Fertility Trends, Inequality, and Economic Growth Doodles

Scoping out long-term relationships between fertility and other variables, I’ve done some reading and made some figures to look at. More on the reading another day. Here are some figures, all using data from World Bank World Development Indicators. (Sidenote: I wouldn’t have to make these figures if the people doing slower, more serious research took the time to also publish simple descriptive figures and tables on these relationships. Read more about how important this is in my blockbuster book, Citizen Scholar: Public Engagement for Social Scientists.)

Question one: Inequality and fertility

One question was whether inequality might reduce fertility because it increases the pressure to raise successful children, which is more feasible if you have fewer of them. You have to believe me I thought this pattern would emerge in rich countries.

1. Since 1980 overall, fertility and income inequality have been positively correlated. The relationship is weakest in rich countries.

2. Looking more closely at just the rich countries, you can maybe see the negative relationship emerging. You just have to isolate the USA and Israel, which are high-inequality, high fertility outliers.

3. If you zoom in on the period 2010-2023, again just the richest countries excluding USA and Israel, with country codes as symbols, you can get some ideas about how this works. Korea, Spain, and Italy are high-inequality / low fertility; Norway and Slovenia are holding up the left side; France, Great Britain and Austria are not cooperating with the trend (does immigration play a role here?).

Question two: Population growth and economic growth

We turn economic size or growth into a standard of living indicator by converting it to per capita metrics. The traditional challenge is to grow the total economy more than the population grows, so that per capita income increases. Output per capita (or worker, or work-hour) is how that is often expressed, with the term productivity. Technology, capital investment, and energy consumption are key factors, as a worker who creates tons of grain by pressing a button creates more value per hour than one who wields a hoe. This kind of question has consumed, so to speak, social science analysis for ages, with modern antecedents dating to Adam Smith and Malthus.

Anyway, what happens when population growth slows or even reverses? For elites in poor countries — especially the Chinese communists, but also India and pretty much everywhere else — reducing population growth looked like the best way to increase per capita income. In particular, today’s rich and middle-income countries all experienced a “demographic dividend,” when for a couple of generations declining birth rates lead to relatively few children and lots of working-age adults — so more output per capita. Now pronatalists are very worried we’ve gone too far. The demographic dividend is turning into a retirement albatross and we won’t have enough workers per retiree. (The policy experiment I would pay to see involves massive wealth redistribution to test whether that’s enough to take care of the old people.)

Anyway, growing population is a challenge for increasing per capita income, because you’re increasing the denominator. There are lots of ways to specify these relationships, and as far as I can tell little consensus on the overall pattern of relationships beyond the simplest (and, again, not enough real experts do persuasive descriptive work on this). So this is nothing like definitive, just doodles.

1. The overall relationship just showing faster population growth in poor countries, by decade:

2. At the country level, there are lots of outliers and small countries with huge changes in population, so there is some wrangling that I haven’t done. But it helps if you take the 10-year population growth and use it to predict this year’s economic growth, giving you a little more stability and also a causal lag. This is to think about the question: is population growth good for raising living standards? Here is that relationship by decade. Maybe higher 10-year population growth is associated with less 1-year economic growth.

3. Just among rich countries maybe the relationship is stronger, though not in the 1970s or 2020s.

A specific concern of pronatalists is that very low fertility rates will lead to economic stagnation. This is really a long-term proposition, having to do with population aging causing an economic drag, so we wouldn’t expect to see it much yet in most places. But there is also an argument that low birth rates sap the vitality of societies more immediately. Here’s a look at a few countries with very low fertility in Asia (China, Japan, S. Korea) and Europe (Italy, Spain), and Chile. It looks like Chile, Japan, S. Korea, and to a lesser extent China in the last decade, show the pattern of long-term population growth slowdown associated with lower increases in standard of living. Italy and Spain had some better economic years after the pandemic which came after population bounces in the 2000s.

Anyways, some doodles and food for thought. Happy to have your reading recommendations. I put the messy Stata data and code files in this folder if any of it looks useful to you.

—

Previously Published on familyinequality with Creative Commons License

***

Join The Good Men Project as a Premium Member today.

All Premium Members get to view The Good Men Project with NO ADS.  A complete list of benefits is here.

—

Photo credit: unsplash

The post Fertility Trends, Inequality, and Economic Growth Doodles appeared first on The Good Men Project.

View the full article