Rapid Ageing in Korea

From - Facing the Future: Korea's Family, Pension and Health Policy Challenges
OECD Working paper.

Extraordinarily rapid ageing of the Korean population

The increase in the maternal age in first childbirth has contributed to the sharp decline in the fertility rate in Korea. The birth rate was 6 children per women in 1960, about half that in 1975, and is now at about 1.2 children per women; among the lowest levels recorded in OECD countries (Chart 1.5). Socio-economic changes, including industrialisation, urbanisation, changes in family values, gender roles, attitudes towards paid employment and pursuing careers have all contributed to changes in family formation and the decline in the birth-rate.

In addition to changes in fertility behaviour, there have been sharp reductions in infant mortality rates, from 45 infants per 1000 live births in 1970 to 5.3 in 2002; the infant mortality rate is now below the OECD average of 5.7 infants per 1000 live births (OECD, 2005c). There has also been a dramatic increase in life expectancy in Korea

Compared to other OECD countries, except perhaps Turkey and to a lesser extent Mexico, the gains in life expectancy in Korea have been spectacular over the last 45 years: for women from 53.7 years on average in 1960 to 80.8 in 2003; and from 51.1 to 73.9 for men over the same period. Compared to most other OECD countries, the proportion of the foreigners residing in Korea is low: only 0.9% of the population is foreign born (OECD, 2006b). In the absence of important migration flows, the sharply reduced birth rates and the huge gains in life expectancy at birth will lead to an extraordinarily rapid ageing of the Korean population.

By 2050, the number of people not yet 30 years of age relative to the working age population will have fallen to 29% from 46% in 2000. This will have a profound effect on, for example, the demand for education services, which is likely to lead to dramatic changes in the number and structure of schools and universities. At the same time, the number of senior citizens relative to the working age population will increase from just below 10% in 2000 to almost 70% in 2050 (Chart 1.7); and only Italy, Japan and Spain will have similarly 'old' populations in 2050. These dynamics will impose a considerable burden on future working age populations and challenge the innovative capacity of Korean policy-makers.

Socio-economic factors contributing to low fertility rates


The traditional Confucian based family-support-system has long been an important cornerstone of Korean society. In this concept the 'extended family' (often living together in one household) plays a key role in providing support, either through direct provision of care, or otherwise through the provision of transfers. However, the nature of Korean society has started to change. The prevalence of extended households is diminishing: the incidence of three-generation households fell from 22.1% in 1970 to 9.9% in 2000 (KNSO, 2005). There number of households with children is rapidly declining in rural areas while there growing number of married couples without children, and the number of households. These factors suggest that there is an increasing proportion of elder couples who are living on their own (especially in rural areas), while in urban areas there are also likely to be more younger couples without children.

The trend to smaller households coincides with a decline in birth rates more generally. The decline in birth rates mainly involves increased childlessness among women and a decline in larger families. Table 2.2 shows that the number of first-born children in 2004 is about two-thirds the number of first-born children in 1981 which point to a decline in the number of women who have children. Once Korean women have become mothers it is very likely that they will have a second child, but not more. The number of larger families has dwindled; the proportion of babies who are borne into families with two children already present is only 20% of what it was 25 years ago.


Koreans are getting married at a later age. The median age at first marriage for women increased from 24.4 years in 1990 to 27.5 in 2004 (OECD, 2007b). In theory, later marriage could merely lead to a postponement of fertility (and a temporary dip in birth rates), but, in Korea it seems to have led to a more permanent decline in family-size. The change in the fertility rate is also related to an increase in the acceptance and the number of people who are not marrying (KNSO, 2005). At every age, unmarried people have much lower fertility than married people, but this is particularly true for Korea, where births out-of-wedlock hardly ever occur. In contrast to many European countries, and Nordic countries in particular, cohabitation generally does not extend to parents with children. It is difficult to quantify the relative importance of these different factors on fertility trends, but much more than in other OECD countries, changes in fertility trends in Korea are related to changes in marriage behaviour.

The change in fertility behaviour is also related to changing attitudes within Korean society. The male-breadwinner
model involves a clear allocation of responsibilities, with men providing family income, and women providing care
at home. Female employment was incompatible with caring for children, and as long as most women accepted this
gender division of responsibilities, fertility rates remained stable and high. However, changing female aspirations,
as, for example, reflected in increased educational attainment and increased labour force participation, diminished
the relevance of the male-breadwinner model and contributed to the desired decline in fertility rates. Indeed, unlike
most OECD countries, birth-rates in Korea were above desired fertility levels in 1981. By 2000 that had changed.


Education and housing costs, and the perception thereof, are often referred to as important factors which affect
fertility behaviour. Good housing is hard to get in Korea - about a quarter of households live in accommodation
that does not meet the minimum standard and housing costs are substantial and increasing rapidly in recent years
(OECD, 2005a). The high cost of housing poses the greatest difficulty to first time buyers, and although this group
is relatively small, many of those are either young people who wish to start a family or young families with children.
Housing constraints thus co-determine the timing of leaving the parental home and, in turn, marriage and first birth.
The high costs of childrearing in general, and high education costs in particular are perceived as a major problem
by many parents in Korea. Spending on primary and secondary schools is largely public in Korea; public spending
amounted to 3.5% of GDP in 2003 while private spending amounted to 0.9% (OECD, 2005d). However, in order
for their children to gain entrance to the most prestigious universities, many parents organise for their children,
if they can in any way afford it, to attend very expensive education, such as tutoring or the after-school learning
institutes, and this can cost up to about USD 25,000 annually per annum. The cost of university education is largely
borne by parents: in 2003, spending on university education amounted to 2.6% of GDP of which approximately
80% concerned private spending, compared to average spending on tertiary education across the OECD of about
1.1% of GDP, of which close to 40% was privately financed.

Increasing the incidence of (non-regular) part-time employment opportunities (see below) and changing the duration
and generosity of income support during parental leave, are likely to have little effect on fertility behaviour in Korea.
On the other hand, greater investment in childcare and pre-school services, and introducing public transfers to families
which relieve the cost of raising children are among the factors that potentially could have a large impact on the The estimation technique underlying the projected impact on fertility behaviour as in Chart 2.3 does assume, however,
that Korea were to develop spending on its family benefits up to the level of the third-ranked country in
the OECD area. In reality, this is unlikely to happen in the near or distant future, as spending on family benefits
is relatively low in international comparison. In 2003, it amounted to about 0.12% of GDP; by contrast, this was
close to 4% of GDP in Denmark. The system of public family support is under construction in Korea, and includes:
support for family welfare services, community centres, orphans, childcare services and pre-school education. Since
2001, Korea has a system of income support during maternity and parental leave. In 2008, an in-work benefit will
be introduced that will support low-income families, and there is debate on extending childcare support and/or introducing
an (income-tested) child allowance (see below and OECD, 2007c, forthcoming).

Childcare and pre-school education is just one of the areas where limited public support has contributed to access
issues. Compared to other countries participation in formal care arrangements by under 3s is not high in Korea.
Participation in preschool services by 3, 4 and 5 years old is higher at almost 70% (Chart 2.5). In the case of
childcare and pre-school participation parental fees do not appear to be excessive on average (Immervoll and Barber,
2005). Rather it seems there is a lack of access to good quality services for very young children, and while traditional
attitudes on maternal caring roles may curtail demand for formal care services the latter are nevertheless to fall
well short of demand (see, for example, Kim and Kim, 2004). The constraints to childcare and pre-school capacity
are likely to contribute to mothers often providing personal care for very young children on a full-time basis.
Among OECD countries, policy makers in Japan (OECD, 2003b) and Korea are arguably most explicit in their
aims to foster an environment conducive to parents having as many children as they want. However, compared to
the prominent role of fertility concerns in the Korean social policy debate, budgetary allocations to support such
initiatives have been limited.
Moreover, rather than introducing a single measure, it is increasingly realised in Korea that a comprehensive policy
package is needed to reverse existing fertility trends. Steps undertaken in this process include the introduction of
the "The Low Fertility and Ageing Society Policy Act" in September 2005 and the signing of a 'convention' or
'master plan' towards higher fertility rates by different social partners in July 2006 (Box 2.1).

Box 2.1: The 'Master Plan' for increasing fertility in Korea
The 'master plan' for increasing fertility rates reflects increased awareness of fertility concerns and involves a convention
signed by social partners including the government, employers associations, trade unions, and civic groups
(Government of Korea, 2006). The "master plan" encompasses a wide array of different measures that increase family
resources and facilitate the reconciliation of work and family life:
• Increase the coverage of income-tested childcare support to serve about 80% of all children aged 0-5 in 2009.
At present only families on social assistance or with earnings below 70% (there are exceptions) of average monthly
urban worker household earnings (about KRW 3,350,000 or about USD 3,500 for a 4-person household) are eligible
for fee support. By 2009 this will cover all families with children whose earnings are below 130% of average
urban worker household earnings.
• To help parents combine their family and work commitments when children get older, the planned provision of
out-of-school-hours care in all primary schools by 2010; in 2006, about 20% of primary schools provided such
a service.
• To increase investment in public childcare facilities to cover 30% of children under that age in centre-based care
(in 2005 this proportion was 11%), the government also subsidises private care centres which provide services
to 0-2 olds. To enhance the quality of services of such services, an accreditation system will be introduced with
quality assessment being carried out every three years, from 2008 onwards. Flexible child care services will be
expanded so that more night-care services and hour-based care services will be available in the near future.
• The tax system will be made more favourable for larger families. Also, a child-birth credit will be introduced
to the National Pension Scheme (NPS), worth one year of pension contributions in case of a second child and
worth 18 months contribution from the third child onwards, up to a maximum of 50 months. The credit is given
to one adult in couple families, but equally divided among spouses if they so wish. The introduction for a child
allowance is also being considered, but subject to a review of possible financing mechanisms
• Provision of maternity leave is being expanded. From 2006, the unemployment insurance scheme pays maternity
leave benefits up to a maximum of KRW 4,050,000 (about USD 4,240) for 90 days, (also to female workers
in small and medium-sized enterprises and female workers who have a miscarriage). From 2008, 3 days' paternity
leave will be introduced. Parental leave benefits will become more generous: for children born from 2008 onwards,
parents will be entitled to 1 years leave to care for children up to 3 years old (at present all leave has to be
taken prior to the first birthday), and payment will increase from KRW 400,000 per month (about USD 420)
to KRW 500,000 in 2007. It is also intended to introduce a flexible working hours' system for working mothers
with care responsibilities for young children in 2008. The government will also introduce a bonus-payment for
employers who hire mothers with young children who wish to return to paid employment.
Other measures in the "master plan" include an accreditation system for family-friendly enterprises, increase awareness
of the value of family-friendly policies and gender equitable practices, improve child-safety measures, establish
systematic monitoring (check-ups) of pregnant women, mothers, babies and infants within the public health system.
In 2007, the eligibility criteria in the existing system of income-tested financial support towards IVF-treatment for
couples who are not able to conceive will be loosened so as to increase coverage.


Across OECD-countries the relationship between female employment and fertility appears to have changed over
the last 35 years or so (OECD, 2005f). In the 1970s, there was a clear negative correlation between female employment
and fertility rates, but, in 2005, OECD countries with higher rates of female employment also had relatively
high fertility rates (Chart 2.6). Clearly, the degree of incompatibility between paid work and providing care has
diminished, but there aresubstantial cross-country differences: combining childrearing and being in employment is
most incompatible in the Mediterranean countries and Japan and Korea and least incompatible in Nordic countries,
New Zealand and the US (for example, Engelhardt, et al, 2001 and Kögel, 2001).

Female labour market aspirations and behaviour have clearly changed, and this change in behaviour has led to
policy reform. Policy tries to reduce barriers to employment and increasing "choice for parents" in making their
work and care decisions is the overriding policy objective across the OECD, even though the underlying emphasis on wider policy issues varies. For example, while fertility concerns are a key concern in the Korean social policy
discussion, this issue hardly features in the British or Dutch debate. Similarly, while gender equity objectives feature
prominently in Swedish policy design, this is far less so in many other OECD countries, including Korea. The underlying
differences in emphases in policy objectives are important for the understanding of differences in policy design
(as well as outcomes) across the OECD area (Box 2.2).


Box 2.2: The OECD Babies and Bosses reviews of work and family reconciliation
The OECD Babies and Bosses series considered how policies can help balance work and care responsibilities, and
covered 13 countries in 4 volumes: Australia, Austria, Canada, Denmark, Finland, Japan, Ireland, the Netherlands,
New Zealand, Portugal, Sweden, Switzerland and the UK (OECD, 2002; 2003b 2004a and, 2005e). A synthesis report
including indicators on countries not reviewed is being prepared for release in 2007; the reviews have also led to
the establishment of an on-line OECD database on family outcomes and family policies (www.oecd.org/els/social/familyfriendly/
database).


The Babies and Bosses reviews favour systems which provide a continuum of support - support for full-time
personal care at home when the child is very young, leading on to a childcare place, pre-school, school and
out-of-school-hours care activities, as in Denmark, for example. Such support systems are expensive, but public
outlays could be reduced through targeting.

Population replacement, social mobility and development in Italy in the twentieth century

Population replacement, social mobility and development in Italy in the twentieth century

Gianpiero Dalla Zuanna
Journal of Modern Italian Studies, Volume 11, Number 2, June 2006 , pp. 188-208(21)
(link here)

Abstract:

Many scholars have expressed alarm at the low fertility and sustained immigration that have characterized Italy in the last decade (1.3 children per woman and an increase of more than 200,000 immigrants per year). This article takes a different approach, showing how low fertility and strong migratory balances (involving migration both between Italian regions and from abroad) have enhanced the formation of human capital, facilitating family strategies of upward social mobility, the construction of a more balanced labor market, increases in income and a decline in the graying of the population. The combination of low fertility and sustained immigration, therefore, has been and still is a fundamental resource for development of the population and of Italian society, especially in central and northern Italy. The article also discusses modifications in family and immigration policies suggested by these findings.

Towards Long Term Population Decline

TOWARDS LONG TERM POPULATION DECLINE: VIEWS AT A
CRITICAL JUNCTURE OF WORLD POPULATION HISTORY


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.

5. References and related reading


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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.