Economic development and population

Generally women in developed economies have lesser children per head than in developing economies. As economic development gets going, a demographic transition takes place, the number of children borne by a woman over her life, the fertility rate, over time drops from around eight to near one and a half, below replacement level.

In most cases this is combined with longevity; people living longer with longer life expectancy resulting from more stable societies, with less violence, better healthcare and nutrition. This results in a rapidly ageing population, like for example Japan.

Such a situation would create huge labour market issues, answered in most situations by liberal migration which allows job seekers to enter the economy as immigrants. In addition, this results in the number of retired individuals, not active in the work force, who will have to be supported by each person of working age will increase. We have seen this phenomena happening in the developing world today, and seen Sri Lankans seeking employment in developed countries as a result.

Sri Lanka’s demographic transition

Sri Lanka’s demographic transition is apparent in that in 2001, while the number of persons under 15 years was 26.3% of the population, 64.5% was between the ages of 15 and 59 and 9.2% was above 60 years.

On present trends by 2011, children under 15 will be 22.8%, those between 15 and 29 – 64.7% and over 60s – 12.5%. Twenty years later, in 2031, children under 15 would constitute 16.1%, those of working age between 15 and 59 63.2% and retirees 20.7%. 50 years later, in 2061, children under 15 would only constitute 14.4%, those of working age between 15 and 59- 54.3% and retirees – 31.3%.

That is, 54.3% of people active in the economy would have to support a total of a 45.7% economically-inactive cohort. And this, remember, is with low economic growth. With a higher rate of growth, the transformation and the disparity between the numbers of people working to support the pre workers and the retirees should be higher.

Economically active population

Where parents are better off economically and child survival rates are high, they tend to have a lesser number of children, and where longevity has not kicked in, due to nutrition and healthcare deficits, there could be a demographic dividend, the size of the working age economically productive population increases, due to fewer children and since the grandparents generation has already died off.

Such a fast growing economically active population provides an impetus for labour intensive industrial production, as we have seen in China and the ‘East Asian Miracle’.

On the other hand, a disproportionately high youth population, devoid of economic opportunities, which they aspire to, combined with a dearth of elders, can result in too many young hot heads and not enough mature people to guide them. This could lead to social unrest and violence, as in Sri Lanka in 1971, 1976 onwards in the north and east and in 1989.

However, recent research by Dr. Mikko Myrskyla of the University of Pennsylvania published in the Nature magazine has suggested that as development continues this demographic transition goes into reverse.

Dr. Myrskyla compared two sets of criteria. One was the number of children that would be born to a woman if she experienced the age specific fertility rates applicable to her country during a relevant time frame. The other was the Human Development Index (HDI) for that country.

This is a measure used by the UN to measure human development, having three measures: Life expectancy, average income per person and level of education. The maximum possible value of HDI is one.

Statistically, around 1975, no country, out of 107 studied, got anywhere near a score of one. The best was Canada with 0.89. By 2005, 24 of those originally looked at had HDI indicators above nine. The fertility rate fell as the HDI rose.

Strange change

However by 2005, a strange change had taken place – in many countries with a high rate of HDI, the fertility rate was increasing, approaching two children per woman. This would require a fundamental change in one of the underlying principles of development planning – that fertility rates will keep falling, as countries become richer.

The fact that statistically fertility rates drop as HDI increases, can be explained by the increasing ability of women to control their own fertility with better healthcare and related services, more women entering the work force and the increasing cost of raising children in an expensive environment, etc.

But how does one explain the later increase of fertility, as Dr. Myrskyla’s research shows, after a threshold of development is reached?

One possible explanation is that there are fundamentally two options for reproduction for any species – one is to churn out offspring in large numbers and hope that in a Darwinian way, the fittest will survive the competition for mates and resources over their peers. The other option would be to have only a few progeny and to dote on them, ensuring that they grow up with the best of nurture and education that money can buy, to equip them for the struggle for survival.

The former option, is characteristic of a species that live in an unstable environment, while the latter reflects the model for a species living in a more predictable, stable and orderly context.

It is when the living environment, that is the status of development and economy moves even beyond one of mere stability and predictability – to one of super abundance and high level prosperity can parents afford to have more children, without compromising the quality of life they can offer to the children they already have, can the level of fertility Dr. Myrskyla’s research has discovered, be achieved. This is a possible answer.

Increase of fertility

Recent research on Sri Lanka’s demographics further clouds the issue. The 2006/07 Demographic and Health Survey reported that the fertility rate for 2004 / 07 were 2.3. The same survey for 2000 showed a fertility rate of 1.9 for the time frame 1995 /2000.

As Dr. Myrskyla’s study showed, fertility drops as HDI increases but picks up again when a ‘super abundance’ level lifestyle is reached. But the current increase in Sri Lanka is in the midst of an economic slowdown and worldwide recession. Are there factors other than super abundance and economic stability which triggers an increase of fertility?

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)