FUTURE POPULATION TRENDS

Transcription

1 Chapter 5 FUTURE POPULATION TRENDS Modified for EC 375 by Bob Murphy

2 Figure 5.1 World Population, Source: United Nations Population Division (2000). 2

3 Forecasting Population Tools: Age- specific survivorship func6on. Age- specific fer6lity func6on. Roll process forward to get forecast: Difficulty is predic6ng how mortality and fer6lity will change in future. 3

4 Figure 5.2 Population Forecasting 4

5 Forecasting Mortality In past, changes in mortality as important as changes in fer6lity. Increases in probability that a girl lived through childbearing years had large effects on NRR. Today, most girls live through childbearing years: 97% in U.S.; 82% in India, so linle scope for further effects. Increasing life expectancy does increase popula6on size, but small effect overall. 5

6 Forecasting Fertility Replacement Fer.lity: Approximately 2.1 for developed countries, bit higher for developing. Rich Countries: TFR < Replacement Fer.lity So without immigra.on, popula.on will shrink. Average age of popula.on will rise. But preferences/incen.ves may change. Could be a sta.s.cal illusion: Tempo Effect- - rise in average age of first birth 6

7 Forecasting Fertility Tempo Effect: Can explain decline in some countries but not others since effect is temporary. Difficulty of Forecas6ng Fer6lity: Example of Japan U.S. baby boom and baby bust: 1964: 4 million births Census Bureau predicted 5 million in : 3.2 million births. 7

8 Figure 5.3 Total Fertility Rate in Japan: Actual versus Forecast Source: Yashiro (1998). 8

9 Forecasting Fertility Poor Countries: Uneven decline in recent decades. Figure 5.1 uses baseline assump6on that developing world reaches replacement rate by But what happens if this is not correct? 9

10 Table 5.1 Fertility in the Developing World 10

11 Forecasting Fertility Change Assump6on: With constant TFR: Popula.on at 14.9 billion (vs. 9.4 billion forecast) in Popula.on at 57.1 billion (vs billion forecast) in 2100! Modest departure of 0.5 above replacement rate: Popula.on at 11.1 billion in Popula.on at 17.5 billion in Small differences maner a lot Why might we be skep6cal of baseline? 11

12 Figure 5.4 Income per Capita versus Total Fertility Rate Sources: Heston, Summers, and Aten (2011), World Development Indicators database. 12

13 Income and Fertility Income likely to be lower than levels associated with replacement fer6lity rates in the past. Example: Nigeria TFR of 5.6 in 2009, Forecast of 2.1 in Per capita income of $2034 in 2009, $4581 in 2050 (2% per year. Figure 5.1 shows TFR of 3.0 for this income level. But not impossible: Have seen some decline over.me in income levels associated with replacement fer.lity. Also, economic growth forecast may be wrong. 13

14 Demographic Momentum NRR = 1, doesn t immediately lead to zero popula6on growth. Number of children born depends on Fer6lity rate; And the number of women in their childbearing years. If number of women in childbearing years rises, even if fer6lity rate is constant, number of babies born will rise. This is known as Demographic Momentum. 14

15 Demographic Momentum A country with rapid popula.on growth and high fer.lity has many more young people than old. If experience a sudden drop in the NRR to 1.0: Number of babies born ini.ally declines. But number will rise as more women enter childbearing years. Eventually, demographic momentum wears off and popula.on growth is zero. Important for forecas.ng next few decades, but over long run key determinant of popula.on growth will be fer.lity. 15

16 Population Growth in the Very Long Run Argument against constant popula6on growth is power of compounding: 1% per year growth (< current rate of 1.8%) yields popula6on of 45 billion in 2200! And, popula6on of 1 trillion in 2512! How many people can Earth support? With breakdown of Malthusian model, we know very linle about long- term path of popula6on. 16

17 Figure 5.5 The Great Spike in World Population Growth 17

18 Economic Consequences of Demographic Change Effect from Slowdown in Popula6on Growth: Solow growth model. Effect from Aging of the Popula6on: Fewer workers compared with re6rees. Redistribu6on of World Popula6on: Shii toward poorest countries affects world growth rate. 18

19 Table 5.2 Average Annual Growth Rates of Population by Country Group 19

20 Slowdown in Population Growth Slowdown in less developed countries from 2.1% per year to 0.8 percent per year. Use Solow model to determine effect on per capita income: ss y i y = n + δ j ss j n i + δ where δ = 0.05, α=1/3. Use n = for i and n = for j, to calculate: y i ss y j ss = 1.11 α /1 α 20

21 Slowdown in Population Growth If instead, α=2/3, then: y i ss y = 1.50 ss j So, these countries would acheive higher per capita income as a result of the slowdown in population growth. But, population still will be increasing. Level will matter and possibly strain resources. 21

22 Aging of the Population Declining mortality and fer6lity will lead to an older popula6on: Median age will rise from 26.5 years to 36.2 years by Aging is relevant for economic growth: GDP/Workers versus GDP/Popula6on 22

23 Figure 5.6 Changes in the Age Structure of the Population, Source: United Nations (2002). 23

24 Aging of the Population 24

25 Figure 5.7 Working-Age Fraction of the U.S. Population, Source: U.S. Census International Database. 25

26 Aging of the Population Decline in the share of the popula.on that is of working age in U.S: From 60% to 54% over period 2010 to So, this will be reduce growth rate of GDP per capita. By contrast, from 1965 to 1985, the share increased from 51% to 59% and boosted growth of GDP per capita. Growth rate of fraction of population that works = /20 = or 0.5%. 26

27 Table 5.3 Some Cases of Population Aging 27

28 World Population Distribution Shii in distribu6on of popula6on across regions and countries. Shii toward countries that are the poorest: Share living in the currently more developed countries will decrease from 20% to 13% between 2000 and Share living in the currently least developed countries will rise from 11% to 20%. 28

29 Figure 5.8 Distribution of the World s Population Sources: Livi-Bacci (1997), United Nations Population Division (2000). 29

30 World Population Distribution Shii of popula6on toward poorer countries will lower the growth rate of world GDP per capita: Even if GDP per capita growth is same in rich as poor countries, the shii in popula6on toward poor means slower average growth overall. This is known as the composi6on effect and occurs because the balance of the world s popula6on is shiiing toward poor countries. 30

31 Table 5.4 The Composition Effect 31

32 World Population Distribution Shii in popula6on from currently rich to currently poor countries, doesn t mean that a greater share will live in poor countries in the future. Outcome depends on whether popula6on growth rates in of currently poor countries offsets the income growth taking place in these countries. 32