China’s Accelerating Fertility Crisis
In 2016, the Chinese authorities finally abandoned the country’s one-child policy, which had caused the birth rate to plummet well below replacement level by the 1990s. So, why is the birth rate declining again?
Sex and the Chinese Economy
As the Chinese government has started to worry about the country’s low population growth, it has progressively relaxed its family-planning policy. Policymakers should now go further, and provide a significant financial reward to parents of baby girls.
NEW YORK – China’s recently released population census confirms the persistence of the country’s alarming excess of males relative to the global norm. This numerical imbalance from birth onward has several significant economic implications – and not only for China.
Because women live longer than men on average, most countries’ populations have more females than males. In the United States, for example, there were 96 males per 100 females in 2020. China, by contrast, has 105 males for every 100 females, according to the latest census. Chinese women live about three years longer than Chinese men on average, so the “excess males” are entirely the result of an unusually high ratio of boys to girls at birth.
The sex ratio at birth is normally around 106 boys per 100 girls. Because boys and young men have a slightly higher mortality rate, and because husbands tend to be somewhat older than wives, such a ratio at birth is nature’s way of ensuring a roughly 1:1 ratio by the time they reach reproductive age.
Although China’s male-to-female ratio at birth was close to this natural rate in the 1970s, a combination of factors fueled its steady rise. The most significant were a preference for sons, the availability of ultrasound and other technologies that enable expectant parents to know a fetus’s sex, and the government’s imposition in 1980 of a strict family-planning policy that prevented most families from having as many children as they desire.
Some parents have opted for sex-selective abortions. The government tried to forbid the practice, but it is hard to prevent as long as abortions are used as a means of complying with birth limits. As a result, the sex ratio at birth increased steadily, peaking at about 121 boys per 100 girls in 2009. According to the recent population census, this ratio has since declined to 111.3 boys for every 100 girls – more balanced than before, but still significantly higher than it would be in the absence of sex-selective abortions.
China’s “excess” of male births results in a large number of young men being unable to marry. In mathematical terms, about one in nine young men in China cannot find a girlfriend or wife. This problem is even more serious in regions such as rural Anhui and Guangdong, where as many as one in six young men has difficulty finding a marriage partner.
In a series of research papers with various co-authors, I have documented some of the large and sometimes surprising economic consequences of this skewed sex ratio for China and the world. For starters, young men – and especially parents with unmarried sons – increase their savings rates substantially in order to enhance their relative competitiveness in the dating and marriage markets. In a 2011 paper, Xiaobo Zhang and I found that the rise in the male-female ratio in China’s pre-marital-age cohort from 1990 to 2007 accounted for about half of the increase in the household savings rate during that period.
An increase in the savings rate tends to boost a country’s trade surplus. In 2013, Qingyuan Du and I showed that a rise in China’s male-female ratio may have contributed to between one-third and one-half of the increase in its trade surplus with other countries. The sex imbalance thus likely underpins an important source of tension between China and the US. Yet bilateral engagement has paid scant attention to this linkage.
As I show in a forthcoming research paper with Zhibo Tan and Xiaobo Zhang in the Journal of Development Economics, China’s unbalanced male-female ratio also contributes to unsafe workplace practices, leading to many preventable injuries and deaths. A shortage of potential brides causes many parents with sons of marriageable age to work more and seek higher-paying but potentially dangerous jobs in sectors such as mining and construction, or jobs exposing them to hazardous materials and extreme heat or cold. Because people are more willing to accept such jobs, employers often invest less in workplace safety, which in turn increases work-related injuries and mortality.
My co-authors and I found that accidental injuries and workplace deaths are significantly higher in areas with a more severe shortage of young women relative to men. And parents with sons of marriageable age account for a disproportionate share of the victims.
The sex-ratio imbalance can self-correct, but only slowly. Seeing parents with sons shouldering greater financial and physical burdens to help their sons avoid involuntary bachelorhood, many young couples may decide that having a daughter is as good or better. But the latest population census, which shows that the sex ratio at birth remains unbalanced, tells us that discrimination against girls persists.
As China worries about the country’s low population growth, it has progressively relaxed (but not yet ended) its family-planning policy. Policymakers should now go further, and provide a significant financial reward to parents of baby girls. Such a measure would simultaneously hasten the correction of the sex-ratio imbalance at birth and arrest the decline in the overall birth rate.
A more balanced sex ratio will lessen the need for many Chinese households to sacrifice current consumption for higher savings, and foster safer working environments. It would also help to reduce trade tensions with other countries.
China’s Three-Child Policy Won’t Help
Alarmed by new data showing that its fertility rate is now similar to that of aging Japan, China has announced that it will permit families to have up to three children. Yet without broader reforms to address high costs of living and rural-urban divides, the new policy could make a difficult problem worse.
IRVINE – In an effort to address rapid population aging, China has just announced that it will allow all families to have up to three children. The decision comes on the heels of widely publicized new data showing that the Chinese fertility rate in 2020 was only 1.3 per woman, which is similar to that of Japan (1.36 in 2019) and notably lower than that of the United States (1.7).
But a below-replacement fertility rate is only one part of China’s demographic problem. A second issue is the sheer size of its older population. Before 1971, Chinese family-planning policies were pro-natal, restricting access to contraceptives and family-planning education. As a result, the country’s current or soon-to-be elderly population has grown particularly large: the size of the population aged 15-24 is only around 72% that of those aged 45-54, compared to 79% in Japan and 100% in the US. This top-heavy demographic structure makes the problem of declining fertility even more acute, because new, younger workers are needed to replace those who will retire and require support.
A third issue is urban-rural inequality. China’s rural population is generally prohibited from moving to urban areas by the country’s hukou system of residency permits. Rural residents thus have had fewer opportunities to access education and health care. In 2010-12, the urban enrollment rate was 100% for middle school, 63% for high school, and 54% for university; in rural areas, it was 70%, 3%, and 2%, respectively.
Likewise, urban areas had 2.68 doctors per 1,000 people in 2008, compared to just 1.26 per 1,000 people in rural areas. Not surprisingly, rural areas suffer worse health outcomes, with lower life expectancy and higher morbidity rates than in urban areas.
Chinese policymakers tend to discuss each of these issues separately. But that is a mistake. Low fertility, the legacy of pro-natal policies, and rural-urban divides all affect a population-age structure that has a direct bearing on China’s long-run economic development.
Economic growth depends heavily on the quality of the labor force. If workers cannot access health care or acquire skills in school or on the job, the economy will suffer. Worldwide, differences in worker quality can explain around half of all cross-country differences in income and growth.
Telling Chinese couples that they may have three children will not automatically increase the fertility rate, nor will it necessarily help with the larger economic challenge. Fertility is determined by socioeconomic factors such as the cost of raising children and the economic opportunities that parents foresee for their offspring. Those costs are extraordinarily high in urban China, where residential real estate is more expensive than in any other country at a similar income level.
Moreover, academic competition is intense. Children and their parents begin feeling the pressure of the nationwide gaokao exam for university admission in primary school. A 1999 reform that expanded the number of university slots could have partly relieved this pressure, except that job growth has not kept up; unemployment rates for college graduates have duly increased.
Urban parents also face the burden of caring for their own aging parents. This is no small task in a country where pensions are limited, and where few people move to retirement communities later in life. Most aging Chinese expect their adult children to care for them. And because the one-child policy in place from 1979 to 2016 was enforced more strictly in urban areas, most young urban parents grew up as only children. With no siblings to share the load, couples can expect to spend the next one or two decades caring for four aging parents in addition to rearing their own child. Adding two more children would increase the average couple’s dependents from five to seven.
By contrast, fertility is higher in rural areas, and the cost of rearing children is lower. Housing is cheaper, and the fact that there are fewer schooling opportunities means that parents can worry less about the costs of education. Rural Chinese of childbearing age are much more likely to have siblings with whom they can work together in caring for elderly parents.
Under these circumstances, allowing families to have three children without also making other changes would likely not achieve the intended economic result, and could even make things worse. With the urban population unlikely to have many more children unless the financial burdens of child-rearing and elder care are reduced, it is only rural fertility that will increase. And without improvements in rural health and education, the size and share of the unskilled working population will grow.
A labor force with a growing share of unskilled workers is the last thing China needs as it strives to push the frontiers of technological innovation and advance beyond middle-income status. While improving schools and public health in rural areas is straightforward (albeit expensive), generating employment for the graduates will be much more difficult. And without employment, young people will not be able to help support the aging population.
Chinese policymakers have shown awareness of some of these issues. In addition to increasing the fertility limit, they have acknowledged the need to reduce housing costs and to provide education subsidies. But these proposals remain vague, because there really are no simple solutions. Chinese policymakers will need to be mindful of the economic ramifications of the country’s demographic trends in tandem with its rural-urban divide – and take care to avoid making a difficult problem worse.
The Upside of Population Decline
A pervasive conventional bias assumes that population decline must be a bad thing. But in a world where technology enables us to automate ever more jobs, the far bigger problem is too many potential workers, not too few.
LONDON – China’s recently published census, showing that its population has almost stopped growing, brought warnings of severe problems for the country. “Such numbers make grim reading for the party,” reported The Economist. This “could have a disastrous impact on the country,” wrote Huang Wenzheng, a fellow at the Center for China and Globalization in Beijing, in the Financial Times.
But a comment posted on China’s Weibo was more insightful. “The declining fertility rate actually reflects the progress in the thinking of Chinese people – women are no longer a fertility tool.”
China’s fertility rate of 1.3 children per woman in 2020 is well below replacement level, but so, too, are fertility rates in every rich country. Australia’s rate is 1.66, the US rate is 1.64, and in Canada it is 1.47. In all developed economies, fertility rates fell below replacement in the 1970s or 1980s and have stayed there ever since.
When the US rate returned to just above two from 1990 to 2005, some commentators hailed America’s greater dynamism and “social confidence” versus “old Europe.” In fact, the increase was entirely due to immigration, with Hispanic immigrants initially maintaining the higher fertility rates of their less successful countries of origin. Since 2000, the US Hispanic fertility rate has fallen from 2.73 to 1.9, while rates for white people have been well below 2.0 since the 1970s and for black people since around 2000.
Only in poorer countries, concentrated in Africa and the Middle East, are much higher birth rates still observed. In India, all the more prosperous states – such as Maharashtra and Karnataka – have fertility rates below replacement level, with only the poorer states of Bihar and Uttar Pradesh still well above. And while the national rate in 2018 was still 2.2, the Indian National Family Health Survey finds that Indian women would like to have, on average, 1.8 children.
A half-century of evidence suggests that in all prosperous countries where women are well educated and free to choose whether and when to have children, fertility rates fall significantly below replacement levels. If those conditions spread across the world, the global population will eventually decline.
A pervasive conventional bias assumes that population decline must be a bad thing. “China’s falling birth rate threatens economic growth,” opined the Financial Times, while several comments in the Indian press noted approvingly that India’s population would soon overtake China’s. But while absolute economic growth is bound to fall as populations stabilize and then decline, it is income per capita which matters for prosperity and economic opportunity. And if educated women are unwilling to produce babies to make economic nationalists feel good, that is a highly desirable development.
Meanwhile, arguments that stable or falling populations threaten per capita growth are hugely overstated and, in some cases, plain wrong.
True, when populations no longer grow, there are fewer workers per retiree, and health-care costs rise as a percent of GDP. But that is offset by the reduced need for infrastructure and housing investment to support a growing population. China currently invests 25% of GDP each year on pouring concrete to build apartment blocks, roads, and other urban infrastructure, some of which will be of no value as the population declines. By cutting that waste and spending more on health care and high technology, it can continue to flourish economically as the population declines.
Meanwhile, a stable and eventually falling global population would make it easier to cut greenhouse-gas emissions to avoid climate change, and alleviate the pressure that growing populations inevitably place on biodiversity and fragile ecosystems. And contracting workforces create stronger incentives for businesses to automate, while driving up real wages, which, unlike absolute economic growth, are what really matter to ordinary citizens.
In a world where technology enables us to automate ever more jobs, the far bigger problem is too many potential workers, not too few. China’s population aged 20 to 64 will likely fall by around 20% in the next 30 years, but productivity growth will continue to deliver rising prosperity. India’s population in that age band is currently growing by around ten million per year and will not stabilize until 2050.
But even when the Indian economy grows rapidly, as it did before the COVID-19 crisis, its highly productive “organized sector” of about 80 million workers – those working for registered companies and government bodies on formal contracts – fails to create additional jobs. Growth in the potential workforce simply swells the huge “informal sector” army of unemployed and underemployed people.
True, fertility rates far below replacement level create significant challenges, and China may well be heading in that direction. Many people expected that after the one-child policy was abolished in 2015, China’s fertility rate – then around 1.65 – might increase. But a look at the freely chosen birth rates of ethnic Chinese living in successful economies such as Taiwan (1.07) and Singapore (1.1) always made that doubtful. Other East Asian countries such as Japan (1.38) and Korea (1.09) have similarly low fertility.
At those rates, population decline will be precipitate rather than gradual. If Korea’s birth rate does not rise, its population could fall from 51 million today to 27 million by 2100, and the ratio of retirees to workers will reach levels that no amount of automation can offset.
Moreover, some surveys suggest that many families in low-fertility countries would like to have more children but are discouraged by high property prices, inaccessible childcare, and other obstacles to combining work and family life. Policymakers should therefore seek to make it as easy as possible for couples to have the number of children they ideally want. But the likely result will be average fertility rates well below replacement level in all developed countries, and, over time, gradually falling populations. The sooner that is true worldwide, the better for everyone.
The World and the UN Must Reduce Population Growth
The United Nations' 17 Sustainable Development Goals imply that there is no longer any need to reduce global population growth, even though it is a serious problem that undermines most of the SDG targets. By adding a further SDG aimed at slowing the increase in population, the world could yet save the UN’s 2030 Agenda.
GOTHENBURG/LONDON – On September 24-25, world leaders will gather at the United Nations in New York to review progress toward the UN’s 2030 Agenda and its 17 Sustainable Development Goals. The SDGs, which aim “to end poverty, protect the planet, and ensure prosperity for all,” are commendable, and summarize the kind of world many of us wish to see in 2030. But if this vision is to have any chance of materializing, governments must now add an 18th goal: “Dampen population growth.”
The challenges that humanity faces today stem mainly from overconsumption and overpopulation. Yet policymakers often fail to consider the two factors together, and largely neglect population growth in particular.
The overall human impact on the global environment is the product of population size and average per capita consumption. The UN’s Intergovernmental Panel on Climate Change has concluded that population growth and economic (consumption) growth are the two main causes of global warming. Per capita resource consumption and greenhouse-gas emissions are highest in developed economies, while rapid population growth in developing countries contributes to the loss of forests and biodiversity.
When governments adopted the SDGs in 2015, many experts were surprised by the lack of attention to population growth. Demographer Joseph Chamie, a former director of the UN Population Division, expressed concern that the UN was ignoring the issue. University of Cambridge economist Partha Dasgupta and co-authors concurred, arguing that this omission “should be a point of public concern.” More recently, demographer Massimo Livi Bacci of the University of Florence wrote that “population … has become irrelevant for the sustainability of development, notwithstanding the evidence to the contrary.”
Between 1960 and 2000, the world’s population doubled from three billion to six billion. This growth contributed to greater pollution of land, lakes, rivers, and oceans, as well as urban overcrowding and a higher demand for agricultural land and freshwater (in turn encroaching on natural ecosystems). Despite significant technical advances in agriculture, famines killed millions of people over this 40-year period. And in developing countries, rapid population growth left poor people at greater risk of death, injury, and disease resulting from pollution, floods, droughts, and other disasters.
There are now 7.7 billion people on Earth. The UN forecasts that this figure will rise to 11 billion by 2100 (and that assumes steady fertility declines in many countries that have tended to resist this trend). A population increase on this scale would create more pollution, require a doubling of global food production under difficult conditions (including climate disruption), and result in more people suffering during conflicts and famines.
To be sure, there has been plenty of necessary research into how the world can better accommodate billions more people, in terms of pollution, agriculture, energy efficiency, and climate change. But such research fails to quantify the benefits of minimizing further population increases – a critical oversight.
While many researchers and policymakers seem to regard a rapidly increasing global population as inevitable, ordinary citizens recognize the serious problems and risks that this will cause. In a 2014 survey by the Global Challenges Foundation, a majority of 9,000 respondents in nine countries (the United States, Brazil, South Africa, Germany, Poland, Sweden, India, Russia, and China) considered population increase to be an actual or potential future threat to mankind. The same year, a Pew Research Center survey reported that 82% of American scientists regarded the growing world population as a major problem because “there won’t be enough food and resources.”
Yet the huge projected increase in the world’s population this century is avoidable. The size of the population in 2100 can be influenced now by international debate, government programs, and individual choices.
More specifically, an additional SDG to dampen population growth would promote funding for voluntary, rights-based family planning. This approach has a proven track record of success, not only in reducing births rapidly, but also in advancing the empowerment of women and spurring economic progress. No coercive “population control” measures are needed. Rather, wider awareness of the linkage between family size and ecological sustainability can help parents recognize the benefits of having fewer children.
Clearly, population growth cannot be stopped overnight, nor feasibly by 2030. But we could establish trends toward a population peak and decline in all countries by then. This includes not only developing countries, where population growth threatens security, but also rich countries with large ecological footprints, where population decline and its benefits are resisted because of ill-founded fears of demographic aging.
Reproductive rights and family planning are mentioned in both SDG 3 (good health and wellbeing) and SDG 5 (gender equality), but neither goal explicitly aims to reduce population growth. As they currently stand, the SDGs imply that there is no longer any need to curb the global population increase, even though it undermines most of the goals.
As a result, there is a big risk that the world will achieve little of the 2030 Agenda, especially in countries where high birth rates persist. But we should not give up. Changes in population policies and norms can reduce birth rates. And by adopting a new SDG to this effect, the world could yet save the 2030 Agenda.
In addition to Frank Götmark and Robin Maynard, this commentary has been signed by:
Damayanti Buchori, Professor, Bogor Agricultural University (IPB), Indonesia
Philip Cafaro, Professor, Colorado State University, United States
Gerardo Ceballos, Professor, Instituto de Ecología, Mexico;
Richard Cowling, Professor, Nelson Mandela University, South Africa
Edu Effiom, Assistant Director Forestry, Cross River State Forestry Commission, and Chair of the Africa Chapter, Association of Tropical Biology & Conservation, Nigeria
Peter Matanle, Senior Lecturer, University of Sheffield, United Kingdom
Charles Ochieng, practitioner in reproductive health, Kenya
Jane O’Sullivan, Honorary Senior Research Fellow, University of Queensland, Australia
Luis F. Pacheco, Professor, Universidad Mayor de San Andrés, Bolivia
Aalok Ranjan Chaurasia, Demographer, Shyam Institute, India
Alon Tal, Professor, Tel Aviv University, Israel
Lucia Tamburino, PhD and postdoctoral researcher, Italy and Sweden
Luciano Martins Verdade, Associate Professor, Universidade de São Paulo, Brazil.
SHANGHAI – Historically, demographics has been a slow-moving variable. But the East Asian economies – especially China, Japan, and South Korea – have flipped so fast from rapid population growth to decline that they practically have whiplash.
As a planned economy, China was once obsessed with expanding its population. But, in 1957, the economist Ma Yinchu published The New Theory of Population and cautioned that this trend would soon begin to undermine China’s economic development. Though the government initially criticized his theory unfairly, Chinese leaders eventually took his warnings to heart, encouraging family planning as a way to promote economic growth.
In 1973, China went a step further, with the national wan, xi, shao (“late marriage, longer spacing, and fewer children”) campaign, which encouraged couples to have no more than two children. Six years later, this escalated into the infamous one-child policy. To ensure its long-term impact, family planning was finally written into the Chinese constitution in 1982.
The fertility rate plummeted. By the mid-1980s, it hovered above the so-called substitution level of 2.1, compared to 6.0 in the 1960s and 1970s. In the 1990s, the fertility rate fell to just 1.2-1.3 – a level that promised to hasten the country’s demographic aging significantly. The government nonetheless continued to enforce the one-child policy until 2016, when, finally, it shifted to a two-child policy.
With that, China’s fertility rate bounced back somewhat, reaching 1.58 in 2017, according to the National Bureau of Statistics. But it is now again on a downward slide, falling from 1.49 in 2018 to 1.47 in 2019. According to the population economist James Liang, it may be set to return to 1990s levels.
As Liang noted, in 2017, the total fertility rate of 1.58 reflected a fertility rate of 0.67 for one-child families, 0.81 for two-child families, and 0.11 for three-child families. The fact that the fertility rate of two-child families is higher than that of one-child families reflects the two-child “accumulation effect” – that is, one-child families who had previously wanted to have a second child finally being able to have one. Before long, that effect will certainly dissipate, and the total fertility rate will quickly drop to 1.2, putting China in the same position as Korea and Singapore, and possibly behind the United States.
This view is supported by pre-2016 birth trends. In 2010, the one-child birth rate stood at 0.73. While it rose slightly in 2011-13, it fell to 0.72 in 2014 and 0.56 in 2015. Given that one child was always allowed, the vast majority would have been registered, meaning that these fertility-rate figures for one-child families are unlikely to be underestimates.
Overall, there have been fewer than 18 million births annually over the last decade, compared to 25-30 million during the peak years. In 2019, China registered only 14.65 million newborns. Last year, that figure dropped to 10.03 million – nearly a 15% decline, year on year. Although the sharp decline in births in 2020 may well have reflected the impact of the coronavirus pandemic, the downward trend is clear.
China’s rapidly declining fertility reflects the legacy of family-planning policies. They are also increasingly driven by rapid, sustained urbanization, universal education, and economic development – factors that are known to contribute to significant declines in birth rates.
This was certainly the case in Japan, whose rise to advanced-economy status was followed by a sharp drop in fertility. In 1995, however, the birth rate dropped below 1.5. A decade later, it stood at 1.26. Policies to encourage childbirth subsequently helped to raise the fertility rate, but only to 1.4, where it remains today.
South Korea is doing even worse. Although the authorities have also attempted to encourage its citizens to have more children, its fertility rate hovered around 1.0 in 2017-18, before dropping to 0.84 last year – the world’s lowest.
As is true in Japan, South Korea’s low fertility rates can be explained largely by economic factors. With rapid growth and large-scale urbanization driving up housing, education, and health-care costs, couples’ willingness to have children has weakened.
This implies serious risks, beginning with a rapidly growing old-age dependency ratio. In China, the working-age population has shrunk by some 3.4 million per year over the last decade. Those who are joining the workforce today were largely born when the fertility rate was already below the replacement level.
Meanwhile, life expectancy is increasing. As a result, the share of China’s elderly population (aged 60 and above) rose from 10.45% in 2005 to 14.7% in 2013, and to 18.1% in 2019. Today, there are more elderly people in China than there are children (aged 15 and under). By the year 2050, the number of elderly in China is expected nearly to double, from 254 million today to almost 500 million.
These trends will significantly undermine the potential output growth of the Chinese economy, owing to decreased labor-force participation, and put tremendous pressure on public budgets, as outlays for pensions and social security far exceed income payroll-tax revenues. This is already happening in both Japan and South Korea.
China has always been cautious about loosening family-planning rules. But, if it is to sustain its economic dynamism in the decades to come, it must work hard to expand its labor force, including by raising the retirement age and encouraging families to have more children. Otherwise, its population will become old in the same way Ernest Hemingway described how one goes bankrupt: gradually, then suddenly.