Last week, when reviewing some of the family talk on the campaign trail, I mentioned a new study co-authored by Brad Wilcox called The Sustainable Demographic Dividend. As many National Review Online readers know, W. Bradford Wilcox is director of the National Marriage Project at the University of Virginia. He is also the president of Demographic Intelligence, the premier provider of U.S. fertility forecasts and fertility analytics for companies in the financial-services, food, household-products, insurance, juvenile-products, medical, and retail sectors. He talks to National Review Online about what exactly fertility and marriage have to do with the economy. –KJL
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KATHRYN JEAN LOPEZ: What is a demographic dividend? Why is it important to the economy?
W. BRADFORD WILCOX: Traditionally, a “demographic dividend” has been defined as the economic advantage that countries transitioning from a high-fertility regime to a low-fertility regime gain when the children that were born during the high-fertility years have entered their prime working years (15–64) but are not having many kids of their own. This allows countries to focus their human and financial capital on education and the market economy, rather than raising children, and — assuming policy conditions are right — enjoy a spurt of economic growth.
Economist David Bloom argues that more than 25 percent of the per capita GDP growth associated with the East Asian economic miracle of the late 20th century can be laid at the feet of the dramatic demographic changes that swept over East Asia in the last half century, when the total fertility rate fell from about six children per woman in 1950 to well below two today in most East Asian countries. These demographic changes freed up time, energy, attention, and capital on the part of men and, especially, women that could be focused on the economy.
In the short term, this demographic dividend can work out brilliantly, as the East Asian miracle attests. But in the long term, this dividend can turn into a demographic liability as birth rates fall well below replacement and a society ceases to produce enough people to work in the economy and pay for the welfare state. This is what is now happening in Japan, and a similar fate may befall other leading economies in the region — from Taiwan to South Korea.
In fact, just last month, a leading South Korean think tank predicted that the South Korean economy could face a major downturn within the next decade, because the country’s workforce is now poised to shrink as a consequence of long-term low fertility in the country. The bottom line: In the short term, low fertility can bring increased economic productivity and growth, but in the long term, low fertility may undercut growth if population trends prove unsustainable to the economy and the welfare state.
LOPEZ: Is demography destiny?
WILCOX: No, it’s not destiny, but demography does have a major impact on the economy and the state — especially when the state is in the business of providing public pensions or health care to the elderly.
We’re seeing this right now in the United States with our debates about the long-term solvency of Social Security and Medicare. And many countries in Europe and East Asia are now facing severe fiscal pressures related to their own patterns of sub-replacement fertility and population aging. Obviously, it is hard to provide generous pensions and health care to retirees when the working-age share of the population is stagnant or shrinking, and the share of dependent elderly is surging.
Why is it that when, during a previous attempted posting to NRO, I commented upon exactly this topic -- that the real economic catastrophe in Europe is due to the fact that the West has aborted and contracepted itself into near-oblivion -- my comment never saw the light of day? Is it because I dared to challenge the prevailing ethos -- that contraception (not just abortion) is, aside from ethical considerations, a disaster economically for those societies that drift towards below-replacement fertility rates? I urge your readers to visit Population Research Institute's (I have no connection with this organization): www.pop.org You will see there for yourselves why, because the Western world has selfishly rejected God's own law on human relationships, we are now on the precipice of the extinction of European civilizations, including our own. America itself would already be in Europe's predicament if it weren't for the Hispanics migrating here to save us from our own demographic stupidity.
For someone fairly new to conspiracy theory, it would seem that the No Fault Divorce laws, abortion, feminist agenda, and anti-Christian campaigns are great ways to hasten the decline and collapse of Western society. You know there sure seemed to be a lot of wisdom for society in that old book called the Bible. Too bad we've given up that Godly heritage for a heaping bowl of toxic Leftist big government soup. What was the road to He!! paved with again?
Take a guy who graduates college. Give him a job bagging groceries at Publix for $10 an hour because that's all he can find. After a year, that's still all he can find. He's 23, he has a live-in girlfriend, and, sure enough, she's doing much the same thing.
That's $41,600 gross. One apartment, two cars, some food and some clothes will eat up a huge chunk of that, if not just about all.
They want to do the right thing -- get married and start a family.
They're thinking: "Are we nuts?"
The market -- the free market -- is converting this nation to a vast army of service workers serving a small class of very well-off people. In that small class, you see Ann Taylor moms and Brooks Brothers dads packing their infants into $150 Nordica car seats in the back of Volvo station wagons and dumping $400 Peg Perego strollers in after them.
Kids are a luxury now. Look around you. Yeah, there's a huge class of people who copulate and spawn like animals and bring babies into the world under the most disastrous circumstances. But for two young adults who want to do it right -- America looks like anything but a place where they think they have a good chance of swinging it.
Agreed - except that these stressors are in spite of the free market rather than because of it.
The same demographic trends played out first behind the iron curtain. Then eventually in northern Europe and Japan. We are actually late to the decline due to the beneficial influence of our formerly-free market economy.
My husband and I are not only raising our 4 kids, 2 younger children and 2 teens, on just over your $41,600 gross but have enough money available to take in a "spare kid" -- a young adult whose own, dysfunctional family isn't there for him.
The problem for your hypothetical couple isn't poverty but, rather, selfishness and love of self-indulgent luxury.
How much do you spend on housing? How did you acquire a car and how much are you paying for it? Do you receive any government assistance such as food stamps or SSI?
Would love to know. In all but a few places in this country, $41,600 gross just won't cut it for a family of four, let alone seven.
This is the first time I can remember agreeing with MkeB.
I don't see how a family of 7 can live in the U.S. with any semblance of middle class affluence without being heavily subsidized by the government or by family. (This subsidy could take the form of free housing.) Young people who wish to avoid being on the dole simply cannot afford both children and rent or a mortgage payment.
I was born into a blue collar family. I worked in the service sector. Now, thanks to the (relatively) free market, I'm literally driving a Volvo and loading goods into the back.
There are certainly problems, but they are more problems of priorities than structural deficiencies. Small changes to the tax code, what is subsidized grows, could do wonders.
Getting back above replacement level is important, but I don't think it will be the be-all and end-all. As the interviewee stated children have become a luxury.
However, at the same time they have (and specifically large families, families that start relatively early, both of which would have the strongest effect in reversing the trend, are considered the realm of low-class, "lesser" not "proper" people.
This paradox is the result of the idea that people who attain the means can constantly separate themselves from the rest of society, as long as they can get far enough into the suburbs, and have enough "civic improvement associations" giving them enough rules that they can gentrify the rest of the world into irrelevance.
Not logical.
I'm not sure that we can reverse the demographic trend without fixing the economy first and/or reduce (both the economic, and even more importantly, social) costs of having children. Saying that reversing the trend will fix the economy in that order is putting the cart before the horse.
