The End of Doom

by Ronald Bailey

  Further insights into how the life prospects of women shape reproductive outcomes is provided in another 2010 article in Human Nature, “Examining the Relationship Between Life Expectancy, Reproduction, and Educational Attainment.” That study, by University of Connecticut anthropologists Nicola Bulled and Richard Sosis, confirmed Low’s findings. They divvied up 193 countries into five groups by their average life expectancies. In countries where women could expect to live to between forty and fifty years, they bear an average of 5.5 children, and those with life expectancies between fifty-one and sixty-one average 4.8 children. The big drop in fertility occurs at that point. Bulled and Sosis found that when women’s life expectancy rises to between sixty-one and seventy-one years, total fertility drops to 2.5 children; between seventy-one and seventy-five years, it’s 2.2 children; and over seventy-five years, women average 1.7 children. The United Nations’ 2012 Revision notes that global average life expectancy at birth rose from forty-seven years in 1955 to seventy years in 2010. These findings suggest that it is more than just coincidence that the average global fertility rate has fallen over that time period from 5 to 2.45 children today.

  Kids Are Expensive

  Research by economists further illuminates the processes that yield falling fertility. Brown University economist Oded Galor and his colleagues have devised a unified growth theory that explains how and why people begin to focus on developing and deepening their human capital (chiefly by means of education), which then further accelerates the pace of technological progress. As a result, fertility and population growth fall, enabling humanity to escape from millennia of Malthusian stagnation into the modern world of sustained economic growth.

  Recall that Malthus asserted that people on average would produce as many children as they could feed, if not more. In modern econ-speak, children are a normal good: that is to say, as income increases, demand for kids would also increase.

  Instead, researchers observe that as incomes increase, the number of children per woman decreases. One possible explanation for this phenomenon is that the opportunity cost of raising children has risen over time. Opportunity cost is a benefit that must be given up to acquire or achieve something else; for example, a person may have to give up a Caribbean cruise in order to be able to buy a new car. In this case, a parent would be forgoing the extra income he or she would earn working and instead spend the time rearing a child. According to this analysis, the price of children measured in forgone income rises over time, lowering demand for them.

  However, Galor points out that during the initial stages of the Industrial Revolution, as incomes were increasing in Western Europe, average fertility was increasing, just as Malthus predicted. (In contrast, US fertility rates fell throughout the nineteenth century, from 7 children per white woman in 1800 to 3.5 in 1900.) Galor suggests that the opportunity cost argument for fertility decline is too simple. If income had been the key determinant, one would find that fertility should fall as any country reaches a specific level of average per capita income. Instead, Galor notes that at the end of the nineteenth century, fertility rates begin to plummet simultaneously for a number of Western European countries at very different per capita income levels.

  Galor argues that fertility began to fall as Western European economies developed increased demand for human capital during what he calls the second phase of the Industrial Revolution. In this analysis, initial increases to average incomes produced by technological progress resulted in parents’ increasing both the quantity and quality of their children. However, toward the end of the nineteenth century, Galor asserts, “further increases in the rate of technological progress induced a reduction in fertility, generating a decline in population growth and an increase in the average level of education.”

  As economic growth was increasingly fueled by the development of ever more complicated technologies and management services, the premium attached to education began to increase. The result is that parents switched from having more children to investing in fewer higher quality (more educated) children.

  Galor further argues that at the turn of the twentieth century, international trade encouraged fertility rates to fall further as rich countries began to specialize in the production of the sorts of goods that required a lot of human capital to make. On the other hand, Galor contends that poor countries increasingly specialized in goods that required a lot of manual labor to produce. The result was rising income for both rich and poor countries, but a fateful divergence in fertility trends.

  During the twentieth century, fertility rates basically continued to fall in rich countries as they invested in more human capital, especially in higher levels of education. In addition, as demand for human capital grew in rich countries, schooling expanded to include women, who then entered the paid workforce. This further raised the opportunity costs of having children and encouraged further reductions in fertility.

  On the other hand, poor countries channeled a larger share of their gains from increased international trade into producing more children. As a consequence, “the demographic transition in these nonindustrial economies has been significantly delayed,” asserts Galor, “increasing further their relative abundance of unskilled labor, enhancing their comparative disadvantage in the production of skill-intensive goods, and delaying their process of development.”

  OECD economist Fabrice Murtin concurs with Galor that education is the key to lower fertility rates. In his 2009 study “On the Demographic Transition,” Murtin assembled data from seventy-one countries from 1870 to 2000, to conclude that “education, rather than income or health-related variables, is the most robust determinant of the birth rate, potentially explaining about 50 to 80 percent of its decrease when average schooling grows from 0 to 10 years.” Galor cites data showing that the percentage of British children ages six to fourteen who were in school rose from about 10 percent in 1860 to more than 80 percent by 1895.

  As noted previously, demographer Wolfgang Lutz argues that it’s not just more education, but specifically more schooling for girls that correlates with deep cuts in fertility rates. For instance, the fertility rate for Ethiopian women with no formal education was 6.1 children in 2005 and 2.0 for women with secondary and higher education. Providing women access to higher education is associated with longer lives for themselves and lower child mortality. Lutz calculates that world population in 2060 would be 1 billion fewer if the education of women globally could be speeded up to the rate achieved by South Korea in the 1960s and 1970s.

  As Galor noted, the demographic transition was delayed in many poor countries, but in the second half of the twentieth century these countries also began to see rapid declines in their fertility rates. Bucknell University political scientist John Doces finds that increasing international trade is now propelling the demographic transition throughout much of the developing world. In fact, as global fertility declined since the 1950s, the value of world merchandise exports during the same period has soared by nearly ninety times.

  In his 2011 study “Globalization and Population: International Trade and the Demographic Transition,” Doces looks at recent data from a large number of countries and finds that those that are most open to international trade are the ones experiencing the fastest decline in their fertility rates. Doces argues that the primary cost of having children is the time and money it takes to raise them, which leaves parents less time to consume other goods. International trade expands the types of goods people can enjoy and lowers their costs. The cost of rearing children does not decline substantially, so they become more expensive relative to the new opportunities and goods afforded by increased international trade.

  In addition, Doces cites a 2006 study analyzing the effects on globalization on women in 180 countries that shows “increasing international exchange and communication create new opportunities for income-generating work and expose countries to norms that, in recent decades, have promoted equality for women.”46 As a result, trade-induced demand for human
capital expands to include women, further cutting fertility rates in poor countries. This conclusion is further bolstered by a 2005 study by University of Helsinki economists Ulla Lehmijoki and Tapio Palokangas; according to this study, in the short run trade liberalization boosts birth rates, but in the long run it cuts fertility. Again, this is true largely because trade liberalization encourages the development of women’s human capital (education), which makes childbearing relatively more costly.

  The Invisible Hand of Population Control

  In 2002, Seth Norton, an economics professor at Wheaton College in Illinois, published a remarkably interesting study, “Population Growth, Economic Freedom, and the Rule of Law,” on the inverse relationship between prosperity and fertility. Norton compared the fertility rates of over a hundred countries with their index rankings for economic freedom and another index for the rule of law. “Fertility rate is highest for those countries that have little economic freedom and little respect for the rule of law,” wrote Norton. “The relationship is a powerful one. Fertility rates are more than twice as high in countries with low levels of economic freedom and the rule of law compared to countries with high levels of those measures.”

  Norton found that the fertility rate in countries that ranked low on economic freedom averaged 4.27 children per woman, while countries with high economic freedom rankings had an average fertility rate of 1.82 children per woman. His results for the rule of law were similar: fertility rates in countries with low respect for the rule of law averaged 4.16, whereas countries with high respect for the rule of law had fertility rates averaging 1.55.

  Economic freedom and the rule of law occur in politically and economically stable countries and produce prosperity, which dramatically increases average life expectancy and lowers child mortality; this in turn reduces the incentive to bear more children. As data from the Heritage Foundation’s Index of Economic Freedom shows, average life expectancy for free countries is over eighty years, whereas it’s just about sixty-three years in repressed countries.

  Let’s take a look at two intriguing lists. The first is a list of countries ranked on the 2013 Index of Economic Freedom issued by The Wall Street Journal and the Heritage Foundation. Then compare the economic freedom index rankings with a list of countries in the 2013 CIA World Factbook ranked by their total fertility rates. Of the thirty-five countries that are ranked as being economically free or mostly free, only two have fertility rates above 2.1—the United Arab Emirates at 2.36 and Jordan at 3.61. If one adds the next fifty countries that are ranked as moderately free, one finds that only five out of eighty-five countries have fertility rates above 3, all of them in sub-Saharan Africa except Jordan. It should be noted that low fertility rates can also be found in more repressive countries as well—for example, China at 1.55, Cuba at 1.46, Iran at 1.85, and Russia at 1.61.

  In addition, along with increased prosperity comes more education for women, opening up more productive opportunities for them in the cash economy. This increases the opportunity costs for staying at home to rear children. Educating children to meet the productive challenges of growing economies also becomes more expensive and time consuming.

  Thailand’s experience over the past thirty years exemplifies this process. During that time, female literacy rose to 90 percent; 50 percent of the workforce is now female; and fertility fell from 6 children per woman in the 1960s to 1.5 today. Although Thailand is classified as only moderately free on the economic freedom index, its gross domestic product (GDP) grew in terms of purchasing power parity from just over $1,000 per capita in 1960 to over $8,500 per capita in 2012.

  Back in 1968, Garrett Hardin declared, “There is no prosperous population in the world today that has, and has had for some time, a growth rate of zero.” That’s no longer true. Japan is now experiencing a fall in its population due largely to reduced fertility, as are Germany, Russia, Italy, Poland, and some 20 other countries and territories. And as we have seen, the global total fertility rate is rapidly decelerating. Of the 231 countries and territories listed in the 2013 CIA World Factbook, 122 are at or below replacement fertility rates.

  Norton persuasively argues that Hardin’s fears of a population tragedy of the commons are actually realized when the invisible hand of economic freedom is shackled. Many poor countries have weakly specified and enforced property rights. Poor property rights means that many resources are effectively left in open-access commons where the incentive is to grab what one can before another individual gets it. Norton points out that in such situations, more children mean more hands for grabbing unowned and unprotected resources such as water, fodder, timber, fish, and pastures, and for the clearing of land. Lacking the institutional incentives to invest in and preserve resources, this drive to take as much as possible as quickly as possible leads to perpetual poverty.

  And what about in the past? Haven’t societies collapsed due to overpopulation? To the extent it is true that some societies have suffered collapses, we now know that it was because they lacked the proper social, political, and economic institutions for channeling individual striving into a process of economic growth that ultimately promotes the accumulation of human capital and lower fertility. Very few, if any, earlier societies could be characterized as either economically free or respectful of the rule of law. Throughout history, most people lived in the institutional equivalents of open-access commons overseen by rapacious elites who encouraged high fertility rates and the plundering of natural resources. It turns out that economic freedom and the rule of law are the equivalent of enclosing the open-access breeding commons, causing parents to bear more and more of the costs of rearing children. In other words, economic freedom actually serves as an invisible hand of population control.

  Hope for Africa?

  The United Nations’ 2012 Revision forecasts that more than half of global population growth between now and 2050 will take place in Africa, rising from 1.1 billion to 2.4 billion. The middle-variant trend for sub-Saharan Africa projects that total fertility rate will fall from 4.9 children now to 3.1 by 2050, reaching 2.1 by 2100. As noted above, a more worrying study published in an October 2014 issue of the journal Science suggested that by 2100 Africa’s population would grow even faster, rising from 1.1 billion to between 3.1 and 5.7 billion, with a median projection of 4.2 billion.

  But is it plausible that much of Africa and many of the other least developed countries will remain high-fertility basket cases for the next several decades while the rest of the world modernizes, with concomitant improvements in the life prospects of women? Surely it is reasonable to expect that new medicines, vastly more productive crops and farming techniques, high quality education delivered via low-cost computerized tablets, cheap decentralized energy, and 3-D printing of tools and goods will spill over from the labs and factories of rich countries. These modern tools will go a long way toward ameliorating the chaos and poverty currently afflicting the least developed nations. In addition, the continuing global abatement of violent conflict is already taking hold in Africa and in other poor countries. For example, in October 2014, U.S. Naval War College researcher David Burbach and Tulane University political scientist Christopher Fettweis pointed out that “after the year 2000, conflict in Africa declined, probably to the lowest levels ever.” While they noted an uptick in battle deaths on the continent between 2010 and 2013, those casualties were still almost 90 percent lower than the average in the last decade of the twentieth century. “Changes in external support and intervention, and the spread of global norms regarding armed conflict, have been most decisive in reducing the levels of warfare in the continent,” they concluded. “Consequently, there is no Africa exception to the systemic shift toward lower levels of armed conflict.”

  Among the regions of the world, according to UNESCO, adult and youth illiteracy are highest in sub-Saharan Africa. For example, among Africans aged fifteen through twenty-four, the male literacy rate stands at 76 percent versus the female rate of 64 percent. Obviously, the m
ore that donors from rich countries can do to promote the education of women in the world’s poorest countries, the better. In addition, Africa is rapidly urbanizing, which will also push fertility rates lower. For example, a 2000 study by researchers at Pennsylvania State University and Tulane University reported that African urbanites had nearly two fewer children than did their rural counterparts. Demographers working for the International Food Policy Research Institute found in 2012 an even greater urban-rural differential; Ethiopian women in the countryside had a total fertility rate of 6 offspring, whereas their city sisters averaged only 2.4 children.

  This process of modernization will bring dramatic improvements in health and longer lives, resulting in a steep decline in fertility rates. Consider that the life expectancy of Bangladeshi women rose from forty-four in 1970 to seventy-two today. In addition, literacy among Bangladeshi women aged fifteen to twenty-four climbed steeply from 38 percent in 1991 to 80 percent today, actually surpassing the male rate of 77 percent. Consequently, the country’s total fertility rate fell in just the twenty years between 1980 and 2000 from 6.6 to 2.9 children. It is now 2.2 children. If the current high fertility countries can realize the bare elements of political stability and economic freedom attained by Bangladesh, with its $750 per capita income, women will live longer and have fewer children. If this analysis is right—and most of the evidence points to that conclusion—the latest UN population projections will turn out to be too high and the musty Malthusian specter will finally fade away.

  In his 2013 book The Infinite Resource: The Power of Ideas on a Finite Planet, technologist Ramez Naam asks an intriguing question: “Would your life be better off if only half as many people had lived before you?” In this thought experiment, you don’t get to pick which people are never born. Perhaps there would have been no Newton, Edison, or Pasteur, no Socrates, Shakespeare, or Jefferson. “Each additional idea is a gift to the future,” Naam writes. “Each additional idea producer is a source of wealth for future generations.” Fewer people mean fewer new ideas about how to improve humanity’s lot.