The economic way to reverse demographic decline – Asia Times

This is the first of a two-part writing.

In an April article published by Asia Times about real or impending fertility reduction to below population-replacing degrees in nearly all countries outside sub-Saharan Africa, I observed:

No one has demonstrated how to boost birth rates in the US or suggest to other countries how to do so without more state coercion than Americans would bear at home. Although some countries have pursued different pro-natalist guidelines during the past half-century, nothing has succeeded in raising birth rates significantly.

This essay aims to change that, starting with East Asia, where philosophical barriers to advancing successful pro-natalist plan are weaker than those in the West, and where any effective pro-natalist policy properly take root.

Monetary inducements for families to have children had, in order to meet regular performance criteria in spending public funds, promote child-raising in a way that captures the benefits of labour specialization, including economies of scale, that today facilitate almost all job except child-raising.

No pro-natalist policy has attempted to recreate the significant advantages of labor specialization in child-rearing, including economies of scale, that were once seized by families where the wife bore and raised as many as a hundred children up until now.

Those rewards are not captured by people that elevate only one or two kids and in which both parents work outside the house most of their adult life. &nbsp,

For child-raising is the last significant non-specialized work in our earth, and feels as anomalously hard as growing person’s own meals or making one’s personal clothes. This may be a factor in the growing indifference of several kids to raising a second baby.

To get cost-effective, pro-natalist plan must quit trying to stimulate all families to raise two children rather than only one child. By funding a smaller number of specialized child-raising communities that raise some children, it may produce the desired number of additional kids. &nbsp,

The following essay in this series will discuss the administrative arrangements that may best facilitate this and provide an overview of how much of the workforce and GDP may be required.

Urgent East Asian difficulty

No one can be held responsible for wishing there were fewer people on earth. &nbsp, The largest human population that could effectively live on Earth so well as the inhabitants of rich countries today live might well be a tiny minority of the ten billion people then expected to live our planet at top global population somewhere between 2080 and 2100.

No country would need a pro-natalist policy until the global population had fallen to its desired level, whatever that might be, if all countries and cultures were reducing their populations at the same rate, if that rate appeared slow enough to not have had grave adverse economic effects, and if no country attempted to increase its population in comparison to other nations.

Regrettably, that is not what is happening. Although declining, the total fertility rate ( TFR ) of Africa ( 4.2 live births per woman per lifetime ) is still much higher than the population-replacement rate, which is 2.1 % per woman per lifetime. Meanwhile, Europe’s ( 1.5 ), the Americas ‘ ( 1.8 ) and Asia’s ( 1.9 ) TFRs are now below replacement, while Oceania’s ( 2.1 ) is at replacement. &nbsp,

The regions of our world with the highest TFRs are its poorest and least educated regions: central Africa ( 5.6), western Africa ( 4.9 ) and eastern Africa ( 4.2 ). Eastern Asia ( 1. 2 ), southern Europe ( 1. 3 ), and eastern Europe ( 1. 4), are well-educated and far wealthier than those with the lowest TFRs ( 1. 4). &nbsp,

Nigeria currently has more than 80 % of the number of live births in Nigeria annually, which will soon surpass that number. &nbsp,

Sub-Saharan Africans are projected to account for a growing portion of the world’s population by the year 2100, making Europeans, East Asians, and Indians, including Americans of European, East Asian, and Indian descent, to become a small, shrinking minority. &nbsp, &nbsp, &nbsp, &nbsp, &nbsp,

The Japanese, South Koreans, or Chinese cannot be faulted for wanting to reduce the number of people in their countries because they can no longer be blamed for their desire to have fewer people. &nbsp,

Population reduction may, however, be done more slowly than it will be if the current TFRs are maintained because of both global and domestic considerations. &nbsp,

A TFR of 1.8 reduces the birth cohort by 15 % per generation and by about 40 % in a century, with an average childbearing age of 30 years and, consequently, about 3.3 generations per century. With a lag of no more than one lifetime, it does the same to population, absent migration or changes in mortality or childbearing age. &nbsp,

Two centuries of a TFR of 1.8 would reduce the population by about 65 %. A TFR that is three centuries old would reduce the population by about 80 %, but without significant economic strain.

By contrast, a TFR of 1.05– roughly what China’s TFR is now widely thought to be – reduces the birth cohort by half every generation and by about 90 % in a century, and, with a lag of no more than one lifetime, does the same to population, absent migration or changes in mortality or childbearing age. &nbsp,

South Korea’s 2023 TFR of 0.7, if sustained, would reduce the birth cohort by two-thirds every generation and by about 97 % in a century, and, with a lag of no more than one lifetime, would do the same to South Korea’s population, absent migration or changes in mortality or childbearing age.

It is pure fantasy to imagine that China or South Korea could significantly reduce this demographic contraction by bringing in immigrants without becoming primarily non-Chinese or non-Korean within a lifetime. &nbsp,

It seems no less unlikely that either nation could accomplish this peacefully and productively. That seems especially true for China because sub-Saharan Africa will soon be the only source of so many willing immigrants as China would need to offset any large proportion of the decline in its workforce. &nbsp,

Furthermore, fertility in most of East Asia is so far below replacement that, if sustained, its economic consequences, including population aging, may be disastrous. &nbsp,

In South Korea, the old-age dependency ratio – the ratio of population at least 65 years old to population aged 20–64 years– is expected to rise from about 24 % now to about 90 % in 2060. China’s prospects are only marginally less promising.

Many East Asians are now keenly aware of the nature and urgency of their demographic predicament, although they tend to be too polite to describe it in print so bluntly as I have. &nbsp,

However, they seem to be unable to devise any effective way of reversing their far-advanced fertility decline. They might find it beneficial to read back to the first chapter of the still popular book on economics.

In Adam Smith’s” Inquiry into the Nature and Causes of the Wealth of Nations”, published at London in 1776, the first chapter, titled” Of the Division of Labour”, famously describes, in its third paragraph, a pin factory in which specialization of labor among ten workers, each doing a distinct phase of manufacturing every pin, enabled those ten workers to make at least 240 times as many pins every day as they could have made if each worker did every phase of making a pin.

In its fourth paragraph, the chapter makes the observation that trade enables division of labor to occur between various firms or locations, with one or more of the multiple distinct stages of producing a good in each of the various locations or by various firms. &nbsp,

This labor specialty, which was promoted by both trade and” the invention of a great number of machines that facilitate and constrict labor,” had grown in recent centuries and had become, according to Smith, the main driver of the wealth of the wealthier nations.

Smith’s argument was compelling and insightful, not least in implying that increasing economies of scale pervade any wealthy country’s economy – that at least below some average-cost-minimizing scale of production (or, in cases of natural monopoly, across the whole range of scales of production ), workers producing a good can produce it more cheaply by cooperating to produce it in greater quantity, regardless of whether those workers cooperate within a single firm or by trade among multiple firms.

However, Smith did not discuss child rearing as an example of specialized labor with economies of scale, perhaps in part because it had been done so for a long time in all countries, and this did not help to explain why some European countries had recently become wealthier than any other countries had ever been. &nbsp,

Smith appears to have never considered that any industry would no longer be distinguished by labor specialization and the associated scale. &nbsp,

In particular, he did not take into account what might happen if women decided to stop putting their labor into raising children, whose products could not be owned or sold, or to work in other industries, whose products could be owned and sold, and which labor specialization using labor-saving inventions was making more lucrative than child-raising. &nbsp,

In those lifetimes, we have also failed to appreciate it in those terms.

Child-raising as non-specialized labor

Diverse changes over the past century and a half have long been recognized as having a beneficial impact on fertility. &nbsp, For example: &nbsp,

  • Women have the freedom to choose which reproductive methods to use when there are less children and the legalization of their use. &nbsp, Improved medical technologies that have reduced child mortality have made it unnecessary for women to bear four or five children in order to replace the population, an average of 2.1 live births per woman per lifetime now suffices to do that. Together, these developments increased women’s incomes while enabling them to persuade men to allow them to spend much of their adult lives working outside the home, leading to a loss of family income if a wife stays at home to raise children.
  • State-mandated old-age pensions to which all workers must contribute and which all retired workers receive have replaced our own children as our old-age support. Additionally, neither the amount nor the duration of one’s annual contribution or pension are affected by the number of children they have raised. &nbsp, This has eliminated the previously compelling economic incentive to raise children.
  • We are becoming less and less religious, and fertility is now firmly linked to religiosity, at least in the West. &nbsp, It correlates most strongly with the most demanding religiosities. According to current trends, the US would be populated primarily by orthodox Jews, Muslims, Mormons, Amish, and Mennonites in the absence of any immigration or emigration in the next two centuries.

However, one important fertility-reducing change has been largely overlooked: &nbsp, in rich countries, child-raising has, in recent decades, become the last non-specialized work to which many people ever devote a large proportion of their waking hours.

Most people still do so even in wealthy nations in 1776, as most people once did now:” Spin our own thread, weave our own cloth, sew our own clothes, grow our own food, draw our own water, gather or cut our own cooking and heating fuel, or make our own soap and nightlights.” &nbsp,

We are no longer even able to prepare our own food thanks to the development of pre-cooked frozen meals, microwave ovens, and home delivery services.

Mechanical inventions have made the still largely non-specialized work of clothes-laundering, dish-washing, house-cleaning and even groundskeeping light work that requires relatively little time. &nbsp,

Having no physical work to do, vast numbers of us, in order to exercise, patronize commercial gyms – institutions that were scarce in the US until the 1980s.

Even though few of us are experts in child-rearing and never work outside the home, we still bear and raise our own children. Moreover, this non-specialized child-raising takes more time, during the years when it is done, than does all other work in the home.

Child-raising seems unusually difficult because it is now the only non-specialist activity that any of us ever engages in. Growing your own food and making your own clothing would feel different if you had to go back to it. &nbsp,

However, it presumably seemed less difficult for our female forebears, who were not only skilled in raising children but also engaged in a lot of different types of physically demanding non-specialized labor.

This is arguably an important but underappreciated cause of recent fertility decline. Parents who learn from one child how difficult it is to raise another child in contrast to more specialized and mechanized types of work are increasingly choosing not to do the same. &nbsp,

Parental scale savings

Of the many governments of countries with below-replacement fertility– including all rich countries except Israel and Saudi Arabia– none has ever publicly set a national fertility rate target and committed itself to raise the number of live births to achieve that target rate within a specific time by whatever economic incentives may prove least costly and are consistent with providing the additional children with upbringings not inferior on average to those of other children.

Politicians in nations with formally democratic governments have been unable to advocate for doing that, to publicly state the glaringly obvious truth that a 21st-century state needs an effective population policy.

However, this silence and inaction may be due in part to the absence of any plausible proposal for reversing fertility decline in the least coercive way, i. e., by monetary incentives. No one has yet had the guts to advocate more forceful methods of making people bear and raise children, despite the evidence that various countries ‘ financial incentives have shown to have little or no effect in halting fertility decline. &nbsp,

The best place to start when developing effective, minimally coercive pro-natalist policy, i .e., one that can and will use monetary incentives to increase a nation’s annual live births to the level deemed socially optimal in light of the costs of increasing live births and providing the additional children with average higher than other children’s upbringings, is that any such policy, like any expenditure of public funds, must be designed to achieve its objectives efficiently and with the least amount of public funds.

This implies that pro-natalist policy must strive to capture any benefits of labor specialization and any economies of scale in child-raising that can be captured without making the upbringings of children born and raised in consequence of that policy inferior, on average, to those of other children.

There are substantial economies of scale and other benefits of labor specialization in child-raising – benefits that no state pro-natalist policy has even attempted to capture. For a variety of reasons, two parents can raise ten to twelve children for significantly less than they can raise one or two. &nbsp,

Preparing food for ten children and cleaning up after ten children take significantly less time and effort per child than it does for two children and cleaning up after them. &nbsp,

There are bedrooms for young children. Ten children need less than five times as much study and play space as two children need. Ten kids can travel in a van for far less than five times as much as a car to transport two kids. &nbsp,

Ten children can play a single piano at various times. The minds of ten children can be trained by a single Bach recording, by the same copy of Herodotus’s” History or of The Romance of the Three Kingdoms”, or by a single go or chess board and set of stones or pieces.

If the children are of different ages, the clothing, toys, tools, and other items that were first used by one child may be used by younger children as well. In addition, the older children can help care for and teach the younger children, thereby learning parenting skills – as older siblings routinely did before families shrank to one or two children.

Additionally, practice makes perfect in everything else, just like in child-raising. The more children one raises, the better one becomes at child-raising, both by doing it and by learning from others who do it. &nbsp,

Furthermore, people who enjoy raising children and would like to do so full-time, as a specialized career, will tend to be better at it and require less compensation to do it than other people would.

Former US diplomat” Ichabod” is a former US diplomat.