Continuation of the Economist article on falling Fertility rates

The link between wealth and fertility does not explain everything. In some countries, poor women have the same number of children as rich ones. This suggests that other factors are at work. The most obvious is that many people in poor countries want fewer children, and family planning helps them get their wish.

A surprising amount is known about how many children parents want, thanks to a series of surveys by the Demographic and Health Surveys programme. The picture it paints is of huge numbers of unplanned pregnancies. In Brazil, for example, the wanted fertility rate in 1996 (the most recent year available) was 1.8; the actual fertility rate then was 2.5. In India the wanted rate in 2006 was 1.9, the actual one, 2.7. In Ghana the figures for 2003 were 3.7 and 4.4. The rule seems to be that women want one child fewer than they are having (except in some rich countries, where they say they want more).

One study in 2002 estimated that as many as a quarter of all pregnancies in developing countries in the 1990s were unintended. Yet another found that more African women say they want to use contraceptives but cannot get them (25m) than actually use them (18m). Unmet demand in turn implies that fertility in some countries could be even lower than it actually is if more family planning were available. The proportion of women using contraception in Latin America and East Asia is four times the African rate.

That points to another big reason why fertility is falling: the spread of female education. Go back to the countries where fertility has fallen fastest and you will find remarkable literacy programmes. As early as 1962, for example, 80% of young women in Mauritius could read and write. In Iran in 1976, only 10% of rural women aged 20 to 24 were literate. Now that share is 91%, and Iran not only has one of the best-educated populations in the Middle East but the one in which men and women have the most equal educational chances. Iranian girls aged 15-19 have roughly the same number of years of schooling as boys do. Educated women are more likely to go out to work, more likely to demand contraception and less likely to want large families.

Lastly, a special case: China’s one-child policy, which began nationwide in the early 1970s. China’s population is probably 300m-400m lower now than it would have been without it. The policy (which is one of population control, not birth control) has had dreadful costs, including widespread female infanticide, a lopsided sex ratio and horrors such as mass sterilisation and forced abortions. But in its own terms, it has worked—20m people enter the workforce each year, instead of 40m—and, to the extent that China is polluting less than it would have done, it has benefited the rest of the world.

The Goldilocks moment

Higher standards of living, then, reduce fertility. And lower fertility improves living standards. This is what China’s government says. It is also the view that has emerged from demographic research over the past 20 years.* In the 1980s, population was regarded as relatively unimportant to economic performance. American delegates told a UN conference in 1984 that “population growth is, in and of itself, neither good nor bad; it is a neutral phenomenon.” Recent research suggests otherwise.

Cutting the fertility rate from six to two can help an economy in several ways. First, as fertility falls it changes the structure of the population, increasing the size of the workforce relative to the numbers of children and old people. When fertility is high and a country is young (median age below 20), there are huge numbers of children and the overall dependency ratio is high. When a country is ageing (median age above 40), it again has a high dependency ratio, this time because of old people.

But the switch from one to the other produces a Goldilocks generation. Because fertility is falling, there are relatively few children. Because of high mortality earlier, there are relatively few grandparents. Instead, countries have a bulge of working-age adults. This happened to Europe after the baby boom of 1945-65 and produced les trente glorieuses (30 years of growth). It is happening now in Asia and Latin America. East Asia has done better than Latin America, showing that lower fertility alone does not determine economic success. Eventually developing countries will face the same problems of ageing as Europe and Japan do. But for the moment, Asians and Latinos are enjoying fertility that is neither too hot, nor too cold. According to David Bloom of the Harvard School of Public Health, the “demographic dividend” (his term) accounted for a third of East Asian growth in 1965-90.

Slowing fertility has other benefits. By making it easier for women to work, it boosts the size of the labour force. Because there are fewer dependent children and old people, households have more money left for savings, which can be ploughed into investment. Chinese household savings (obviously influenced by many things, not just demography) reached almost 25% of GDP in 2008, helping to finance investment of an unprecedented 40% of GDP. This in turn accounted for practically all the increase in Chinese GDP in the first half of this year.

Lastly, low fertility makes possible a more rapid accumulation of capital per head. To see how, think about what happens to a farm as it is handed down the generations in a country without primogeniture. The more children there are, the more the farm is divided. Eventually, these patches become so tiny they cease to be efficient. This is occurring in Bangladesh.

The importance of tackling such problems, which go by the ugly name of “capital shallowing”, was discounted in the 1980s but has recently made a comeback. Hu Angang of Tsinghua University estimates that half of Chinese growth per person in 1978-98 can be attributed to the increase in capital stock per head.

This link between growth and fertility raises awkward questions. In the 1980s the link was downplayed in reaction to Malthusian alarms of the 1970s, when it was fashionable to argue that population growth had to be reined in because oil and natural resources were running short. So if population does matter after all, does that mean the Malthusians were right?

Not entirely. Neo-Malthusians think the world has too many people. But for most countries, the population questions that matter most are either: do we have enough people to support an ageing society? Or: how can we take advantage of having just the right number for economic growth? It is fair to say that these perceptions are not mutually exclusive. The world might indeed have the right numbers to boost growth and still have too many for the environment. The right response to that, though, would be to curb pollution and try to alter the pattern of growth to make it less resource-intensive, rather than to control population directly.

The reason is that widening replacement-level fertility means population growth is slowing down anyway. A further reduction of fertility would be possible if family planning were spread to the parts of the world which do not yet have it (notably Africa). But that would only reduce the growth in the world’s numbers from 9.2 billion in 2050 to, say, 8.5 billion. To go further would probably require draconian measures, such as sterilisation or one-child policies.

The bad news is that the girls who will give birth to the coming, larger generations have already been born. The good news is that they will want far fewer children than their mothers or grandmothers did.

Go forth and multiply a lot less

Oct 29th 2009

From The Economist print edition