Dimensions: 9'' x 6'' 256 pages Ivan R. Dee Publication Date: October 2004 Hardcover ISBN: 156663606X

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September 2004
Fewer: How the New Demography of Depopulation Will Shape Our Future
By Ben J. Wattenberg

Over the next few decades, world fertility levels are projected to continue a dramatic decline, leading to a deep reduction in previously expected levels of world population. In modern countries, fertility is already below the "replacement level" of 2.1 children per woman; the developing world will follow. The potential implications for commerce, pensions, the environment, and geopolitics are enormous.

Ben J. Wattenberg, a senior fellow at AEI, is the moderator of the PBS program Think Tank with Ben Wattenberg and the author of ten previous books, including The Birth Dearth (1989).

Depopulation and Its Roots

For at least 650 years, since the time of the Black Plague, the world's population has headed in only one direction: up. But within a few decades, the number of people on earth will level off and then likely go down over an extended period of time. Never have birth and fertility rates fallen so far, so fast, so low, for so long, in so many places, so surprisingly. After all the attention paid to the "population explosion," we face a New Demography. We will be well served if we understand the magnitude of its implications. Joseph Chamie, director of the UN Population Division (UNPD), puts it this way: "There was the Industrial Revolution. There was the Information Age. Now there is the Demographic Revolution."

In countries--both modern and less developed--throughout the world, birthrates and fertility rates have fallen at an astonishing rate. Fertility is measured best by the Total Fertility Rate (TFR), the average number of children born per woman over the course of her lifetime. It takes a TFR of 2.1 births per woman to "replace" a modern society over time. Because of extremely low fertility, Europe has already begun losing population and is projected to fall from 725 million today by approximately 100 million people or more by mid-century, and continuing thereafter. Japan will fall from over 125 million to just 110 million.

In the less developed countries (LDCs), fertility rates are typically falling even more rapidly than did the modern countries a few decades earlier, although the LDCs are starting from a higher level. Until the late 1960s, women in the less developed region were bearing about 6 children per woman; that number is now about 2.7 and falling fast. About twenty-five LDCs are already at or below replacement level. The change has been so dramatic that in 2002, the UNPD changed its fertility projections for these countries, allowing them to fall below replacement for the first time to 1.85 children per woman.

Among the modern nations, only the United States is an exception to the trend, as it is likely to grow from about 285 million to about 410 million people by mid-century because of higher fertility and continued robust immigration. The United States has a below replacement Total Fertility Rate of 2.01, which is just below replacement but well above Europe and Japan at 1.38 and 1.32 children per woman, respectively. The United States takes in many more immigrants, legal and illegal, than Europe and Japan (4.1 immigrants per 1,000 people each year, compared to 0.9 for Europe and 0.4 for Japan). Attitudes toward immigration are much more favorable in America than in Europe or Japan.

What is driving these trends? The regnant "Demographic Transition" theory has shown that as modernization proceeds, populations shift from high mortality and high fertility to low mortality and low fertility. Why? There are many reasons, including more education and paid employment among women, a climb in contraception prevalence, wealthier populations, and the move from rural to urban areas. Poor women-breaking previous patterns-are having many fewer children, perhaps because of the spread of the modern communications system that shows modernism to all. But the decline in fertility was supposed to stop at about replacement level. It did not. Now there is academic discussion of a "Second Demographic Transition," with more divorce, cohabitation, and the urge toward self-realization.

Notwithstanding the ongoing decline in fertility for about half a century, most people still seem to be hooked on the notion of the population explosion. Indeed, the global population will grow from about 6.5 billion people to between 8 and 9 billion by mid-century before starting to decline (after earlier projections had shown 11.6 billion).

The New Demography and Its Effects

Societies are getting older as fewer young people are in the demographic mix. Lots of old people and relatively few younger people means that nations with "pay as you go" pension and health systems will not be able to meet their current obligations without increasing taxes or lowering benefits. This has already caused political turmoil, including general strikes in some European countries. (In America, in 1989, then-chairman of the House Ways and Means Committee Dan Rostenkowski was chased into his car by an irate mob objecting to mandatory catastrophic health insurance, which was then repealed.)

The benefits promised to these soon-to-be seniors are so large they cannot be effectively measured--and are at least in the quadrillions of dollars, according to Richard Jackson of the Center for Strategic and International Studies and coauthor of the 2003 Aging Vulnerability Index.

The New Demography will also play a major role in the commerce of the next few decades. The steep decline of fertility and population will likely yield economic problems in the modern nations, America excepted. Where will the customers come from? Because it has never happened before in modern times, we do not really know what happens to economies as populations shrink. But consider one critical industry: real estate. What happens when the number of empty dwellings keeps growing, and buyers are scarce and growing scarcer?

In the first paragraph of a recent publication of the European Commission, authors Kieran McMorrow and Werner Rogers write that the implications of aging populations "will be significant in terms not only of a slowdown in the growth rate of output and living standards but also with regard to fiscal and financial market trends, falling rates of capital accumulation and a slowdown in productivity growth. . . . The coming decades bode ominously." (emphasis added).

There will be fewer jobs but also fewer people who need jobs. That may turn out to be a wash, though perhaps in demoralized and depopulating countries.

Many wealthy nations are beginning to act. Germany, Canada, Sweden, and the United Kingdom have enacted policies to encourage fuller funding of their pension systems. Germany, Sweden, the UK, and the United States have enacted measures to reduce benefits. More are certain to follow.

In Taiwan, government authorities are pushing for tax reductions and education subsidies to boost fertility rates. In early 2004 the South Korean government proposed raising the average retirement age from fifty-seven to sixty. Japan passed laws in 2003 to discourage depopulation trends, namely a "Fundamental Law Against a Decline in the Fertility Rate" and "The Law to Support the Development of the Next Generation." We shall see. Pronatalism does not have a good track record.

The innovative Singapore Ministry of Community Development and Sports has launched a government campaign designed to increase fertility by sponsoring two new perfumes, "floral" for women and "musky" for men, each called "Romancing Singapore Eau de Parfum." Keep your eye on the 2005 birthrates.

As AEI demographer Nicholas Eberstadt has pointed out, a one-child family creates an arena where, if continued, children would grow up without brothers, sisters, uncles, aunts, and cousins, but with as many as two parents, four grandparents, and eight great-grandparents (assuming rising life expectancies). In a one-child family, the child's only direct relatives are all ancestors. Would all that change the nature of human behavior? It might. For one thing, parents with one child might not allow their child to take the reasonable risks linked to learning about the world. They might be less willing to let the child join the military, even when necessary.

In the environmental realm, we will first have more people, who will, in theory, yield more pollution, which will then, in turn, decline with depopulation. There will be fewer people driving cars, running air conditioners, and cutting down rainforests, and there will be more space per person.

But even this cause-and-effect assumption of environmental degradation is probably not the way the world works. During the years of the Cold War, the free-market nations of Western Europe were vastly more industrialized, productive, and affluent than those in Communist Eastern Europe. Yet pollution of every sort--air, water, and ground--was vastly more extensive in the poorer command economies of Eastern Europe. This is because a rich country like the United States can reduce pollution when it wants to, even as it grows richer and more populous. Affluence can be directed to pollution control measures and has been. (Part of the credit surely goes to the tumult raised by the environmental movement, notwithstanding its many and sometimes damaging exaggerations.)

Demographics have always played an important role in the geopolitical power games nations play. In the past, a nation with more people was perceived to have a major military advantage over a potential adversary with fewer people. This may be less true than in the past. But defense is essentially a fixed cost. Because of growing population, America will be able to afford an increase in defense spending without increasing the proportion of GDP spent on defense. The converse will be true in Europe and Japan.

America's traditional principal allies will likely be relatively weaker as the Europeans make up a smaller and smaller proportion of the world's population. In 1950, 22 percent of the world lived in Europe. By the year 2000, that proportion was down to 12 percent. In 2050, it will have fallen to about 7 percent. America, the only major modern nation that will continue to see growth in the next fifty years, is likely to go unchallenged by any of the other modern, shrinking nations as the world's sole superpower. America may have to go it alone-not because it wants to, but because it has to.

China and India are the only countries more populous that the United States--the only "billionaire" nations (in population terms). China, until 9/11 considered America's greatest long-term competitor, will continue growing for the next twenty-five to thirty years, nearly hitting the 1.5 billion mark by 2030, before it starts shrinking (and facing an enormous pension problem.) With a standing army of two million men and 450 nuclear warheads, its autocratic regime still represents a potential threat to the West's long-term interests. A trend toward democratization in China would serve not only its people's interests, but the world's.

India, the world's largest democracy, will become the largest nation in the world in a few decades, surpassing China. (It deserves a permanent seat on the UN Security Council.) Its per-capita income is growing sharply, but from a very low base. The World Bank expects the poor nations to grow relatively more rapidly than the rich nations, yielding movement toward "economic convergence" over an extended period of time.

This is part of the "demographic dividend" that is expected to provide a window of great opportunity for real and substantial economic growth in the less developed countries. As fertility falls rapidly, as it is now doing in the LDCs, the national and personal costs of feeding, clothing, and educating children go down. It costs a family less to provide for two or three children than it did to provide for a much larger family in an earlier time. And those families with fewer children are saddled with less of a burden of child-related expenses, and with the consequent opportunity to create and save wealth, which produces jobs. But this is not automatic. For the LDCs to capitalize on the favorably changing age structure, they must play by the rules of solid economic behavior--not something that has previously characterized most LDCs. There is evidence of this kind of progress in many poor regions.

What about Islam? What about the Islamist terrorists, who are now considered the chief global villains? There are more than a billion Muslims in the world. Arabs are a subset, making up about a quarter of that number. Contrary to popular belief, fertility rates in the Muslim world are also declining dramatically: Tunisia, Lebanon, and even Iran are already at or below replacement level, with Algeria and Indonesia coming along fast. The Muslim share of global population will climb only marginally in the decades to come.

Freedom House rates the Arab nations as the most repressive in the world, at a time when human rights and political liberties are growing elsewhere more rapidly than ever before. The Wall Street Journal/ Heritage Foundation index of economic liberty shows Arab nations generally doing poorly. Moreover, the continued migration of educated Arab young people to other parts of the globe is hurting the Arab economies.

But even in the Arab Middle East, some muffled bells of liberty can be heard. It is a cause that has become America's mission. Although it is a difficult time now, it is likely to prevail.

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