Monday, April 14, 2008

Towards Long Term Population Decline


David S. Reher
(Universidad Complutense de Madrid)

This is a shortened and revised version of the paper that was published originally as: Reher, David S. “Towards long-term population decline: a discussion of relevant issues,” European Journal of Population 23 (2007): 189-207. The present paper was deliverd as a keynote lecture at the Joint Eurostat – UNECE Work Session on Demographic Projections, Bucharest, 10-12October 2007.

1. Towards long-term population decline

There are indications that a large part of the world is about to commence a prolonged period of population decline. This will bring to a close three centuries of unfettered and extremely rapid population growth, itself a unique experience in human history. For a number of decades during the second half of the twentieth century, world population growth rates surpassed 1.75 percent per year, exceeding 2 percent between 1970 and 1975, and were considerably higher in many world regions. Not only is this period of growth ending, there are also real perspectives for prolonged population decline in many of the world’s regions during the twenty-first century. There can be little doubt that this process has started in Europe and in other developed nations. It may just be getting under way in many of the lesser developed countries of the world as well. Only in the least developed regions of the world is it still a matter of serious doubt, though there too population growth rates have declined substantially in recent years.

The mechanics of decline can be traced to a prolonged reduction in fertility nearly everywhere in the world. In many of the developed regions of the world, fertility began to fall over a century ago. Since then, this slide has been unchecked, with the brief interlude of the baby boom of the 1950s and 1960s. In other parts of the world, fertility decline started much later (1960s-1980s), though the pace of decline has been far faster than it was in the developed world. The result of this is that inter-regional disparities in fertility at the beginning of the twenty-first century are far smaller than they were only 50 years ago. In large parts of the world, below-replacement fertility has been common for some time now, and in others there is a good chance that fertility, at present just above replacement levels, may be headed in the same direction. This process will be stimulated by the a decline in the number of women of reproductive age, itself the resul of earlier declines in the number of births. The process of declining numbers of births began in Europe some decades ago, and is already under way in a number of developing countries.

The very idea of decline and of population shortage is largely foreign to our society, mostly because for several centuries there has been no experience of shrinking population at a societal level. Even in developed regions, where the process is well-advanced, the idea of population decline and its implications is having difficulty being assimilated by large sectors of society (Caldwell and Schindlmayr, 2003: 257). In most of the developing countries, the problems of population abundance continue to dominate scientific, social and political agendas. Despite these signs of incipient decline, world population is likely to continue increasing over the coming decades, reaching a total of perhaps 8-9 billion persons by 2050 (current levels are 6.4 billion). By mid-century, however, the structural changes discussed here will be well on their way to turning growth into decline for the entire world.

2. Population decline and the demographic transition

It is our contention here that the persistent extremely low fertility in developed countries cannot be satisfactorily attributed to economic stress, unemployment, public policies or lack thereof, or to passing trends such as the postponement of reproduction, though all may contribute. Extremely low fertility has been around for too long for it to portend anything other than major long-term social change. It gives every indication of having become a structural aspect of the developed world.

There is reason to believe that the low fertility in European populations is the outcome of the demographic transition that started well over a century ago. This hallmark event of human history unleashed powerful forces of social change, leading to modernization in many parts of the world. Much as the demographic transition theory argues, the transition itself may have been triggered or at least been accompanied by more general societal changes. The process itself of reproductive change, however, tended to generate social and economic synergies of its own. The links between the demographic transition and social change can be seen in age structures, migration patterns, the distribution of family labor, education and the quality of children, and adult health. All of these were powerful agents of change in themselves and have done much to accelerate patterns of economic growth and social and political modernization during the twentieth century in Europe, America and in areas of East Asia. In order to understand this process more thoroughly, it is helpful to look briefly at how the demographic transition contributed to social change generally, and especially to how it contributed to the transformation in the role of women in society. This is the key issue, one that is present in all historic demographic transitions and likely in the more recent ones as well.

Women were the central figures for the initial demographic transition in Europe. They were the ones who contributed most to reproductive outcomes and were likely also the ones initiating fertility control within marriage. They also held the key to the health improvements of their children, especially before the aftermath of World War II when medicine and public health assumed greater relative importance. The demographic transition was, in its very origins, a key event in the empowerment of women. It also initiated a series of social, political and cultural changes affecting their role that mark social change during the twentieth century. By implication, the demographic transition led to greater reproductive efficiency: reaching the desired family size took less time and less individual effort than ever before, though it may well have cost considerably more. Ronald Lee has estimated that women went from spending 70 percent of their adult lives bearing and rearing children before the demographic transition, to spending only about 14 percent of it in more recent times. It meant a massive liberation of women’s time, minimizing their ‘wasted investments’ on children who eventually died.

At first mortality declined faster than fertility and, despite diminishing numbers of children ever-born, completed family size tended to increase. Eventually, however, completed family size decreased; a process that implied important ideational changes because it meant that people –omen- were aiming at –nd achieving- smaller families. It led to an emphasis on children of ‘quality’: surviving children began to receive more parental attention. This included increasing investments in education, for boys as well as for girls, in both public and private spheres. By implication, the economic costs related to childbearing and childrearing also increased.

Ultimately, this process of increasing reproductive efficiency with its ideational and economic implications can be seen as a prerequisite for the entry of women into the labor force. The increases in the labor force participation rates of woman have their own set of economic, social, and cultural causes. One of them, however, was the revolution in reproductive efficiency and the way it affected women and families: it made labor force participation possible in terms of time, helped create the economic need to do so and paved the way for the increases in education necessary to make this sort of activity a part of the life expectations for women. Taking a job and keeping a job after marriage became standard fare for the great majority of women in these countries.

All of this has led to a substantial rearrangement of women’s position in society and, by implication, that of men as well, providing an overall reduction in the gender differentiation of public and private life. This is one of the most important social changes of the entire twentieth century, one whose implications should not be underestimated. Women are now as highly educated as men, have activity rates that are every bit as high, and make an important contribution to family economies. All of this has led to sharply declining fertility coupled with profound changes in certain dimensions of family forms, the meaning of the family, and family life generally.

Having children no longer has the type of overriding importance that it once did for women (and for men) only half a century ago. Historically, by implication a successful life for a young woman meant having children and a family. With some exceptions, if you didn’t have a family you were not successful in life, either in the eyes of society or in your own. In situations such as these, sacrifices were made to be successful, no matter what the cost.

Today, having a family is still an important part of success for most women in the developed world, but it has a much lower priority than it did before. In a somewhat arbitrary way, we might say that in the past having children and a family was 80 percent of what could be considered success in life, and now it is closer to 30 percent. As this happens, the opportunity costs for reproductive success necessarily become higher and people are more willing to negotiate, especially when circumstances are not ideal.

It is not difficult to see how problems can abound in these sorts of situations. They can include problems with a person’s career expectations, with finding the right partner, with the housing or the job market, with the willingness of men to share fully in home and family responsibilities, with gender equity, with the reality of having to lower one’s expected living standards in order to have a child, or with the difficulties inherent in raising children in modern societies where there is little social, private or public support for families raising children. The importance of these factors may vary across societies, thus helping to explain existing differences in fertility. Even so, these concerns are common to young couples everywhere in the developed world and figure mightily in their reproductive decisions. Having a family is an expensive, long-term investment. Since it is no longer an overwhelming priority for women (or for men), as it once was, they are much more willing to negotiate these expectations. For men, being successful in life tended to be based mainly on professional success, more than on having a family. It was women who made families function and held them together, not men. This is why these changes we have described in women’s values and expectations have had such a profound effect on reproduction and the family. The persistently low fertility over the past half century in much of the developed world is impossible to explain without this sort of ideational change. Should the current levels of fertility in developed societies continue to be linked to the role of women in society, by implication, then, below-replacement fertility will be with us for a long time to come. Contrary to what had been expected in classical demographic transition literature, fertility did not decline to replacement levels. Replacement fertility proved to be only a road sign en route to significantly lower levels of reproduction and, eventually, to falling numbers of births. This occurred in different parts of Europe some time between the mid 1960s and the early 1980s. The demographic result of this is very clear as the process of aging and eventually of population decline accelerated and became common fare for most of these societies.

3. Perspectives for the developing world

What about the rest of the world? There continues to be a general feeling that for the most part fertility will remain above replacement and so the prospects for the coming years point to a slow down in growth, but not to a reversal of growth. Is this supposition reasonable? The existence of a hypothetical ‘floor’ to fertility decline was a widespread belief in Europe during much of the twentieth century, and the upturn in fertility in the postwar years seemed to confirm this belief. Yet historical reality showed how unrealistic that expectation was. Is it realistic for much of the developing world? The relative lack of economic development, low levels of education and strong family cultures suggest that it may well be. Yet there are also signs to the contrary. At present, fertility is already below replacement in nearly 60 of the world’s nations, and many of them are not developed countries. We can understand the processes at work better if we look at the demographic transition in these nations. Very generally, its specifically demographic characteristics can be summed up in the following points:

1) Fertility decline began for most of the world’s populations some time between 1955 and 1980; and mortality decline began much earlier.

2) The long lag between mortality decline and fertility decline led to accelerating rates of population growth that have only recently begun to slow.

3) The pace of decline, both of fertility and of mortality, has been far faster than in the historic demographic transitions; possibly twice as fast or more. This disparity in pace is due to a large extent to the technological context within which these transitions took place.

4) Population aging in these countries is also proceeding at a far more rapid pace than it ever did in the historic transitions. In many countries, the number of births has already begun to shrink and promises to continue to do so in the future.

5) Completed family size is now declining rapidly as the reduction in fertility outpaces improvements in mortality. This is exactly the opposite of the process taking place during the central decades of the twentieth century when over the course of a generation completed family size nearly doubled with respect to pre-transitional levels due to rapid mortality decline coupled with high and sometimes rising levels of fertility.

Should present trends continue, ultimately they will lead to significant decreases in the population of reproductive age. At that stage, the negative population momentum so visible in many developed regions of the world will make itself felt elsewhere as well. Long-term population decline will set in, only three to four decades after it commences in the developed regions of the world. The gap between the onset of fertility decline and the onset of population decline, which spanned more than a century in historic Europe, promises to be far shorter in the developing world.

4. Some conjecture regarding the future

The trend towards population decline has been building for many years now. In some areas where this process is further advanced population will decline by as much as 20 percent in the next 50 years. Should present trends in fertility continue, decline by the end of the century will be much greater. Since this upcoming period of decline will hinge on low fertility, populations will tend to be loaded with elderly persons, and children and working age populations will be shrinking.

From the standpoint of natural resources and the environment, over the long run this will be good news indeed. Eventually the twenty-first century will be seen as one in which the excesses of the nineteenth and twentieth centuries were corrected. This is not to say that over the coming decades there may not be vast struggles for control of certain shrinking natural resources. In the long run, human demand has had a dramatic effect on the environmental balance throughout the world, and the upcoming period first of slow growth and then of decline, will be a powerful correction for this process.

As for the society of the future, expectations are not nearly so optimistic. Severely skewed age structures, an unavoidable by-product of the process underway, will have important consequences for all aspects of social welfare that depend on the redistribution of resources. It is important to remember here that the present state of affairs in the developed world with declining numbers of births has been reached despite ever-greater numbers of women of childbearing age. In most of the developed world in the very near future, the number of women of childbearing age will begin a process of reduction that even in optimistic circumstances is likely to last for many decades. In other words, we are entering into a world of below-replacement fertility and shrinking numbers of women of childbearing age. This means that the pace of reduction of births should begin to accelerate, even in the face of moderately rising fertility.

Economists are well-acquainted with the issue of aging and grapple with potential solutions ranging from later retirement to increasing women’s labor force participation, large-scale immigration, or reducing pensions and dismantling what is left of the welfare state. While certain doubts exist as to the economic expediency of many of these mechanisms or whether or not they will bring with them unwanted side effects, especially in the case of international migration, it is unquestionable that they represent a safety valve for rapidly aging societies. If current trends persist, however, over the long run none of them may prove to be more than partial remedies. International migration itself, the focus of much current attention and concern, is unlikely to represent more than a temporary and rather inadequate solution for skewed age structures and population decline for two reasons.

1) Fertility among migrants, while initially higher than among the native populations, very quickly tends to decline to levels holding in the host society.

2) More important, perhaps, is the fact that many sending regions will be experiencing labor shortages of their own within two or three decades. It is unquestionable that these countries currently have abundant supplies of surplus labor that can be funneled fairly directly to receiving countries, normally developed ones, suffering from labor shortages.

This situation, however, cannot be sustained indefinitely because of the dramatic fertility decline taken place among those sending countries. This is not to say that the developed world of low fertility will not continue to be able to attract immigrants. It will thanks to higher wages and living standards, though this process may become far more conflictive than it is at present where problems basically only really affect the social integration and adaptation of migrants in the host societies. The point here is that in a few short decades there is a good chance that labor shortages will become a problem affecting most of the world and not just one of the developed nations.

A shortage of labor and the abundance of tax revenues it must generate that are increasingly diverted from productive assets towards more pressing social needs will eventually be harmful for living standards and welfare systems. Economic growth itself may also be adversely affected by general population decline, as demand for goods and services and levels of investment shrink accordingly. The relative importance for living standards and economic growth of these two issues (age structures and population decline) is not entirely clear. Even so, it is difficult to argue with the idea that together their effects will far surpass either of them taken alone. More than any other, the key issue here is the number of children born into society. With a moderately balanced age structure, all the challenges posed by increasing longevity can be met successfully, at least at a societal level. If age structures are severely skewed, however, it is much more difficult to be optimistic about the future.

As Massimo Livi Bacci (2001) said, children are not just a matter of personal consumption and preference, but also one of social investment. It is difficult to argue with this sort of reasoning. The key issue is just how this bottom line –having children- can be met. Many influential authors suggest that public policy can make a difference. Indeed it can, but just how much of a difference can it make? In Northern European societies, where aggressive pronatal public policies are in effect, fertility is also considerably below replacement and has been so for more than three decades now. Can policy convince women (couples) to have children? Recent experience in Europe suggests that policy alone cannot be successful.

This leads us to the pivotal issue of how to reconcile the commonweal and self-interest, at leastin terms of reproduction. Self-interest, as Adam Smith reminded us, has always been a key part of human life, past and present. How were the two of them brought into line in the past? The historical record is filled with examples of how slow population growth was guaranteed by means of economic limitations to population growth within a context of high pressure demographic regimes and close-knit cultural structures.

All of this changed with the demographic transition. Living standards rose and compensating for high mortality ceased to be an important part of people’s reproductive strategies. More important, perhaps, from a cultural standpoint, selfinterest was no longer bound by such strict norms. The ability of the family and traditional culture to govern reproductive decisions lost much of its traditional relevance with modernization. As a result, fertility decisions became conscious and individual, more influenced by social networks and by secular consumer society than by tradition. In so doing, the developmental idealism defined by Thornton became a guiding principle of modern life and an instrument itself of social change.

In addition, by the mid-twentieth-century the revolution in contraceptive technologies enabled women to control their reproductive outcomes with considerable precision. Unexpected by all, the great historical achievement of increasing reproductive efficiency –he centerpiece of the demographic transition- turned into dangerously low fertility. This process began many years ago in developed societies and appears to be well under way in the developing world. Ultimately, sustainable human reproduction may not be easily compatible with liberal economies that reward careers for women outside the home immersed in an increasingly pervasive consumer society with considerable amounts of individual economic insecurity.

Has the genie really been let inadvertently out of the bottle? Having children is ultimately an expression of confidence in the future; in the security of the life you can expect your children to be able to lead. At one level, this sort of confidence is subject to economic and political constraints. At another, deeper one, it is related to social and cultural stability. There is an immense cultural change under way in much of the West and it is related, at least in part, to the role of women in society. It is also related, of course, to the triumph of secularization, individualism and consumer society, long considered hallmarks of modernization processes. Despite what can be very legitimately viewed as the achievements of recent history, it is also true that this is a time of insecurity for both men and women as to their roles in society, the nature of their gendered relationships and the future. It is also a time of deepening concern about the sustainability of society as we know it. We are witnessing the demise of the ideological foundations upon which society has been built for the past two centuries. Times of flux are not times that are conducive to optimism about the future.

In Europe and in other world regions we do not know the ending date of the process underway, but it may well not be soon in coming. When it does, it will be at significantly lower population levels than those existing today or perhaps at any time during the twentieth century. It is unclear just how these adjustment mechanisms will come about or how effective they might be. In any case, the second half of the 21st century may be the b eginning of a long downward spiral of world population. From our vantage point at the turn of the millennium, we can envisage a great trend change with potentially enormous consequences. In that respect, we are fortunate indeed, at least from a scientific and historical standpoint. For our children, and especially our grandchildren, persistent population decline –nd possibly lower living standards- will likely be the only reality they will ever experience and the times of runaway population growth so prevalent in the nineteenth and twentieth centuries will be but a distant memory of the past.

Are other scenarios possible? Yes they are, but, at least at this stage, they are less likely than the one I have described. Some of these scenarios may be more benign (a return to replacement fertility everywhere aided by policies and changes in values), others may imply a complete turnaround in our attitude towards the family (the advent, for example, of certain technological innovations rendering personal reproductive decisions irrelevant), while others may be much less benign, implying aggressive public policies, social and political conflict, and the progressive abandonment of the social, economic and political achievements of the past two centuries. Even though the future is not really ours to know, demographers have an important role to play in bringing such crucial issues to the front and stimulating much needed debate.

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The role of the developed West in this process is central to the way the demographic transition took place in much of the rest of the world. The initial decreases in mortality were, to a large extent, more the product of the application of Western technologies with respect to health than they were to social development or maternal education as occurred in Europe. With respect to fertility, the role of family planning and efficient contraception, both strongly promoted by the developed world, were important for the onset and for the pace of decline (Demeny and McNicoll, 2006a: 12-39). These countries were both passive and eager recipients of European technology and ideals, with the consequence, at least in demographic terms, that there was an extended delay between mortality decline and the onset of fertility decline and, once started, the pace of fertility decline was extremely fast.

Will fertility stay above replacement and will the number of births continue to increase or at least remain at levels near where they are at present? Should current trends continue, many developing countries will have below replacement fertility in the very near future. This pace of reduction of fertility would seem nearly unstoppable, unless a baby boom takes hold in these regions, as it did for historic transitions during the 1950s and 1960s. The baby boom delayed the onset of belowreplacement fertility by nearly 20 years in the developed world, though it did not stop it. Fertility decline became a two stage process: an original decline, followed by a pause or even an increase in fertility during the baby boom, followed in turn by another period of intense decline. In the developing world, that same baby boom may have been a factor leading to the persistence of high fertility despite rapidly declining mortality.

Will there be a second baby boom in the developing world? Our guess is that there will not, mostly because the conditions of the baby boom were world-wide at the time and appear unlikely to be repeated, especially in light of the existence of efficient contraceptive technologies. For this reason, there is a chance that many developing regions will pass straight from the first period of fertility decline into the second one with little or no pause.

A more pertinent question, however, is whether the role of women in society is also being dramatically altered. Increasing reproductive efficiency, so vital for Europe’s social and economic transformation, is unquestionably affecting women the world over. Will this lead to increasing investments in the quality of children? We believe it will, especially as completed family size continues to decrease. It is unquestionable that the role of women in society is changing, though there continue to be enormous disparities. In some areas, there are already indications that woman no longer see their future as simply getting married and having children. Women’s education has been increasing dramatically the world over. Despite problems in estimating female labor force participation in different societies over time, it too appears to be on the increase.

One of the characteristics of historic transition processes is that they commenced in a wide variety of contexts, though in the end the effects tended to converge everywhere. This also appears to be true in much of the developing world: social, economic and cultural disparities amid demographic similarities. Everywhere the value of children and the costs of raising them will increase, and so will the pressures on women to take advantage of new-found time available to them to generate further income for their families. There may be disparities in timing, but the process appears to be widespread.

The implications of the demographic transition in much of the developing world are becoming clear. The process of aging will be far more rapid and more intense than it was in historic populations. In this way, similar changes will take place in as little as half the time that it took in European nations. Throughout the developing world, aging and its attendant economic and social challenges will become an acute social issue relatively soon after it becomes a central concern for societies in the developed world. The intensity of change will leave these nations with but a brief window of the opportunity for modernization within which to take full advantage of the “demographic dividend” derived from their own transitions(Bloom, et. al, 2003).

Labor shortages will be one aspect of the issue of aging. In some countries, this shortage of working age population is easy to predict because numbers of births have already been declining for several years. We believe that it is only a matter of time (perhaps 2-3 decades) before they begin to affect many or most societies in the developing world. The availability of surplus labor (potential migrants) to compensate the dearth of labor in the developed world may eventually be called into question, as the sending countries begin to suffer labor strictures of their own.

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