Bernardo-M.-Villegas-125

Human Side Of Economics

FREEPIK

(Part 2)

Expectedly, some demographers who are still influenced by the anti-natalist mindset of the last century that led to authoritarian leaders like Lee Kuan Yew of Singapore and Mao Zedong of China to implement population control programs don’t agree with Elon Musk’s dire predictions about “population collapse.”

Patrick Gerland of the United Nations’ Population Estimates and Projections Section commented that the world’s population is going to peak at some point in the second half of the 21st century and then plateau or gradually drop. According to Gerland, “framing this as a collapse is probably too dramatic.” He points out that the only region that will see an overall decline between 2022 and 2050 is eastern and southeastern Asia. In contrast, the population in sub-Saharan Africa will almost double, from 1.2 billion in 2022 to just under 2.1 billion in 2050. During the same period, India’s population will grow by over 250 million, increasing its lead over China as the largest nation in the world.

It is true that the word “collapse” does not refer to populations dropping precipitously over the foreseeable future. Even assuming that China’s population will drop from 1.4 billion today to 1 billion in the foreseeable future, 1 billion people are still a huge human resource and a rich source of domestic market demand. What Elon Musk is saying is that the crisis has nothing to do with the number of people itself. The problem is that if 40% of your 1 billion people are over 65, as we noted in the first article in this series, China would face a serious economic crisis with pension costs rising to untenable levels and healthcare becoming unaffordable to millions of ageing people, not to mention the absence of young workers to contribute to the pension system and to actually physically take care of their ageing parents and grandparents.

I repeat: what Elon Musk is warning the world’s leaders about is not population decline in itself but the ageing crisis that brings with it intractable economic and financial problems.

In this regard, I remember what my late sister Maria Victoria (Marvy) used to narrate about her experiences in a home for the aged put up by well-to-do Jewish families in Toronto where my sister migrated to in the 1970s. She worked as a pharmacist in that nursing home. She could never forget the image of an ageing mother who would be visited by her only child once a year — during the Christmas period. Then for the rest of the year, that poor lady — who was not wanting in terms of material comfort — would just keep on repeating mindlessly to the people around her that next Christmas she would be visited by her “loving child.”

The ageing crisis has human costs much beyond the problem of pension or social security issues. Just think of the incalculable suffering of old people feeling abandoned by their loved ones. Just imagine the moral and psychological depression of the majority of ageing people who are not lucky enough to enjoy the material comforts of that institution in which my late sister worked, in the country that today has 80,000 Filipinos supplementing its dwindling work force because of very low fertility rates.

Let us consider another case, this time in the European Union. In an article by Amy Kazmin entitled “Italy faces a ‘demographic winter,’” Italy’s demographic crisis is described as among the most acute in Europe — the result of decades of economic stagnation and political indifference to women’s aspirations. Fortunately, Italians are still generally pro-children. Surveys by Istat, the national statistics agency, found that 46% of Italians ideally want two children, while a quarter would like three or more. Yet, the country’s fertility rate — at just 1.24 babies per fertile woman — is one of the lowest in Europe. Istat is now warning of a “crisis scenario” with Italy’s population of 59 million projected to drop to 48 million — with an average age of 50 — by 2070, further straining an economy that is already struggling with one of Europe’s heaviest debt burdens.

The present Italian government is trying to make up for past lack of assistance to women who want to have babies. Prime Minister Giorgia Meloni — whose Brothers of Italy party campaigned under the motto of “God, Fatherland and Family” — is sounding the alarm. Under her leadership, she wants to reverse the trend and convince Italian women to have more babies, offering tax cuts and other incentives. Prime Minister Meloni, the first female prime minister of Italy, told a conference held in Rome recently about the demographic crisis:

“Children are the first building block for any kind of future. We have made the birth rate and the family a top priority… for the simple reason that we want Italy to have a future again.”

The Government created a Ministry for family, birth rates, and equal opportunities. It is presently headed by Eugenia Maria Roccella, a former feminist and abortion rights activist who has been recently converted to the pro-life cause. She says that women in Italy should see child rearing as a valid choice. “Maternity has been largely devalued. If I say, ‘I am a career woman,’ it’s different. There must be social gratification for those who say, ‘I am a mother.’”

Fortunately, Italy does not have a history of government population control programs. The dropping fertility rate had nothing to do with a government’s oftentimes coercive efforts to “stop at two” as in the case of Singapore during the time of Lee Kuan Yew, or the more notorious one-child policy in China during the time of Mao Zedong. As some economists and demographers observed, raising children in Italy is often seen as incompatible with being employed in paid jobs. After the baby boom that followed the end of the Second World War, deliveries declined steadily since the 1970s, as more educated women delayed motherhood to join the labor force. As described in the Financial Times article, other European countries, such as Sweden, Germany, and France, responded to the increasing desire of women to be part of the labor force by increasing state childcare, promoting flexible work and encouraging gender equality. This positive state response paid off in what the Italian economist Rinaldi called a “virtuous cycle” of more women working and raising children.

The good news is that a large percentage of Italians do aspire to have more children. It will now be a matter for the leadership shown by Prime Minister Meloni and Family Minister Roccella. With the pro-life cause being espoused by its current leaders, the Government of Italy may be able to discover ways of increasing female employment and thus follow the example of other European countries where higher female employment rates are correlated with higher fertility — which may appear counterintuitive but makes sense when one considers the difficulty of raising children on the single income of only one spouse. In fact, the Government may get some strong support from business and civil society that can also come out with more products and services that make it easier for mothers to simultaneously keep a job while attending to the needs of their children, especially during the years of infancy.

Because the desire to have children is deeply ingrained in the nature of women, as indicated by the data from Instat that a very large percentage of Italian women still desire to have two to three children, all efforts must be exerted by the entire society to make being employed compatible with having the number of children that will keep the population growing, which is an average of 2.1 children per fertile woman, very much within the aspirations of Italian women.

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia