Monday, December 31, 2012

China's Demographic Time Bomb

In a place where individuals saved for their own retirement, such as Europe, population decline is of little concern to the elderly.  In China, however, where children are expected to provide for their elders, previous generations used to hedge their bets for retirement by having as many children as possible.  This led to explosive population growth until the introduction of China's one-child policy, which cut birth rates dramatically.
The one-child policy does not necessarily limit Chinese families to one child- fines are applied for every subsequent child.  Because of the increased expense of each child, and because that single child is expected to have the economic resources to provide for both parents in their old age, the parents often invest what the money they can into improving their child's earning potential, often by sending them to America or Europe for college.  A growing trend among these expatriate Chinese students is to stay in the West because of government oppression and limited opportunities back in China.  This has helped to solve the youth deficit in places like Europe, but it has only exacerbated the Chinese ,demographic situation, because many times the young immigrants cut ties and do not send money back to family in the old country.
In some ways, Chinese youth are saddled with the same financial burdens to their elders as Western youth, but the two situations differ in that in China this is not so much entrenched in public institutions as in a system of individual honor.  However, the decline of traditional Confucian values and growing influence of Western individualism has led many young people to feel that it is no longer their duty to care for their elders.  In short, the worst case scenario has happened for a large part of the elderly population in China, and the significant investment that they have poured into their children may not even be repaid.
European retirement programs have the illusion of lifting the burden of paying for retirees off the shoulders of the young, but in reality the young will be the group most hurt by these policies.  The debt has simply been made public- in which case the young, who are the most productive members of society, will still be taxed and will likely pay just as much as they did before.  One main benefit of the European retirement system as opposed to the Chinese system is that children are forced to help their parent financially.  A major negative aspect of it, however, is that the children of parents who were responsible enough to pay for retirement will still have to pay is if their parents had been irresponsible.

Friday, December 28, 2012

Rural Decline in America

For decades, an important shift has been underway in the ethnic and geographic composition of the United States population.    Massive waves of fresh immigrants from abroad, as well as internal migrations, changing birthrates and an aging population promise to fundamentally alter the nature of the country.  Whether American society will be able to effectively adapt to these changes remains to be seen.  In order to effectively plan for the future, both citizens and leaders must educate themselves on these demographic shifts.

Many rural areas have been experiencing a population drain as professionals, educated people, and the young leave for the cities.  Urban areas often offer jobs and amenities that rural areas and small towns generally lack.  Market consolidation by corporations based in the cities has begun to crowd out the small businesses that have traditionally been the center of economic life in small towns.  Simultaneously, the rapid expansion of factory farming has led to a decrease in the demand for agricultural labor and many family farms have been put out of business as a result.  For the countless unemployed, the only solution is to pull up roots and move to the city.  It is often the case that jobs simply cannot be found outside of the cities.


Because people that grew up in the country often have difficulty dealing with the noise and crowding of the city, they usually move to the suburbs and commute to work.  This arrangement is frequently touted as offering the best of both worlds, but suburbs are well-known to be subject to severe problems of "place."  Frequently, suburban residents of rural extract feel alienated in the suburbs, which are usually made up of people with urban or suburban backgrounds who tend to have radically different values, beliefs, and ideas.

As a result of migration from rural areas, many small towns are in decline.  The flight of young people has left these populations depleted and elderly.  As a result, the birthrate in small towns and the country is on the decline.  Without anything to attract the young, many of these formerly prosperous communities are set to become ghost towns.


Wednesday, November 14, 2012

Population Growth: Young Population and High Fertility

Graph: world population growth 1750-2150In many parts of the world, population has skyrocketed in past years.  There is a strong correlation between the existing level of development in a country and a country's population growth rate.  As countries become more developed, birth rates tend to decline, whereas countries that remain relatively underdeveloped retain higher birth rates.  As countries become more developed, their set amount of resources naturally present becomes capable of supporting a greater number of people, whereas in undeveloped countries the amount of resources naturally present is capable of supporting a much lesser number of people.  

Ironically, those countries with the highest capacity to accommodate new people tend to have the lowest birthrates, and that those regions with the lowest capacity to accommodate new people tend to have the highest birthrates.

In the past, discrepancies between population growth resource distribution have led people to migrate en masse.  A prime example of this is European immigration to the United States in the 1800's and 1900's.  The population of Europe had exceeded the resources available in the region, and declining standards of living caused people to cast their eyes elsewhere.  Relatively open immigration policies and a surplus of resources relative to the existing population made the United States a popular destination for immigrants.  Allowing immigrants to flow from areas of low resources to areas of high resources led to positive economic results for both the host nation and the donor nation.  Immigration can simultaneously provide solutions to two problems: a host nation's large proportion of underdeveloped resources in proportion to its existing population, and a donor nation's low proportion of resources in proportion to its existing population.


Monday, November 12, 2012

Population Decline: Aging Population and Low Fertility

As a result of declining fertility rates and lengthened life expectancy, the population of the world will inevitably age in the future.  Because this trend is already present in many of the European nations, we can look at demographic shifts in Europe and project similar patterns onto other regions of the world for a plausible view of their future. 
The significance of the aging population of Europe only becomes clear with historical context.  At the end of the Second World War, the nations of Europe built up enormous social welfare systems.  Many of these programs, specifically benefits for the elderly, were put into place with the assumption that the population would continue to grow so that the young people who put money in would always outnumber the old people who took money out.  For the greater part of the century, they were right; population growth kept the system running smoothly.  
In the nineties, however, the populations of major European countries began to experience a declining birthrate.  The reasons for this are still hotly debated.  As a result, many countries in Europe have begun to import young immigrants to make up for the youth deficit.  However, since the Eurocrisis and the subsequent downturn of the European economy, the continent has become a less attractive place for skilled immigrants.  The shortage of skilled labor is enough to pose major challenges to the economy itself, which in turn will further lower the birthrate and discourage the migration of skilled labor.