Latest news with #JesúsFernández-Villaverde
The Hill
11 hours ago
- Business
- The Hill
No, prosperity doesn't cause population collapse
For years, it was treated as a demographic law: as countries grow wealthier, they have fewer children. Prosperity, it was believed, inevitably drove birth rates down. This assumption shaped countless forecasts about the future of the global population. And in many wealthy countries, such as South Korea and Italy, very low fertility rates persist. But a growing body of research is challenging the idea that rising prosperity always suppresses fertility. University of Pennsylvania economist Jesús Fernández-Villaverde recently observed that middle-income countries are now experiencing lower total fertility rates than many advanced economies ever have. His latest work shows that Thailand and Colombia each have fertility rates around 1.0 births per woman, which is even lower than rates in well-known low-fertility advanced economies such as Japan, Spain and Italy. 'My conjecture is that by 2060 or so, we might see rich economies as a group with higher [total fertility rates] than emerging economies,' Fernández-Villaverde predicts. This changing relationship between prosperity and fertility is already apparent in Europe. For many years, wealthier European countries tended to have lower birth rates than poorer ones. That pattern weakened around 2017, and by 2021 it had flipped. This change fits a broader historical pattern. Before the Industrial Revolution, wealthier families generally had more children. The idea that prosperity leads to smaller families is a modern development. Now, in many advanced economies, that trend is weakening or reversing. The way that prosperity influences fertility is changing yet again. Wealth and family size are no longer pulling in opposite directions. This shift also calls into question long-standing assumptions about women's income and fertility. For years, many economists thought that higher salaries discouraged women from having children by raising the opportunity cost of taking time off work. That no longer seems to hold in many countries. In several high-income nations, rising female earnings are now associated with higher fertility. Studies in Italy and the Netherlands show that couples where both partners earn well are more likely to have children, while low-income couples are the least likely to do so. Similar findings have emerged from Sweden as well. In Norway, too, higher-earning women now tend to have more babies. This trend is not limited to Europe. In the United States, richer families are also beginning to have more babies than poorer ones, reversing patterns observed in previous decades. A study of seven countries — including the United States, the United Kingdom, Germany and Australia — found that in every case, higher incomes for both men and women increased the chances of having a child. This growing body of evidence challenges the assumption that prosperity causes people to have fewer children. Still, birth rates are falling across much of the world, with many countries now below replacement level. While this trend raises serious concerns, such as the risk of an aging and less innovative population and widening gaps in public pension solvency, it is heartening that it is not driven by prosperity itself. Wealth does not automatically lead to fewer children, and theories blaming consumerism or rising living standards no longer hold up. Although the recent shift in the relationship between prosperity and fertility is welcome, it is not yet enough to raise fertility to the replacement rate of around 2.1 children per woman — a challenging threshold to reach. But the growing number of policymakers around the world concerned about falling fertility can consider many simple, freedom-enhancing reforms that lower barriers to raising a family, including reforms to education, housing and childcare. Still, it's important to challenge the common assumption that prosperity inevitably leads to lower birth rates: Wealth does not always mean fewer children. Chelsea Follett is managing editor of a project of the Cato Institute, and a policy analyst in Cato's Center for Global Liberty & Prosperity.
Yahoo
04-03-2025
- Business
- Yahoo
‘Marry or be fired' and other global efforts to boost fertility
As marriage and fertility in China continue to decline, some employers tried taking a hardline approach with workers who are single. They were told to get married or lose their job. The memo was later withdrawn, 'revoking and abolishing the provisions proposed in the notice.' But it shows the concern of shrinking populations and lack of family formation at a time when many countries, including the United States, have lower birth rates and are concerned about fertility. The New York Times reported that one company, Shandong Suning Chemical Group, told its unmarried workers they have until Sept. 30 to wed if they want to continue to work there. 'If you cannot get married and start a family within three quarters, the company will terminate your labor contract,' per the memo that spread on social media after it was sent to workers ages 28 to 58. Those receiving it included workers who were divorced. Marriage in China fell 20% last year compared to 2023, according to the Times, 'the fewest since the government began releasing statistics in 1986. China's population has fallen for three straight years." The notice, translated into English, reads in part: 'Not responding to the call of the country and not getting married and having children is disloyalty; not listening to the words of parents and making the elderly worry is unfilial; not being able to get along with a partner after several attempts is unkindness; not listening to the advice of comrades and making workers worry is unrighteousness.' The notice, which also called out a specific worker in a troubled marriage, apparently violated 'provisions of the Labor Law and the Labor Contract Law.' Yinan County Human Resources and the Social Security Bureau said it would track whether personnel are dismissed and 'the Labor Supervision Brigade will handle it according to law.' The Times reported that the Chinese government has embraced some tactics that encourage marriage and starting a family. It cites, for instance, the supermarket chain Pangdonglai, whose founder said he would forbid 'bride prices,' which is basically a dowry payment to the family of the future bride. 'Critics of the practice, including the government, have argued that it makes marriage unaffordable for many men.' He also said that the guest list for weddings would have to be pared to a certain length so that couples could afford the wedding. A district in China is reportedly considering issuing guidance on a 'three-child' policy, which is certainly different from the one-child policy that held for many years throughout China and apparently contributed to the population woes. China's far from alone in worrying about falling birth rates. Around 2055, a first is expected to take place: 'The world population will peak and then start declining and it's likely to happen at a rapid rate,' according to Deseret News coverage of a talk on fertility by Jesús Fernández-Villaverde, an economist and professor at the University of Pennsylvania, who was addressing a Harvard University audience. 'You're going to be the first generation in human history that is going to see the population of the planet fall in a systematic way,' Fernández-Villaverde said. Both developed and developing countries are part of the trend of record-low total fertility rates. The replacement rate where the population basically stays level is 2.1 births per woman over her lifetime. Some countries are far below that, including South Korea, Taiwan and Japan, where the average is less than 1.5 children per woman. As Deseret News separately reported, 'U.S. women are starting families later and having fewer children, some forgoing having kids entirely. Those are among the factors contributing to news that in 2023, the U.S. total fertility rate hit its lowest point, falling to a record 1.62 births per woman, well below the replacement rate of 2.1 births. According to a report from the National Center for Health Statistics within the Centers for Disease Control and Prevention, the 3.59 million births in 2023 in the U.S. was a 2% drop from the previous year and the lowest number since 1979. Two things can stabilize population size: more births than deaths and immigration. Fernández-Villaverde said the U.S. would need to have about 4 million immigrants a year to keep its population stable if the trend in declining births continues. Many demographers, government officials and others believe a shrinking population could crimp economic growth and usher in other problems. As Deseret News reported last year, 'Fertility is a roadmap to aspects of the future that have great bearing on most people's lives in one way or another, though they may not recognize it. Population change impacts schools, economies and social programs, experts say. It can impact whether you can cash out the equity in your house or how many holes the social safety net might have as you grow old.' There are also concerns that trends like delaying marriage may mean women ultimately do not have the number of children they'd like to have. According to Forbes, declining births 'drive major global shifts in power over coming decades. ... Many countries like China and Japan have been trying to encourage people to have more kids and a birth rate below the replacement rate signals major demographic shifts on the horizon. In particular, it portends sluggish growth, an aging population and an economy that one day may struggle to find enough workers to fill jobs and pay the taxes required to maintain the state and care for a large elderly population, whose health and other needs often require far more expenditure per capita than younger people." The Cato Institute produced a report for National Review, published in 2023, that outlined Congressional proposals to support families and make having children a bit easier. Lawmakers have pondered subsidies for families and children, in vitro fertilization coverage, subsidized child care and direct payments to children in the form of a child allowance, among other things. 'Unfortunately, outcomes of fertility initiatives abroad suggest that U.S. policy-makers are unlikely to meaningfully boost fertility through government programs or increased social spending. By 2015, more than 50 countries stated that their goal was to raise fertility. Yet there are no modern examples of a developed country raising fertility to replacement levels and sustaining it there.' The article cites Hungary, which has spent 5% of its GDP on boosting fertility, but won't reach replacement level by its goal of 2030. 'Notably, although Hungary's total fertility has grown in recent years, fertility in neighboring countries has grown similarly over time, without major interventions.' While the Cato piece is not particularly hopeful that fertility initiatives will make a huge difference, albeit at 'high fiscal cost,' the report says that 'several current policies make being a parent harder than it needs to be, which could depress fertility and are thus ripe for reform.' Among policy changes that could help, they cite remote or flexible-schedule work options, price reforms for family essentials like housing, food and child care and commonsense policies on childbirth choice and free-range parenting as 'regardless of their impact on fertility, reforms listed (that) would benefit families.' The declining global birth rate is nothing new, though some believe it has sped up. Countries with low levels of fertility have for many years made efforts through policy to boost the birth rate. In 2017, the United Nations reported that 28% of governments have adopted policies, including 66% of European countries, and 38% of Asian countries. They've tried a variety of measures, including baby bonuses, family allowances, maternal and paternal leave, tax incentives and flexible work schedules. In a report for IZA World of Labor in 2014, Elizabeth Brainerd of Brandeis University noted that 'government policies can have a modest effect on raising fertility,' but that the broader social changes that are lowering fertility have greater impact. 'These policies seem only modestly effective in countering the impacts of widespread social changes, including new work opportunities for women and stronger incentives to invest in education.'
