Population Growth

Is Population Growth Too Slow?

Martin Wolf (2001), "Age Shall Not Weary Them," Financial Times, February 7, discusses the so-called "old-age crisis," and concludes that there is no crisis. He writes, "The worry about aging is, in short, much ado about rather little....All it will take is a little imagination and courage for most of today's rich countries to enjoy their escape from the age-old tyranny of early death." What kind of imagination and courage does Wolf have in mind?

     First of all, Wolf uses OECD data to show that the increased fiscal burden of old-age pensions, that is taxes as a percent of GDP, will not rise nearly as much as people seem to think. In the European Union, an area where population growth has slowed drastically, pension taxes need only rise from about 10 percent today to 13 percent by 2050. If that is worrisome, Wolf mentions that an increase in labor force participation in Europe to American levels, 60 percent to 75 percent, the dependency ratio would rise very little. And if the retirement age were also raised just a couple of years, the dependency ratio would not change at all! Interestingly, if the retirement age were raised from 65 to 70, which, by the way, would actually leave people with two to three times as many years of retirement than the retirement age of 65 gave people in 1960, the dependency ratio would actually fall from 0.7 retirees per worker today to 0.4 retirees per worker. That is, the retirement burden on workers could easily be reduced if we had the courage to recognize that we live longer and could easily work a few years longer. Finally, Wolf mentions that an increase in the rate of economic growth could also reduce the retirement burden, and such faster growth should be possible throughout Europe if the region would match the 		U.S. productivity performance of the 1990s.

     Martin Wolf makes the interesting point that while we laugh at Thomas Malthus for suggesting in 1800 that people were doomed to eternal poverty because population growth would be too fast relative to output growth, we now seriously fret that population growth has slowed too much for us to handle the cost of supporting the growing ranks of retired workers. Writes Wolf: "Happily, these anti-Malthusians are likely to be proved quite as wrong as Malthus himself." A lot of imagination and innovation created the technological progress to overcome Malthus' dismal outcome; Wolf suggests that it will take only a little imagination and courage to deal with the slowdown in population growth.

Chinese Birth Control: An Update

In the Case Study 7-2 we discuss forced birth control in China, and we concluded with some evidence that the policies were undergoing some change. Leslie Chang (2001), "China Tries Easing Once-Brutal Approach to Family Planning," The Wall Street Journal, February 2, p. A1, describes how the rapid slowing of Chinese population growth may be leading the "womb police" to ease their repression of would-be parents. (Or, perhaps, it has been the economic growth and pressure for political and social freedoms that has caused the government to rethink its drastic population policies.)

     Under the old "one-child" policies, women had to apply for a birth permit in order to have a child, and then mothers were immediately fitted with IUDs to prevent further births. "If I had a second child, they would tear down the house of my husband's
brothers, or my father's house, whoever had money," one Chinese woman is quoted as saying. However, now a birth permit is no longer required in many parts of China (local officials have some leeway to set local policies), and women get a choice of birth control methods. Some Chinese scholars point to an experiment that has been carried out in Yicheng country since 1985, which was to let couples in this remote area have two children instead of just one, provided they space the children out by at least 5 years. Writes Leslie Chang:

     "The results were striking. Yicheng in 1998 averaged 14 births per thousand people, lower than the national average of 17 births per thousand people. The ratio of boys to girls, which is about 114 to 100 nationwide because of selective abortion of female fetuses, is 107 to 100, near the biological norm."

A domestic demography journal agreed that such a two-child policy should be extended to all of China's farm villages; the journal article was entitled "The Dawn of a Perfect Family Planning Policy."

     You may still question why any type of coercion is necessary at all when it comes to choosing family size, and you may also wonder how much of a change in policy the two-child policy and the choice of contraceptives really is. Chinese population policies from the late 1970s "when village mothers were herded into a yard...to be forcibly sterilized" do not provide a useful standard by which to judge current programs. It will be interesting to observe how population policies change as China continues to grow and develop.