Population Issues in Developed Countries

What’s happening?

• fertility rates in the developed world have plunged

• only one country (USA) has a rate above 1.8 and 20 developed countries have rates below 1.4

• the decline in the TFR shows no sign of ending

• the global average fertility level now stands at 2.7; in contrast, in the early l950s, the average number was 5; fertility is now declining in all regions of the world

What’s the scope of the issue?

• from 1990 to 2030 there will be three times the number of people 60+ years from 500 million to 1.4 billion.

• the rest of the world’s population will experience only a 68% increase

• the developed world’s population may decline by as much as 50% by 2100

• North America’s population will rise slightly from the current 300 million and then begin to decline to about 250 million

http://www.ifa-fiv.org/menu7_demographie/menu7_cadre_eng.htm

• called the “birth dearth”

• Europe’s population has already begun to decline: by 2100 it will be 290 million, about the same as the population of Russia, Germany and France today

Causes:• life expectancy has increased, primarily

due to improved health care.

• other factors include: healthier lifestyle reduction in cancer deaths and heart disease. improved auto safety (tires, speed limits, seat belts,

air bags, etc.)

• this may change with environmental degradation or the outbreak of a disease

• the role of women is key:

better educated and have greater career aspirations

children can be an impediment to career advancement

marry later, more likely to divorce; growing numbers of women don’t marry

access to effective birth control

Problems:

1. family structure changes

2. population gets older - the aging population

3. labour shortages

4. economic effects

5. shift in world power

Solutions?

• adopt pronatalist strategies - policies designed to encourage higher birth rates

• eg. - baby bonus; child tax credits; cash payments for each child; long parental leaves; flexible daycare and working hours; subsidize the cost of post-secondary education

• the bad news: little evidence that it works: Sweden has very generous policies and also the lowest TFR

• encourage private savings to address pension problems (so seniors won’t be poor)

• public (ie., government) pension plans are notoriously poor performers

• called “flow-through” plans, ie., paid for with tax revenues; not a real fund of money

• governments often “raid’ plans or force them to invest in struggling state-owned companies

• hand over government pension plans to private managers.

• raise retirement age, eliminate rewards for early retirement, reduce retirement benefits, redesign plans to aid the poor elderly only.

• encourage immigration.

• easy for Canada as we have experience with immigration and pride ourselves on being multicultural

• tough for Japan and much of Europe

• many problems with tolerance and acceptance, eg., France and Germany have significant opposition parties with strong anti-immigrant platforms