Getting Older, Or Getting Younger?

Warren Sanderson & Sergei Scherbov had a very interesting article in Nature earlier this year (you can find the full article reproduced here on page 5). The article title really tells the story in itself: average remaining lifetimes can increase as human populations age. Put differently, we may be facing the interesting enigma that the longer we live, the longer we have left to live.

But, riddles aside, what Sanderson and Scherbov actually propose is a new metric: the median age of the population standardized for expected remaining years of life. Now why would that be interesting?
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Wolfgang Lutz and the Low Fertility Trap

Back in July I published a post about Austrian demographer Wolfgang Lutz’s hypothesis that those countries which sustain total fertility rates below 1.5 for any length of time may have fallen into a self-reinforcing low-fertility trap. Old Rottenhat (Ray to his friends) argued in comments that I had explained the reasons for the existence of low fertility but that I had not justified the idea that this was a ‘trap’. Old Rottenhat was right, and taking advantage of the fact that Lutz himself has now given a fuller outline of the hypothesis at the recent Postponement of Childbearing in Europe Conference (see presentation) I will now try and remedy this lacuna.

So here finally Ray, is your reply: I hope it is something which indeed goes beyond the obvious.
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The Postponement of Childbirth in Europe

At the present time some 66 countries have fertility rates which are below the level necessary for population replacement (TFR 2.1). Within the next decade the number of counries in this group is set to grow to the point where a majority of the world’s population will be living in regions where the existing population no longer replaces itself. This development in an of itself is no disaster – many countries arguably suffer from excessive rates of population increase – but equally reducing fertility too rapidly can lead to economic and social ‘imbalances’ that may well turn out to be, in and of themselves, ‘undesireable’.

Understanding why this is happening has begun to present an important challenge for many areas in contemporary social science as there are evidently factors involved in the process which embrace areas as diverse as demography, sociology, anthropology, psychology, political science, economics and of course biology.

One of the characteristic features of this most recent fertility decline is that it is driven largely by a delay in childbearing: couples (and obviously in particular this means women) wait longer and longer before taking the decision to have a child. Understanding the dynamics behind this ‘delay syndrome’ is the key to developing a social policy to address the consequences, so it is particularly timely that the Vienna Institute of Demography was host last week to a Conference on this very topic: The Postponement of Childbearing In Europe. A number of interesting and important papers were presented, and I will be looking at a number of them between now and xmas. Indeed I have opened a page on my website which will be dedicated to the Conference.

But, just as a taster, why is postponment so important?
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The End of the Dolce Vita?

Are the good times and the good life still going to continue to roll in the Italy of the twenty first century? This is the core question the Economist’s Europe editor John Peet asks in the latest Economist Survey: Italy, Addio, Dolce Vita. As Peet says:

Italy is approaching a crunch. Rather like Venice in the 18th century, it has coasted for too long on the back of its past success. Again like Venice, it has lost many of the economic advantages which underpinned that success. For Venice, it was a near-monopoly on trade with the East that paid for the creation of its beautiful palaces and churches; today’s Italy has benefited hugely from a combination of low-cost labour and a switch of workers away from low-productivity farming (and the south) into manufacturing (mostly in the north). But such good things invariably come to an end.

Italy badly needed a dose of pro-market reforms, liberalisation, privatisation, deregulation and a shake-up of the public administration, all of which Mr Berlusconi had promised. He even pledged to cut taxes. A majority of Italian voters, backed by much of Italian business, were willing to overlook both his legal entanglements and his conflicts of interest and give him a chance to reform the country. But as the next election approaches, very little of what he promised has been delivered, so many of his erstwhile supporters are feeling disillusioned.
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Go West Young Man

My preocupations about the impact of demographic change on German society are already pretty well known. Well if Germany as a whole has a sizeable problem, the former East German Lande have a huge one. The state-owned KfW development bank project in a report out today (German only unfortunately, an English version of the press release is here) that the while the population of the old West Germany will drop by six percent between 2002 and 2050, that of the six eastern states will decline by a whopping 25%. Not to mention the fact that those who remain are likely to be even older on average than their Western counterparts. As a consequence the available workforce is likely to fall by a staggering 55%.

The issues raised by this research are large and important. Is, for example, East Germany now in irreversible decline? Can this process repeat itself elsewhere (including between rather than within nation states) as younger, more highly skilled and more mobile workers leave ageing and relatively more depressed areas etc?

The issue of migration from East to West Germany been receiving attention for some time now. Frank Heiland in a survey “Trends in East-West German Migration from 1989 to 2002” (follow the link and go to Volume 11 article 7) argues that there have been two waves of East-West migration The first one, 1989-1990, was triggered by the opportunities and uncertainties before the Reunification; the second one, since 1997, coincides with economic stagnation in the East and improving job prospects in the West.
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China: Eating our Lunch or Taking us to Dinner?

That’s the dilemna posed by the latest paper from Laurence Kotlikoff Hans Fehr and Sabine Jokisch: Will China Eat Our Lunch or Take Us to Dinner. Simulating the transition paths of economies in the U.S., EU, Japan, and China the paper develops a dynamic, life-cycle, general equilibrium model to study their interdependent demographic, fiscal, growth and current account evolution.

Having taken a close look at the respective population dynamics they point out that as a consequence of relatively high fertility and net immigration rates, the U.S. population is projected to increase from 275 million in 2000 to 442 million in 2100. In Europe – as we all already know – population may well fall over the next century from 375 to 340 million, while in Japan, the population falls from 126 million to 85 million. However the projections show the Chinese population decreasing by even more – from 1.3 billion to 1.2 billion. Although China is in fact aging rapidly, its saving behavior, growth rate, and fiscal policies are currently very different from those of developed countries. Kotlikoff et al find that if successive cohorts of Chinese continue to save like the current cohorts, if the Chinese government can restrain growth in expenditures, and if Chinese technology and education levels ultimately catch up with those of the West and Japan, the developed world’s long run future looks much brighter. China eventually becomes the world’s saver and, thereby, the developed world’s savoir with respect to its long-run supply of capital and long-run general equilibrium prospects.

In a recent article on declining yield differentials William Pesek (Hat Tip Brad Setser) asks “What’s China got to do with all this?”. Perhaps the paper by Kotlikoff et al offers him part of the answer. (I have more on this paper here).

Switzerland Says Yes

Swiss voters said yes in a referendum this weekend to extending an agreement with the EU on the free movement of workers to include the EU-10 ‘new accession’ members (and here). Well sort-of. They voted by 56% to 44% to gradually ease restrictions on the working rights of citizens from these countries so that by 2011 (the same year as France and Germany) they will enjoy equality of access with those from other EU countries. (The only EU states to have opened their labour markets to the new members to date are the UK, Sweden and Ireland).
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The Outermost Regions

In the comments to a recent post, the question arose of the “natural boundaries” of the EU. Apropos of that, let us briefly consider those parts of the EU that are outside of Europe. Sometimes very far outside.

The EU has a formal name for these territories: they are “the Outermost Regions of Europe”. Officially, there are six of them: Guadeloupe, French Guiana, Martinique, Réunion, the Azores, the Canaries and Madeira. Four French overseas possessions, two Spanish and one Portuguese archipelago.

I say “officially”, because there are a number of territories that aren’t covered under this. The Spanish enclaves of Ceuta and Melilla in Africa aren’t, presumably because they’re considered part of metropolitan Spain. The Falkland Islands aren’t, because that would be very upsetting to Argentina. And French Polynesia isn’t, because French Polynesia is very confusing. (This is a territory where everyone has double citizenship — French and French Polynesian — and that’s the least complicated thing about it.)

Then there’s Greenland, which is part of Denmark, except not exactly; the Turks and Caicos Islands, whose citizens are British citizens, and so EU citizens, but who can’t vote in EU elections; the Netherlands Antilles… oh, the list goes on.

But let’s keep it simple, and just look at the bits that are absolutely, positively part of the EU: the seven official “outermost regions”, plus Ceuta and Melilla.
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More Bigtime Divergence

As people may have noted, last weekend Tobias and I were in Stockholm. One of the topics I wanted to post on but couldn’t was the latest Human Development report from the UN. There was plenty of press coverage: here, here, and here

There was even coverage in the blogs, but the tone seemed to be set by Slugger O’Toole who seemed mainly to take issue with Ireland’s rating in the HDI.

Personally I think the issues involved are much bigger than this.
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A modest proposal for CAP reform

I’ve been in Canada for the last month, getting in my last family visit before settling in to the serious business of either going back to school or collecting unemployment checks. My family is large – Great-Grandpa had 25 children, and Grandpa had 9 – so it takes a while if you go to see my family. Ours is a large, disorganised, occasionally frightening clan who, depending on pure whim, identifies itself as either German-Canadian, Dutch-Canadian, Russian-Canadian or Ukrainian-Canadian. Our tribal language is an obscure dialect of Low Saxon (Platt for the actual Germans out there) spoken primarily in Paraguay, Mexico, Central America and Saskatchewan, and whose most famous speaker is, arguably, Homer Simpson. It’s a long story, don’t ask. It not being much of a literary language, we all just say our ancestors spoke German – the liturgical language of my clan’s particular sect.

In contrast to Europe and the US, Canadians are a lot less disturbed about asking people about their ethnic identities or expressing some loyalty to them. I guess the main reason is that Canada has never really pretended to be a nation built atop an identity, but rather a place where an identity of sorts has slowly built up from the existence of a nation. There is no Canadian myth of the melting pot, and as our soon-to-be new Governor General has demonstrated, no serious demand for nativism in public office. Michaëlle Jean, who is slated to be the powerless and unelected Canadian head-of-state when the Queen is out of the country – e.g., practically always – when she is sworn in on the 27th, is no doubt the most attractive candidate we’ve ever had for the office. And, like her predecessor, she is a former CBC/SRC reporter and talking head.

Ms Jean and I share an endemically Canadian charateristic: We both can and do identify ourselves shamelessly as several different kinds of hyphenated Canadians. She is French Canadian, but that’s hardly strange. She is also Franco-Canadian – Ms Jean has dual citizenship with France, making her the first EU citizen to be Governor General of Canada and the first French citizen to be acting head of state of Canada since 1763. But more unprecedentedly, she is Haitian-Canadian and – as logically follows – African-Canadian.

Yes, Ms Jean is black, and furthermore in an interracial marriage. Well, that’s Canada for you. America puts black folk in squalid emergency shelters, we put ours in Rideau Hall.
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