaches adulthood; second, women have far fewer children; and, third, adults live far longer. These changes are now working through the world, in sequence. The impact of the first has been to raise the proportion of the population that is young. The impact of the second is the reverse, decreasing the proportion of young people. The third, in turn, increases the proportion of the population that is very old. The impact of the entire process is first to expand the population and, later on, to shrink it once again. ….

For the countries with a young population, the immediate challenge is to create a dynamic economy that brings hope of gainful employment. It is surely the failure to do this that most threatens rule by gerontocrats such as Hosni Mubarak. ….

Meanwhile, in high-income countries, older people must work longer than they expected, without making the young believe their opportunities are blocked for what must seem like an eternity. These countries must also balance the fiscal books as the populations age.

In both cases, the young will raise a cry that has surely been heard throughout the ages: “It is not fair.” They are right, no doubt. It never is.

Martin Wolf, “Why the world’s youth is in a revolting state of mind“, Financial Times, 19 February 2011.

Another great column from Martin Wolf. Recommended reading.

schooling, human capital, and signaling

Sunday, March 28th, 2010

Carleton University economist Frances Woolley has an interesting guest post at Worthwhile Canadian Initiative on the implications for policy of schooling as human capital versus schooling as a signal (sorting students by competence).

[I]f what is taught at universities actually makes people more productive, then simply taking university courses should be enough increase earnings. In fact, to get much of a payoff from university education, you have to finish your degree (the “sheepskin effect” ). One reason education pays is that completing a degree “signals” your ability, determination, competence and general stick-with-it-ness. ….

Ontario’s government is urging universities to increase retention rates, so everyone who starts university completes a degree. If the human capital theory is true, then this is sound policy: more students completing university means more human capital means a more productive economy. If, however, the value of university education is as a signal of ability, then one of the most important things that universities do is fail students. Unless some students fail, the ability to complete a university degree confers no special distinction on the graduate.

Whether or not human capital theory is true determines the best response to the demographic challenges much discussed this blog [sic]. If education makes people more productive, then more education can increase the productivity of our economy – possibly enough so that fewer workers are able to support the large number of pensioners.  If, however, education is basically about sorting workers – if people are getting more and more degrees in hope of eventually capturing that one elusive stable professional job with benefits – then the best way of responding to the demographic crisis is to scale back post-secondary education. Doing so would effectively increase the size of the working age population substantially, easing demographic problems.

Frances Woolley, “Human capital: literal truth, fairy tale or myth?”, Worthwhile Canadian Initiative, 28 March 2010.

There is much more. Read the entire post. You will not be disappointed.

My favourite quote on this subject is from Harvard economist Lant Pritchett (1959-):

One way to distinguish the models of productive education from the signaling and distortion hypotheses about micro and macro returns is that the usual model is the MIT “engineering” metaphor in which education is subsequently used in innovation. The signaling model can be thought of as the “Harvard MBA” metaphor of education in which nothing is really learned but wages are higher because a highly ambitious group is pre-selected for employers. The “Harvard Law” metaphor is that in which wages are higher because real, privately valuable, skills are really learned, but these skills are of dubious social product.

Lant Pritchett, “Where has all the education gone?” World Bank, revised  21 December 1999, footnote 38, pp. 33-34.

Japan’s coming Greek crisis

Thursday, March 4th, 2010

Japan’s economy has been in recession since 1991. Government debt, even factoring in foreign exchange reserves, now exceeds 100% of Japan’s GDP. Moreover, the country in the near future faces labour shortages because of low birth rates and resistance to foreign immigration. Harvard economist Ken Rogoff, surveying this scene, finds everything in place for a fiscal crisis of Greek proportions. Such dire predictions for Japan have proven wrong in the past, though. Could it be that ‘this time is different’.

Although hardly in crisis (yet), Japan’s fiscal situation grows more alarming by the day. Until now, the government has been able to finance its vast debts locally, despite paying paltry interest rates even on longer-term borrowings. Remarkably, Japanese savers soak up some 95% of their government’s debt. Perhaps burned by the way stock prices and real estate collapsed when the 1980’s bubble burst, savers would rather go for what they view as safe bonds, especially as gently falling prices make the returns go farther than would be the case in a more normal inflation environment. ….

As the population ages and shrinks, more people will retire and start selling those government bonds that they are now lapping up. At some point, Japan will face its own Greek tragedy as the market charges sharply higher interest rates.

The government will be forced to consider raising revenues sharply. The best guess is that Japan will raise its value-added tax, now only 5%, far below European levels. But is it plausible to raise taxes in the face of such sustained low growth?

Investors who have bet against Japan in the past have been badly burned, grossly underestimating the Japanese people’s remarkable flexibility and resilience. But the fiscal road ahead looks increasingly perilous, with political consensus fraying badly in recent years.

Kenneth Rogoff, “Japan’s Slow-Motion Crisis”, Project Syndicate, 2 March 2010.

Kenneth Rogoff (1953-) is a former chief economist of the IMF. He is co-author (with Carmen Reinhart) of This Time is Different: Eight Centuries of Financial Folly (Princeton University Press, 2009).

H/T to Catherine Rampell at Economix.

the population delusion

Thursday, October 1st, 2009

New Scientist editor Alison George ponders whether the so-called problem of population growth might be a delusion.

There are nearly 7 billion humans alive today, twice as many as there were in 1965, with 75 million more being added each year. UN predictions say there could be an extra 2 to 4 billion of us by 2050. The planet has never experienced anything like it.

Can the world sustain this growing horde? It’s a contentious question. While it is clear that the population cannot go on increasing forever, history is littered with dire but failed predictions of famine and death resulting from over-population. Most famously, Thomas Malthus warned more than two centuries ago that population would be held in check by rising mortality. What he failed to anticipate was the ability of newly industrialised societies to support large numbers of people.

Alison George, “The population delusion”, New Scientist, Issue 2727 (26 September 2009), pp. 34-35.

Alison George asked leading scholars to express their views in three short articles and one interview. On the heels of biologists Paul and Anne Ehrlich – well-known for their fear of population growth – Jesse Ausubel responds to questions of Ms George and comes across as an extreme optimist.

I regard myself as neither an optimist nor a pessimist. But I do think that humanity is ingenious and enterprising. Throughout the ages people have doubted that their descendants could exist, with improving health and longevity, in the numbers and densities we do now. In the 19th century it was common to reason that horse manure or chimney smoke would bury or choke cities. Yet air quality in New York City and water quality in New York harbour are better than when I or my mother was a child. Over time people find, invent and spread solutions for many environmental problems.

[snip]

You could say that fear-inducing articles like Hardin’s [1968 Science article “The tragedy of the commons”] are social equivalents of quorum sensing factors [of bacteria amd insects], and we have responded to the signals. Farmers have lifted yields to produce more crops without using more land. Engineers have improved the efficiency of power turbines so that the primary energy needed to serve today’s population is much less than if we were still using the engines of Malthus’s era or those of 1968. In general, humans are involved in “resource sparing” – the increasingly efficient use of land, energy, water and other materials that allows humanity to grow in numbers, lifespan or level of consumption while stopping the burden on nature from becoming too disastrous.

Jesse Ausubel, “Population: Technology will save us”, New Scientist, Issue 2727 (26 September 2009), pp. 38-39.

Environmental scientist Jesse Ausubel is director of the Program for the Human Environment at The Rockefeller University, New York City. Mr Ausubel helped organise the first UN World Climate Conference, held in Geneva in 1979. From 1979 to 1981 he led the Climate Task Force of the Resources and Environment Program at the International Institute for Applied Systems Analysis, coincidentally the current home of Thought du Jour.

Africa’s demographic transition

Friday, August 28th, 2009

Africa is still something of a demographic outlier compared with the rest of the developing world. Long berated (or loved) as the sleepiest continent, it has now become the fastest-growing and fastest-urbanising one. Its population has grown from 110m in 1850 to 1 billion today. Its fertility rate is still high: the average woman born today can expect to have five children in her child-bearing years, compared with just 1.7 in East Asia. Barring catastrophe, Africa’s population will reach 2 billion by 2050. To get a sense of this kind of increase, consider that in 1950 there were two Europeans for every African; by 2050, on present trends, there will be two Africans for every European.

Yet Africa is also starting out, a little late, on a demographic transition that others have already traced: as people get richer, they have fewer children. In 1990 the continent’s total fertility rate was over six, compared with two in East Asia. By 2030, according to United Nations projections, the total fertility rate in sub-Saharan Africa could fall to three. By 2050 it could be below 2.5…..

Africa does not have much time to get things right. The period of greatest potential, when the working-age population is disproportionately large, is not open-ended. In demographic terms, it is just a moment or two. Societies age, and as they do the number of older dependents grows and the moment passes.

Africa’s population: The baby bonanza“, The Economist, 29 August 2009.

The demographic transition to lower fertility can yield what is known as a “demographic dividend”. This brief essay explores its potential in Africa. “On some calculations, demography accounted for about a third of East Asia’s phenomenal growth over the past 30 years.” But a high working-age share is no guarantee that a population will reap the potential demographic dividend. Demography is not destiny. Poverty, hunger, disease and civil war makes it difficult if not impossible for Africa to take full advantage of its demographic transition. Urban unemployment and underemployment produces crime and violence, not economic growth.

This essay is a quick but rewarding read, with clear and helpful charts.