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I was just emailing a few folks in the insurance industry about demographic decline. I can't find any good economic analyses on what will likely happen to our e

by cl42 2y ago

I was just emailing a few folks in the insurance industry about demographic decline. I can't find any good economic analyses on what will likely happen to our economies when populations start to decline. This will happen given the projections and the fact that we can't force people to have babies 2, 3, 4, 5 years ago. Has anyone come across anything good that isn't a 'popular press' book? I'm looking for deep analysis.

bryanlarsen 2y ago
Japan's population has been declining for ~15 years. It's hard to disentangle from the aftermath of their bubble collapse in 1991, but it does appear that while demographic collapse isn't great for an economy, it's also not the doomsday that many predict.
- lotsofpulp 2y ago
  It’s not the first derivative that is usually a problem, it’s the second derivative. The rate of decline is important to monitor for the purposes of managing expectations of supply and demand in the markets.
- edmundsauto 2y ago
  It’s also a decent indicator whether the economy is working well for the people. I think too often the tail wags the dog.
- cl42 2y ago
  Do you think it's different when global growth declines, or when there's a large group of countries going throughs population stagnation or decline? One can say that Japan's economy was still buoyed by global population growth, export growth, etc.
- tuatoru 2y ago
  In demographics the units of time are generations. It takes several of them for the effects of shock to be fully felt because generations overlap, about a century. Japan's TFR fell below replacement around 1973, iirc. So we should wait at least till 2070 before making assertions about the severity or otherwise of the issue. In the mean time, it sure looks serious. Japan has been propping up its economy with debt. It has the highest public debt to GDP ratio in the world. Is that sustainable if interest rates climb? I don't know.
deleted 2y ago
[deleted]
JamesLeonis 2y ago
This might be difficult to come by. It was only recently the zeitgeist shifted from Overpopulation to Underpopulation. As another commenter mentioned, Japan is an example of a possible future for many advanced economies. https://www.cambridge.org/core/journals/japanese-journal-of-political-science/article/japan-the-harbinger-state/2A9123B64A04C480B1BC5669FC2C8AF3 https://www.cambridge.org/core/journals/japanese-journal-of-... previous discussion: https://news.ycombinator.com/item?id=34486824 https://news.ycombinator.com/item?id=34486824
- toomuchtodo 2y ago
  Which is strange, because population momentum is still pushing us towards a much higher global total population number by end of century. What are potential reasons for the change in narrative from the media, as well as economic and political interests?
  - Balero 2y ago
    The global population may be growing, but for developed countries where we get most of our news (I assume, at least I do), they're just starting to tip over into the shrinkage and dealing with the bulge of elderly people. The narrative is right for the political and economic interests that we hear from. I imagine if we were consuming news from India, Egypt or Nigeria it would be a very different story.
  - somenameforme 2y ago
    The good faith answer is that they believed their own projections. This article mentions that the UN projections just somehow assumed everybody's fertility rates would decline and then kick into a mediocre but closer to sustainable level for a slow bleed. This topic has been a pet obsession of mine for years now because these data made no sense. Why would everybody's fertility rates suddenly trend to 1.69, as per the article's numbers? The more logical path has always seemed an ongoing extrapolation of current trends, and that leads to quite terrifying outcomes on very short timeframes. And as more people seem to realize that's where we're indeed headed, it's long since past time for a sharp 180 on this topic. On top of incorrect projections, I also think most don't understand the math of how fertility rates affect populations. It's an exponential system, so extreme outcomes are entirely possible with rates that seem 'bad' but not that bad, like e.g. a fertility rate of 1. Such a fertility rate, if shared among an entire population, would result in an exponential 50% decline in your population per 20 years. And alongside that you get social chaos, screwed up age ratios, economic chaos, and more. All on an extremely rapid timeframe. I think this is a self correcting problem, but it's likely far wiser to fix it before it starts fixing itself.
tuatoru 2y ago
The primary reason that deep analysis is close to non-existent is that fertility is coded as a right-wing issue, and discussing the decline is unacceptable in today's academic social sciences. "You want to force women to be baby-making machines", and more vitriolic rhetoric, and loss of tenure, is what happens when someone raises the issue. I think of this as one of Iain Banks's "Outside Context Problems", something that our society cannot (allow itself to) understand or even see, so it cannot begin to solve it.
- jiggawatts 2y ago
  I’m very left-leaning and so is almost everyone I know, but we’re aware of the problem and concerned about the implications. The right wing so far hasn’t provided any solutions. I have one child. I would prefer to have two, but I can’t afford it. For reference: my income is in the top 2% for my country and the top 5% in the affluent part of the largest city. I literally cannot afford to buy a house big enough for a growing family unless my partner also works full time. That’s nuts.
  - nojvek 2y ago
    Seems about right for most OECD countries. To have kids you need a large enough house and ample financial security / schools / daycare etc. Doesn’t make sense to have kids when both parents have to work full time to barely make it.
  - tuatoru 2y ago
    No one has any solutions. The solution is to make parenthood high prestige, higher than doctor or lawyer or CEO or rapper or billionaire. Then everyone will want to do it. A pity that despite a hundred years of marketing we are clueless about how to do that. There are 'hygiene' actions like getting rid of credentialism, so lowering the perceived-to-be-required investment in each child, and decreasing density (which inversely correlates with number of children independently of other factors, and giving people an optimistic life plan and expectation, and changing marriage/partnering back from being a capstone (something you do once you are established) to being a cornerstone (something you do at the start of adulthood, to build your lives on). But ultimately it's about the social prestige. Try saying "she's a soccer mom" in tones of awe and respect, out in public, and watch the funny looks you get.
Supermancho 2y ago
(Almost) no country is going to leave a terminal decline unchallenged. In North Dakota, new single moms can qualify for a large number of assistance (https://singlemothersgrants.org/single-mothers-assistance-in-north-dakota/ https://singlemothersgrants.org/single-mothers-assistance-in...). Imagine this for any new mom, per child. Once the economics of incentivized population growth kicks in, I think there will be rapid change. Can it be sustained? Probably not, but that's an easier problem...ie Repeat programs every X years.
- lotsofpulp 2y ago
  No country has successfully increased fertility rates, so there are no known figures on the economics of incentives sufficient to increase fertility rates.
  - Supermancho 2y ago
    > No country has successfully increased fertility rates, What's your point? Ostensibly, modern countries have not yet suffered the predicted population crash that might incentivize more aggressive baby bonuses (https://en.wikipedia.org/wiki/Baby_bonus https://en.wikipedia.org/wiki/Baby_bonus). This has been a thing for awhile (https://www.npr.org/sections/money/2011/11/03/141943008/when-governments-pay-people-to-have-babies https://www.npr.org/sections/money/2011/11/03/141943008/when...). It's a likely strategy to be extensively employed in the future, if the trends are realized. It's reasonable to expect there is an economic inflection point, where the program(s) would be successful.
    - lotsofpulp 2y ago
      Paying women to have babies does not incentivize what a society wants, which is kids who are properly raised and contribute to society. That requires many years of effort, something I don’t think that can be incentivized by a cash gift or tax credit. The only economic incentivize I can think of that might work is to remove all old age benefits and require people to depend on descendants, but that is not going to be politically palatable until there is no choice because the system fell apart.

by cl42 2y ago

bryanlarsen 2y ago

Japan's population has been declining for ~15 years. It's hard to disentangle from the aftermath of their bubble collapse in 1991, but it does appear that while demographic collapse isn't great for an economy, it's also not the doomsday that many predict.

lotsofpulp 2y ago
It’s not the first derivative that is usually a problem, it’s the second derivative. The rate of decline is important to monitor for the purposes of managing expectations of supply and demand in the markets.
edmundsauto 2y ago
It’s also a decent indicator whether the economy is working well for the people. I think too often the tail wags the dog.
cl42 2y ago
Do you think it's different when global growth declines, or when there's a large group of countries going throughs population stagnation or decline? One can say that Japan's economy was still buoyed by global population growth, export growth, etc.
tuatoru 2y ago
In demographics the units of time are generations. It takes several of them for the effects of shock to be fully felt because generations overlap, about a century. Japan's TFR fell below replacement around 1973, iirc. So we should wait at least till 2070 before making assertions about the severity or otherwise of the issue. In the mean time, it sure looks serious. Japan has been propping up its economy with debt. It has the highest public debt to GDP ratio in the world. Is that sustainable if interest rates climb? I don't know.

deleted 2y ago

[deleted]

JamesLeonis 2y ago

This might be difficult to come by. It was only recently the zeitgeist shifted from Overpopulation to Underpopulation. As another commenter mentioned, Japan is an example of a possible future for many advanced economies. https://www.cambridge.org/core/journals/japanese-journal-of-political-science/article/japan-the-harbinger-state/2A9123B64A04C480B1BC5669FC2C8AF3 https://www.cambridge.org/core/journals/japanese-journal-of-... previous discussion: https://news.ycombinator.com/item?id=34486824 https://news.ycombinator.com/item?id=34486824

toomuchtodo 2y ago
Which is strange, because population momentum is still pushing us towards a much higher global total population number by end of century. What are potential reasons for the change in narrative from the media, as well as economic and political interests?
- Balero 2y ago
  The global population may be growing, but for developed countries where we get most of our news (I assume, at least I do), they're just starting to tip over into the shrinkage and dealing with the bulge of elderly people. The narrative is right for the political and economic interests that we hear from. I imagine if we were consuming news from India, Egypt or Nigeria it would be a very different story.
- somenameforme 2y ago
  The good faith answer is that they believed their own projections. This article mentions that the UN projections just somehow assumed everybody's fertility rates would decline and then kick into a mediocre but closer to sustainable level for a slow bleed. This topic has been a pet obsession of mine for years now because these data made no sense. Why would everybody's fertility rates suddenly trend to 1.69, as per the article's numbers? The more logical path has always seemed an ongoing extrapolation of current trends, and that leads to quite terrifying outcomes on very short timeframes. And as more people seem to realize that's where we're indeed headed, it's long since past time for a sharp 180 on this topic. On top of incorrect projections, I also think most don't understand the math of how fertility rates affect populations. It's an exponential system, so extreme outcomes are entirely possible with rates that seem 'bad' but not that bad, like e.g. a fertility rate of 1. Such a fertility rate, if shared among an entire population, would result in an exponential 50% decline in your population per 20 years. And alongside that you get social chaos, screwed up age ratios, economic chaos, and more. All on an extremely rapid timeframe. I think this is a self correcting problem, but it's likely far wiser to fix it before it starts fixing itself.

tuatoru 2y ago

The primary reason that deep analysis is close to non-existent is that fertility is coded as a right-wing issue, and discussing the decline is unacceptable in today's academic social sciences. "You want to force women to be baby-making machines", and more vitriolic rhetoric, and loss of tenure, is what happens when someone raises the issue. I think of this as one of Iain Banks's "Outside Context Problems", something that our society cannot (allow itself to) understand or even see, so it cannot begin to solve it.

jiggawatts 2y ago
I’m very left-leaning and so is almost everyone I know, but we’re aware of the problem and concerned about the implications. The right wing so far hasn’t provided any solutions. I have one child. I would prefer to have two, but I can’t afford it. For reference: my income is in the top 2% for my country and the top 5% in the affluent part of the largest city. I literally cannot afford to buy a house big enough for a growing family unless my partner also works full time. That’s nuts.
- nojvek 2y ago
  Seems about right for most OECD countries. To have kids you need a large enough house and ample financial security / schools / daycare etc. Doesn’t make sense to have kids when both parents have to work full time to barely make it.
- tuatoru 2y ago
  No one has any solutions. The solution is to make parenthood high prestige, higher than doctor or lawyer or CEO or rapper or billionaire. Then everyone will want to do it. A pity that despite a hundred years of marketing we are clueless about how to do that. There are 'hygiene' actions like getting rid of credentialism, so lowering the perceived-to-be-required investment in each child, and decreasing density (which inversely correlates with number of children independently of other factors, and giving people an optimistic life plan and expectation, and changing marriage/partnering back from being a capstone (something you do once you are established) to being a cornerstone (something you do at the start of adulthood, to build your lives on). But ultimately it's about the social prestige. Try saying "she's a soccer mom" in tones of awe and respect, out in public, and watch the funny looks you get.

Supermancho 2y ago

(Almost) no country is going to leave a terminal decline unchallenged. In North Dakota, new single moms can qualify for a large number of assistance (https://singlemothersgrants.org/single-mothers-assistance-in-north-dakota/ https://singlemothersgrants.org/single-mothers-assistance-in...). Imagine this for any new mom, per child. Once the economics of incentivized population growth kicks in, I think there will be rapid change. Can it be sustained? Probably not, but that's an easier problem...ie Repeat programs every X years.

lotsofpulp 2y ago
No country has successfully increased fertility rates, so there are no known figures on the economics of incentives sufficient to increase fertility rates.
- Supermancho 2y ago
  > No country has successfully increased fertility rates, What's your point? Ostensibly, modern countries have not yet suffered the predicted population crash that might incentivize more aggressive baby bonuses (https://en.wikipedia.org/wiki/Baby_bonus https://en.wikipedia.org/wiki/Baby_bonus). This has been a thing for awhile (https://www.npr.org/sections/money/2011/11/03/141943008/when-governments-pay-people-to-have-babies https://www.npr.org/sections/money/2011/11/03/141943008/when...). It's a likely strategy to be extensively employed in the future, if the trends are realized. It's reasonable to expect there is an economic inflection point, where the program(s) would be successful.
  - lotsofpulp 2y ago
    Paying women to have babies does not incentivize what a society wants, which is kids who are properly raised and contribute to society. That requires many years of effort, something I don’t think that can be incentivized by a cash gift or tax credit. The only economic incentivize I can think of that might work is to remove all old age benefits and require people to depend on descendants, but that is not going to be politically palatable until there is no choice because the system fell apart.