What Happens Next in 6 Minutes with Larry Bernstein
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The Birth Dearth
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The Birth Dearth

Speaker: Nicholas Eberstadt

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Nicholas Eberstadt

Subject: The Birth Dearth
Bio
: American Economist

Transcript:

Larry Bernstein:

Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, politics, and culture.

Today’s topic is The Birth Dearth.

Our speaker is Nicholas Eberstadt who will describe the current collapse in the global birth rate and what the implications are for business, housing, and warfare.

Tell us about the birth dearth. What's causing it and why is it important?

Nick Eberstadt:

There is a worldwide plunge in fertility levels. Three-quarters of the world's people live in countries that now have sub-replacement fertility levels, and the plunge has been remarkable in a number of countries over the last 10 years, much faster than expected. What this means if below replacement fertility continues is that the size of the working population starts to shrink unless it's compensated for through immigration. Small families make for gray societies. It's not so much longevity as low fertility squeezing the base of the population pyramid that makes for population graying. This is going to change daily routines, family life, dynamics of communities and public finance.

Larry Bernstein:

What is driving the female's decision to reduce the number of children?

Nick Eberstadt):

I am glad that you put it that way. The theory, which I think is correct, is that the change in fertility around the world is mainly driven by changing desire on the part of women with regard to family size. Women surveyed say they want changes in desired family size. You have got to get into a billion human hearts to navigate the zeitgeist and the changing tides.

In Myanmar that desperately poor country has entered voluntarily into below replacement fertility. I don't think that's the same thing that's going on in Manhattan. And something different is also going on in Bogota where birth levels at less than one baby per woman per lifetime.

Larry Bernstein:

One thing that has changed is birth control, and yet we see the decline 50 years after the pill. Why has there been a delay?

Nick Eberstadt:

The question is how much is that technological disruptor responsible? I wouldn't want to minimize the magnitude of that invention. I do not think everything is due to the pill. The fastest declines in the post-war era in birth rates have been in Muslim majority countries. And these are not modernizing with rapid industrialization.

Throughout the Muslim world, there's much less tendency to use modern contraceptives than elsewhere, but birth rates are still heading below the replacement level in Iran, Turkey, and Tunisia How do they do that without the pill? People have known about for quite a long time how to prevent births.

Larry Bernstein:

You mentioned that they do surveys to ask women about how many children they're going to have or want to have, and the survey results are different than what we see. What's driving the results versus the hopes and expectations? Is this the old problem where when you're a young woman you can have ideas about how many children you have, but then when the rubber hits the road, you got some serious challenges, economics, social, whatever that results in a change in decision making?

Nick Eberstadt:

Over time and across countries, the desired family size turns out to be absolutely the best predictor. There is no close second to that. In rich countries, as you indicate, the completed family size or the achieved fertility level is usually a little bit below the reported desired size. In low income countries, it's the opposite, but they're pretty close. What I wonder about are a couple of the real outliers. In Japan, you continue to see surveys consistently where women say that their ideal desired number of children is about two and a half, whereas the actual childbearing level is 1.3. I cannot prove this to you, but my question is whether this is a case of pleasing the surveyors.

Larry Bernstein:

I looked at a study of demographics in the Chicago with the age of births of the mother by race. And what you see is starting. At age 15, African Americans living in Chicago start to have births, and it takes off in the 19, 20, 21, 22, and then it begins to decelerate quite dramatically afterwards. With the Caucasians, you see something completely different. You see almost no teenage births, very few births in the early twenties, and then it starts to take off in the late twenties and continues into the thirties with substantial numbers. You have been talking about Japan and Burma, and I'm looking at two subpopulation groups within a single city with massively different effects, which indicates maybe we have a cultural phenomenon going on similar results across US cities by race. How do you think about those different decisions going within local communities suggesting that maybe different factors are much more important?

Nick Eberstadt:

We've got all sorts of ethnic, educational, religious subgroups in the United States. You see differences in between Vermont and Utah. We're seeing a narrowing of fertility differences between the states. We are also seeing a big narrowing among the ethnicities. Although the timing of births as you indicate is different for black women and white women. Hispanic differential was the biggest of all in the US , but between the non-Hispanic whites and the non-Hispanic blacks, the divergence has all but been eliminated in total fertility.

Black fertility being traditionally higher than white. Over the last generation the Hispanic Americans had way higher fertility than either blacks or whites. That differential has radically narrowed as well. That is part of the reason that America has tipped below replacement. With each of the ethnic groups in the United States, young women are on a path towards lower completed fertility than their mothers.

Larry Bernstein:

You compared Vermont to Utah to highlight the religious effect of the Mormons. Within a single religion like the Jews, secular Jews have a total fertility rate way below replacement. Religious Jews have TFR probably of something like four. Orthodox Jewish women talk about having four kids that is like no sweat, and they also have arranged marriages at 19 or 20, and they're popping out the first kid around 21 and they're on their way. And the results in Jewish society in the United States when you have a four TFR in a religious group and a TFR of 1.5 in a non-religious group, the proportion of the ultra-orthodox diverges massively to the point where the ultra-orthodox, even if it started as a small minority, become a majority quickly. Tell us about the role of religion in affecting total fertility rate and its implication.

Nick Eberstadt:

People who worship more tend to also be the people who have higher numbers of kids. The reason that the Hutterites and the Mennonites who are Christian believers who adhere to maximum possible fertility, the reason that they haven't taken over the universe is because not everybody who grows up in a religious household remains devout, and not everybody who grows up in a secular household remains secular. In Israel, it's not just the Orthodox whose birth levels have increased over the last generation. It's also people who consider themselves secular. You live in a place where everybody has got a lot of kids and you're more disposed towards having more kids.

This is social imitation. It cuts both ways. If we lose the social knowledge about larger families, it's going to have to be reacquired, so that it may not be simple to bounce down, then bounce back.

Larry Bernstein:

I want to talk about the role of war in the context of having a TFR less than two. Immediately after World War 2, there was a dearth of men. and German women could not have children or they could emigrate and find men someplace else.

The current war in Ukraine with Russia, we hear that there are not that many men in these cohorts, and if they obliterate themselves, the women face the decision of no families and emigrate. You could have missing cohorts from both genders, and when you have TFR of less than two, the society can crumble quickly in terms of total numbers.

Nick Eberstadt:

Ukraine's current population may be half of its immediate post-communist population.

There were big chunks taken out of a number of combatant populations in World War 2. Russian, Germans, Japan suffered pretty high casualties as well, but after the war, there was a fertility recovery in all of these countries, and part of that is just pent up demand when you return to some semblance of stability and normality. Unanswered is what the casualty tolerance is going to be in one child societies with steeply sub-replacement of fertility. We have got a horrible test in the war in Ukraine where you have got two sub-replacement societies slogging it out in a bloody war of attrition. So far, we haven't seen a whole lot of evidence of casualty aversion on either side.

Now, a big question is going to be casualty aversion in the People's Liberation Army, which is composed even more of only children than the forces in combat on the front in Ukraine. It's easy for me to imagine that if there were some unimaginable circumstance in which China were attacked in a ground war, that people would fight ferociously as patriots. It's harder for me to think what would happen in Taiwan. If there were setbacks and casualties. In the Confucian worldview, the end of the family lineage is a metaphysical tragedy. What happens when one faces the prospect of mass ends of lineages in conflict.

Larry Bernstein:

In America, there is that movie Saving Private Ryan, brothers were lost during D-Day, but the idea that a mother could give up four sons to a single battle, seemed unreasonable to the American public and that one of the sons needed to be brought back. It reflects that same human dynastic aspect that we are not willing to end lines to save the nation. It has to be something reasonable.

Nick Eberstadt:

When we look at the prospect of population decline, shrinking, aging societies, they are likely going to be a larger proportion of people who have no children, larger proportion of people who end up not having grandchildren. The family aspect of this is going to be the most complex and vexatious aspects of depopulation.

What happens where a woman who's 35 years old in Japan is slightly greater than even odds of never having any biological grandchildren. How does that work? Family is more than just an economic unit, but it is a unit of social and human support as well, and how we are going to adapt to the big changes and family consequences that come out of prolonged steep below replacement fertility.

Larry Bernstein:

I had Betsy Stevenson on the podcast recently and she said that what's driving this is a desire for delayed childbirth, that there is a desire to make investments in education and careers and then they want to have kids later. TFR may be underestimated, particularly in the United States because we haven't properly incorporated the impact of much later childbirths in the population.

I want to open the possibility of technological change. You just mentioned that a Japanese woman at 35, she's looking at a chance to have births, but she's only got five years left, but imagine there's a dramatic improvement in the child birthing process. Technology has been controlling births, but technology can also be in the future encouraging births. Can technology turn it around? Do you believe in the Betsy Stevenson deferral but still going to have the births?

Nick Eberstadt:

That's surely correct because we have seen an increase in fertility levels for women in their forties and late thirties. Question is how much that will matter in the grand arithmetic total? Is it imaginable. like neutral, I don't believe the story.

For all their joys, children are inconvenient, and if you have a premium on convenience, it is hard to square that circle. Technological disruptions, they have mainly been toward the effect of lowering fertility rather than raising it.

One of the big technological disruptors acting to reduce fertility around the world is this smartphone. This little narcissist mirror that we've got here tends to increase people's self-attention and raise the inconvenience factor in children, it's going to be even harder to get the demographic boost that some people would like to out of pro-fertility, technological innovations.

Larry Bernstein:

You mentioned geography as a way of thinking about populations. It's natural. You said the population of Ukraine is down in half. It's what we were looking at, but we also said the Ukrainian people are just moving out of that specific geography to someplace else, those that weren't killed in the fighting. David Reich is a Harvard professor who analyzed a history of DNA in peoples. He wrote a book, Who Are We and Where We're going? What he noticed was that the people that had lived in Europe thousands of years ago, we could look at their bones and we could look at the bones of people who live in Asia. And today the people who live in Europe are much more related to people who lived in Asia at that time than the people that lived Europeans, which basically means the Europeans died out and were replaced by Asians. We can think of it more today is that if we look before 1492, the bones in North America were predominantly of Native Americans, and if we look at the cemeteries today, we would find predominantly genetics associated with Europeans.

I suppose that if we come back 200 years from now, it may well be that the graveyards in Ukraine have more relationship to the people currently living in Azerbaijan than they do to current Ukrainians. How should we think about that in the context of the fertile will inherit the earth?

Nick Eberstadt:

The corollary to the earlier comment that most of the history of human populations is extinction, is that an awful lot of the history of human populations is population replacement. One tribe or one family being replaced by another. There is a constant churning in our species and the idea that there'll be more of some than of others in the future, it's almost impossible to forestall.

Human beings are living longer, better educated, better fed, better housed, more affluent than ever before. We're the most adaptable of all of the animals. I would be optimistic about this churning that you've described. It doesn't sound to me like something that we should automatically be afraid of.

Larry Bernstein:

When thinking about these decisions about children, it has been a family decision and not a state one. And the decision about how many kids you are going to have in a farm community is different than an industrial economy. And also the relationship you have intergenerationally within the family is different. You're thinking, well, how many kids should I have? I know when I go older I'm going to depend on them, and by the same token, they'll depend on me for certain resources and support. But the state has taken over a more active role in the last century, and now you are no longer individually dependent upon your offspring to take care of you in your old age. You can rely on the state to provide in the United States social security, Medicare, among others. How do you think about that relationship within the family versus the state as a potential driver of this total fertility rate?

Nick Eberstadt:

If we go back to right before the industrial age in Europe, we find that 20% of men and women would never marry and some large fraction of those never married would not have kids. The reason for that was because it was understood in that part of the world at the time that you had to be able to establish yourself to be able to set up a family and to be able to raise children, afford them. We're a vastly more affluent than we were then. We can have lots of people whose social provisions are taken care of by collective action by the state.

What we've seen in China in our lifetimes, which is where government decides that it's going to be a co-parent deciding about who has kids and how many. The one child policy was not 1.0 fertility in China, but there was a lot of awful things that happened when the state decided that it was going to use police power and bayonets to affect the numbers of babies that people had.

The Chinese government, by the way, has not given this up. It hasn't sacrificed that claim. It still makes the claim that births are not only a matter of family; they are a matter of state, which is chilling language that is being uttered by a totalitarian dictatorship. So, what we see in the future, regarding state interventions in childbearing, family formation is an open question.

Larry Bernstein:

The one child policy in retrospect once we have one child, maybe that's not so bad and we should just all have one kid. And then you get that death spiral in the population, and yet South Korea, which is right next door to China and did not have the one child policy, has a total fertility rate even lower than China's. Maybe this had nothing to do with China's one child policy, the whole area from Vietnam to Japan to South Korea to China, everyone is in the same boat. It didn't even matter what the governmental policy was. Did we as social scientists misplace that one child policy as being the instrument that caused the catastrophe or is it something else?

Nick Eberstadt:

We can't do the rerun on history, so we don't know exactly what the demographic consequences of the one child policy were. We know that it was one of the most horrifying intrusions on family life that's ever been attempted as a grand social experiment. And so we can be pretty sure that as the mother of all social experiments, it also had the mother of all unintended consequences. What we do see is that all through East Asia, we've had this plunge in fertility.

What we saw happen in China was partly excused intellectually by the panic about the population explosion that was so prevalent in intellectual and policy circles a generation or two ago. I worry on the flip side that if we have a panic about depopulation, that there may be some permission giving behavior for measures that we would also regret. It is hard for me to imagine how we're going to force people to have babies with bayonets, but there may be interventions that turn out to be regrettable.

Larry Bernstein:

Birth cohorts had a pyramid back in the day, few elderly, lots of kids, some parents, and when you had the pyramid, I remember in my European history class in high school when we analyzed 16th to 18th century Spain, they said, there is so many children. They had this primogeniture process whereby the eldest son got the land holdings, the second son was given to the church, and then the other kids had to figure it out, and many of them emigrated.

When you have so many kids and so little land, we got ourselves a problem. But when we flip the pyramid upside down where there's elderly, and only one grandson, and it is the reverse, the guys can inherit everything. He's got the wealth transfer from that previous story in reverse. He gets four land plots and then 16 land plots to generations later. When you say that the population in your article in Foreign Affairs is that the population of South Korea will decline by 95%, well that is a 20 bagger per unit of land available to those South Koreans. And if they're going to get really wealthy. There'll be no lines at Disney World. Everything will be vastly available. The grandchildren are going to make out like bandits.

Nick Eberstadt:

What is it going to mean for property values? What is the workforce going to look like? What's the life cycle of working going to look like? We probably have a thousand times as many economists on the planet today as we did in the 1930s, but I'm not sure that we've done as much serious thinking about what depopulation and low fertility are going to mean.

Larry Bernstein:

Social security and Medicare require having a lot of more kids in the future. When I started at Salomon Brothers in the 80s, most of the major corporations had used defined benefit plans and a couple of large firms went bust. And our society said, we screwed this up. We need to transition to a defined contribution plans. And today, 90 odd percent of all the American pension schemes are defined contribution. As you mentioned in 1930s when the economists were first thinking about this problem, when the pyramid was the precisely triangle with the top being with the elderly, and now it's being reversed. Pure economics means that the defined benefit programs at the national levels no longer are tenable, and we'll have to transition towards a defined contribution plan for the people.

The transition from defined benefit to defined contribution is going to feel like a raw deal for some people who got caught. But it is what it is. Societies want to help their elderly to the extent they can, and if they cannot, they won't. How should we think about these pyramids in the context of intergenerational transfers and the point I was making before about declining populations and intergenerational giving between the grandparent to the child. There is always this back and forth between the grandchildren and the grandparent, both within families of supporting and caring and then also taking care of them in their elderly periods.

Nick Eberstadt:

Fortunately, the United States and the world are richer than they've ever been before. And the more money you have, the more options you have in trying to deal with some of these questions. That said, the wealth that we are talking about isn't mechanically divided in a way across the entire population spectrum that we're talking about. There are a significant fraction of US homes and households that aren't going to be big inheritors. We have ginormous levels of public debt , which is going to make the whole question about depopulation without default a tricky one.

Larry Bernstein:

One of my favorite shows growing up was the Andy Griffith show, and in that family was Aunt Bee, who the hell was Aunt Bee? What was she doing there? Who was she even related to? How did she get to be such an important role in that family unit? And in my own family unit growing up, my paternal grandfather lived in the household after his wife passed, and it was great. I come home from school and Grandpa Marty was there waiting for me to make popcorn and watch the ball game together. You do not hear so much about Aunt Bee or Grandpa Marty in family units currently in the United States. You do hear in the African American community where they are single mothers that the maternal grandmother plays a critical role in the upbringing of that child. Tell us about family units as a different construct for analyzing this intergenerational pyramid as well.

Nick Eberstadt:

One of the big trends everywhere has been the trend towards independence and autonomy and for good or for ill. This means that the fastest growing household unit structure is living alone. Living alone works great until it does not. And then at that point, you must have some backup that you may or may not actually be able to count upon. It's going to come from your blood relatives, it's going to come from people that you're really close to. It's like they say in Ghostbusters, who are you going to call? That's going to be changing a lot with the revolution in the family. There's going to have to be an effective substitute for blood relatives because they’re going to be a growing number of people aren't going to have blood relatives.

Larry Bernstein:

You mentioned a 35-year-old woman in Japan, and I read a book recently about that cohort where this woman faces demands. She has to take care of her husband. She may have or may not have one child. She's responsible for her parents, but also for her husband's parents. And she is torn on how to take care of all these people.

Life expectancy in Japan has exploded, and there's elderly that must be taken care of. Someone has got to do that work, and it's been placed upon her to be responsible for that burden. And should we think about the tension between greater life expectancy and the implication for all societies is that we should see a collapse in TFR because they got to take care of another group of children, called their parents.

Nick Eberstadt:

Throughout East Asia, it looks as if the flight from marriage is really being driven by women, not by men. Women in Taiwan, Japan, South Korea, Hong Kong, say that they have got a raw deal.

Japan is the healthiest large population in the world, and life expectancy is continuing to increase in Japan and other countries. When you have got the fastest growing group in these societies in our society being the 80 plus group, there's rethinking what life should be like if the expectation is a hundred year lives.

Larry Bernstein:

I end each podcast with a note of optimism. What are you optimistic about kids?

Nick Eberstadt:

It is impossible to explain to somebody who does not have children how marvelous they are; it is like going from black and white to technicolor.

Larry Bernstein:

Thanks to Nick for joining us.

If you missed our previous podcast, the topic was The British Empire was a Source for Good. Our speaker was John Ellis who is the former Dean of the Graduate School at The University of California at Santa Cruz. He is also the author of a new book entitled A Short History of Relations Between Peoples: How the World Began to Move Beyond Tribalism.

John explained why this subject is verboten in American university classrooms, graduate work, and history journals. John discussed how British imperialism made the world a better place.

I would like to make a plug for our next podcast with Eugene Kontorovich who is a Professor of Law at George Mason and his father Vladimir Kontorovich who is a Professor of Economics at Haverford. The Kantorovich’s have observed an American Glasnost and that topics which were forbidden to be discussed can now be debated openly.

You can find our previous episodes and transcripts on our website whathappensnextin6minutes.com. Please follow us on Apple Podcasts or Spotify. Thank you for joining us today, goodbye.

Check out our previous episode, The British Empire was a Source for Good, here.

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