The World in Words
The End of Population Growth
Sanjeev Sanyal
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NEW DELHI – According to the United Nations’ Population Division, the world’s human population hit seven billion on October 31. As always happens whenever we approach such a milestone, this one has produced a spike in conferences, seminars, and learned articles, including the usual dire Malthusian predictions. After all, the UN forecasts that world population will rise to 9.3 billion in 2050 and surpass 10 billion by the end of this century.
Such forecasts, however, misrepresent underlying demographic dynamics. The future we face is not one of too much population growth, but too little.
Most countries conducted their national population census last year, and the data suggest that fertility rates are plunging in most of them. Birth rates have been low in developed countries for some time, but now they are falling rapidly in the majority of developing countries. Chinese, Russians, and Brazilians are no longer replacing themselves, while Indians are having far fewer children. Indeed, global fertility will fall to the replacement rate in a little more than a decade. Population may keep growing until mid-century, owing to rising longevity, but, reproductively speaking, our species should no longer be expanding.
What demographers call the Total Fertility Rate is the average number of live births per woman over her lifetime. In the long run, a population is said to be stable if the TFR is at the replacement rate, which is a little above 2.3 for the world as a whole, and somewhat lower, at 2.1, for developed countries, reflecting their lower infant-mortality rates.
The TFR for most developed countries now stands well below replacement levels. The OECD average is at around 1.74, but some countries, including Germany and Japan, produce less than 1.4 children per woman. However, the biggest TFR declines in recent years have been in developing countries. The TFR in China and India was 6.1 and 5.9, respectively, in 1950. It now stands at 1.8 in China, owing to the authorities’ aggressive one-child policy, while rapid urbanization and changing social attitudes have brought down India’s TFR to 2.6.
An additional factor could depress future birth rates in China and India. The Chinese census suggests that there are 118.6 boys being born for every 100 girls. Similarly, India has a gender ratio at birth of around 110 boys for every 100 girls, with large regional variations. Compare this to the natural ratio of 105 boys per 100 girls. The deviation is usually attributed to a cultural preference for boys, which will take an additional toll on both populations, as the future scarcity of women implies that both countries’ effective reproductive capacity is below what is suggested by the unadjusted TFR.
Indeed, after adjusting for the gender imbalance, China’s Effective Fertility Rate (EFR) is around 1.5, and India’s is 2.45. In other words, the Chinese are very far from replacing themselves, and the Indians are only slightly above the replacement rate. The EFR stands at around 2.4 for the world as a whole, barely above the replacement rate. Current trends suggest that the human race will no longer be replacing itself by the early 2020’s. Population growth after this will be mostly caused by people living longer, a factor that will diminish in significance from mid-century.
These shifts have important implications for global labor supply. China is aging very rapidly, and its working-age population will begin to shrink within a few years. Relaxing the one-child policy might have some positive impact in the very long run, but China is already past the tipping point, pushed there by the combined effect of gender imbalance and a very skewed age structure.
The number of women of child-bearing age (15-49 years) in China will drop 8% between 2010 and 2020, another 10% in the 2020’s and, if not corrected, at an even faster pace thereafter. Thus, China will have to withdraw an increasing proportion of its female workforce and deploy it for reproduction and childcare. Even if China can engineer this, it implies an immediate outflow from the workforce, with the benefits lagging by 25 years.
Meanwhile, the labor force has peaked or is close to peaking in most major economies. Germany, Japan, and Russia already have declining workforces. The United States is one of a handful of advanced countries with a growing workforce, owing to its relative openness to immigration. But this may change as the source countries become richer and undergo rapid declines in birth rates. Thus, many developed countries will have to consider how to keep people working productively well into their seventies.
India, the only large economy whose workforce will grow in sufficient scale over the next three decades, may partly balance the declines expected in other major economies. But, with birth rates declining there, too, current trends suggest that its population will probably stabilize at 1.55 billion in the early 2050’s, a full decade ahead of – and 170 million people below – the UN’s forecast.
Given this, it is likely that world population will peak at nine billion in the 2050’s, a half-century sooner than generally anticipated, followed by a sharp decline. One could argue that this is a good thing, in view of the planet’s limited carrying capacity. But, when demographic dynamics turn, the world will have to confront a different set of problems.
Sanjeev Sanyal is Deutsche Bank’s Global Strategist.
Copyright: Project Syndicate, 2011.
www.project-syndicate.org
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Alternative 07:08 30 Oct 11
No growth poses problems. Growth poses even more problems (as any Ponzi scheme). The author is using good "statistical" arguments, as others already have done, to discuss the numbers published by the UN forecasters. So what's new in this article ? In the last 10 years India's population grew by a staggering 182 mio. That is frightening. Even if it stops at 1.55 billion it will turn life in India for many into a nightmare.
anmason 10:01 30 Oct 11
I agree with keeping the implications of capping the world population at 9bn in perspective. There will be social and economical impactis if the workforce can not expand fast enogh. However, we must find a way to mitigate these issues taking the population cap as a must; we just cant afford to keep adding people to an already strained planet. We should start planning for sound plans that can take us to or below the 9bn mark, without missing other key issues.
Zsolt 10:19 30 Oct 11
We have only one problem, although it is a big one.
For a while now we have been considering ourselves above the system of nature, as if we were completely independent and we could do whatever we want.
Recent events, like the natural catastrophes that are unusual in our lifetime considering their magnitude, and especially the collapse of most human built systems (economics, politics, culture, education, science, and so on) indicates that we actually do not have much idea about the system we exist in, and what our role is in this system.
The extreme variations of population growth or population numbers are just signs of our inbalance with the natural system around us, with our unnatural, overcunsuming, expansive, unbalanced lifestyle we created a bubble around us that seemingly disconnected us from the natural homeostasis other species keep around themselves, regulating their numbers, and lifstyles in accordance with nature.
Through many factors, including the population growth we have pulled the previously "loose" system around us closer, we have become very tightly interconnected with each other and the whole environment around us into a closed integral system.
Within this tight interdependent network today we are going directly against nature and as every living system thrives for balance and harmony we are in danger of being rejected out of the system.
It will take a while until we start accepting the fact that from the system's point of view we are just another species among the others despite our sophistication, and we also have to adapt to the system as any other creature or species if we want to survive.
As soon as we aligned ourselves with the laws of nature we would find that all our problems would almost automatically solve themselves, including the human population which would adjust in number and composition to how it should be naturally.
We are still the most evolved creature on this planet, and this higher level of development makes us capable of accepting our role within the system consciously, after examining the details, and the laws around us. While other animals do it instinctively we can do it in full awareness, as active partners within the system.
tcbaron 12:14 31 Oct 11
When economists discuss the issue of overpopulation they always like to make the same points about the problems of a declining workforce and the issues that will create. However they always seem to forget two points. With a smaller global population global production is going to fall. This is not a problem as long as production per person remains the same, or, as is more likely to happen due to high levels of hunger and poverty, to increase as the decrease in population size will likely be greater than the decrease in production (due to ever increasingly efficient farming and production techniques). The second points is that with high level of unemployment throughout the world, a decreasing workforce will mostly reduce the levels of unemployed workers, again reducing global poverty and hunger.
acardin 12:37 31 Oct 11
I think that this decrease of the population growth rate will act as an incentive regarding a rise in productivity growth. John Hicks (1932) described this mechanism in his book “The Theory of Wages”:
“A change in the relative prices of the factors of production is itself a spur to invention, and to invention of a particular kind - directed to economizing the use of a factor which has become relatively expensive..." (Hicks (1932), p. 124)”
Having a decrease of the factor labor will trigger this mechanisms at the long run. I have also also developed some thoughts about this issue. The change in the relative prices of the factors of productions not only generates an incentive for the companies to invest in measures that rise the productivity of the sector that is now relative expensive and its input scarcer, but also should generate an incentive for the individuals to invest in human capital, if the wages increase in a certain sector. Therefore, my view regarding this subject is rather positive, taking into account that this would mean a sustainable wealth increase in several developing economies.
Pmcdonald 03:59 31 Oct 11
This article is embarrasing. Narrow technical analysis has produced a technical root cause to a problem. How to grow the workforce. Ermmmmm we need to grow the population. What a muppet. Can economists please get cross trained in sociology and political science so that they can understand the implications of their analysis. "Errm my model says we need 20 billion people sir. I am a know-nothing muppet."
Mawali 04:29 31 Oct 11
While, the facts of low fertitlity rates amongst the developed World including China remains a cause for concern from a strategic aspect in social and economic terms. I am not convinced that populaton growth is not a problem in relation to the availability of resources, resource building and capacitiy.
The ethnic, social imbalance of the fertiltiy rates will present yet another paradigm borne out of populations shifts resulting in a lethal brew of cultures and religious mix. The old World order will decline, giving rise to a new World order the dynamics of which here and now only seem at least uncertain and at worst chaoctic to put it mildly.
Morwalk 09:56 31 Oct 11
The end of population growth is a good thing. One of the most fundamental rules in ecology is called carrying capacity. The definition of the term, basically, is that there is a maximum number of individuals within a species that can be sustained by a finite space. Earth is a finite space, but the human population has been able to artificially extend beyond its carrying capacity because of advances in technology. This has been at the expense of our own and other species.
If we don't become more conscious of the effects human population has on the planet, economics will be secondary to environmental degradation and lack of resources. I especially hope the United States, my country, the country that consumes 25% of fossil fuels, comes to understand the negative effects of human overpopulation. It is always surprising to me when parents say they are ecologists but have added four or five more humans to the planet. They obviously don't know or understand the rule of carrying capacity.
Tony 10:34 04 Nov 11
For people to supply labour, he/she needs to consume food, energy, housing, etc. Is it worth?
For people to offer ingenuity (e.g. for us to spread out of the Earth) requires education. Education needs energy investment, limited new births can be supported.
Share vision, get committed, improve ourselves.
Tony
http://think4sustain.wordpress.com
RameshKumarNanjundaiya 04:36 07 Nov 11
YET ANOTHER VIEW - on the Current sate of the Indian Economy 2011
Oct 8th 2011 4:45 GMT
What is the current state of the Indian Economy - The Indian Paradox 2011
QUOTE
India’s economic growth rate in the past decade has been nothing short of spectacular. With its GDP growth around 7 to 9 percent per year, India is the second-fastest-growing large economy in the world. However, the country’s manufacturing sector accounts for a dismal 17 percent of its employment opportunities, as compared to 60 percent in agriculture and 23 percent in services.[1]This summer, the World Bank’s Indian Visiting Scholars Program* invited two leading academics from Harvard University to visit India and to articulate potential pathways to sustain the country’s growth trajectory. These 2 scholars are Ricardo Hausmann, Professor of Economic Development at the John F. Kennedy School of Government and Director of Harvard’s Center of International Development and Dani Rodrik, Professor of International Political Economy at the Kennedy School. While there, they interacted with the private sector and key policymakers, including senior officials of the Department of Industrial Policy and Promotion, the Planning Commission, and the Ministry of Finance. Hausmann argues that diversification in the economic structure, and not necessarily specialization, may be a crucial factor for accelerating growth in India.
UNQUOTE
My response
What is the current state of the Indian Economy and where is it headed – While I fully understand and appreciate Hausmann’s views that diversification in the economic structure, and not necessarily specialization, may be a crucial factor for accelerating growth in India, his observation that rich economies produce many products whereas developing economies produce few products that are also made in rich economies calls for a discussion. It is true, that this relationship exists not only between countries, but also between cities within a country. What is therefore the secret of India’s economic growth rate in the past decade which has been nothing short of spectacular? With its GDP growth around 7 to 9 percent per year, India is the second-fastest-growing large economy in the world. Who is the driver for this. Before we answer this, one needs to revisit the American Economic Historian W.W. Rostow who in the sixties had suggested that countries passed through 5 stages of economic development as Traditional Society, Transitional Stage, Take-off, Drive to Maturity and High Mass Consumption., Would this today apply to India. Many development economists argue that Rostows's model was developed with Western cultures in mind and not applicable to developing countries as India as it is generalised and policy makers are unable to identify the various stages as they seem to overlap each other. It depends how you look at it. It is a growth model and we should examine if there is actual all round development to witness the 9% GDP growth. One of the contributors for this is the growing “Indian Middle Class”. While the reasons are varied, but one which has really propelled up the Indian economy ( I would say, in the last 6 years) is the growing buying power of people in the so called "Middle Income Group" which in the case of India, per my estimation, represents almost 300 million people. This is a huge market to cater to and is growing. This group is the one which is pushing demand locally and thus giving a boast to the economy. It is a life cycle change in the population group. This is the group which is spending on all goods and related services. Because of such a growth demand for goods/services, banks will certainly witness increase in their lending in the next couple of years. This fuels continuous economic growth (notwithstanding inflation) The rosy side is that when the economy grows, the equity markets become much more active and again adds for the economy growth with more people coming into the "Middle Income Group of People" or the people with buying power or cash to spend. Thus going back to W.W. Rostow, we are somewhere in between stage 3 and 4. But at this stage, one needs to be very careful. While India seems to be embarking on a high-growth strategy today, it must guard and overcome some global trends which include global warming, the falling relative price of manufactured goods and rising relative price of commodities, including energy; swelling discontent with globalization in advanced and some developing economies, the various ongoing “scams” which could eat upto 2% of the GDP, the growing “young population” which should not become a struggle (almost 400 million in the age group of 15 to 30 years) to cope with and the ongoing mismatch between global problems—in economics, health, climate change, and other areas—and weakly coordinated international responses. Notwithstanding the challenges, the support of the global economy remains central for the current Indian growth story or as they call it the - The India Paradox: Promoting Competitive Industries in a High-Growth Country.
RAMESH KUMAR NANJUNDAIYA
ktalu 06:40 08 Nov 11
When we became independent in 1971, Bangladesh had a population of 75 million and everyone predicted that this "basket case" would starve and die. Now that our population is 150 million with a population density of 1,000 per square kilometer, the poverty rate keeps falling (50% in 2000, 40% in 2005 and 31% in 2010) and the women (and no doubt the men too - except no survey currently monitors the less "vulnerable" males in this enlightened land of gender equality) keep getting fatter (7% in 1996 and 15% in 2004). Unfortunately almost all Bangladesh policy makers, like all previous commentators of this thought provoking piece by Sanjeev Sanyal, believe we need to do even more to curtail population growth. And they churn out the usual rubbish about how unhappy the place is getting because there are too many people. They've all been brainwashed by the past century of western propaganda about over-population. Now that the "west" (which now also includes the "east" - Singapore, Japan etc.) has set itself on an irreversible course to self annhilation, it is definitely time to reject population control as a meaningful policy for humanity.
Good piece Dr. Sanyal. Looking forward to more on this important theme.
mP1 03:35 15 Nov 11
This article is an embarrassment, it seems to be filled with thoughts that are completely ignorant of the real world. The world does not need more people - i case you havent noticed the world is dying, we are killing everything that moves chasing some imaginery thing called money. Most the countries that are overpopulating are the same ones that require help from outside to feed their hungry. Take a look at history population without education does not improve a country that mentality should die with other feeble toughts of our past ancestors like religion and belief in ghosts.
Anumakonda 07:00 22 Nov 11
I entirely agree with you Sanjeev Sanyal.
Dr.A.Jagadeesh Nellore(AP),India
scrutonizer 01:21 26 Nov 11
The world would be well off with a poulation of around 1 or 2 billion people with more sustainable lifestyles in the developed world and better quality of life in the developing world. Education and employment for women as well as men is key to this. The developed world could be more helpful with policies aimed towards this end.
reddog 03:55 29 Dec 11
The future appropriate mix of service-manufacturing for a re-cycled Earth, I'm thinking is about 60-40. With 40% of the population engaged in re-making-re-cycling our goods -food, shelter, clothing- while 60% provide our services -security, entertainment, information.This relationship I think could be supported on a "Sustainable Earth".
Although this is not an idea either generated anywhere nor is it an intuitive concept, it's the only one that can be derived from the stuff and tools we have at hand.
It's beginning to look like it's the one we are going to muddle into.
BartekBartek 06:31 30 Oct 11
You are right in pointing to the rather short- and middle-run problem of a changing workforce structure. It brings a lot of challenges with it. However, if one takes a somewhat broader picture (as suggested by you in the last passage, but, on the other hand, dismissed in the first as "the usual dire Malthusian predictions"), there is no way out. We've put the Earth's carrying capacity to its limits and this must be corrected - otherwise the consequences may be really dire. This is somewhat similar to the (causally related) climate change problem: certainly it will cost a lot to tackle it. But we cannot afford not to do it.