Rethinking the Dependency Ratio
May. 3rd, 2021 01:00 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
walkitoutThere is a sort of core set of tenets of modern demography and societal structure that goes like this.
Once upon a time, people had a lot of kids, and a lot of them died before reproducing, and then the parents died comparatively young. This combination resulted in population growth, but not necessarily super fast.
Then, a series of changes — and there are a LOT of arguments about which changes matter the most, but clean drinking water and better sewage handling as a package are pretty clear winners in every list — happened that resulted in people living a lot longer. ALL people. Kids survived to become adults and have children of their own. Parents stuck around to become grandparents and sometimes great-grandparents. And the women — lots of argument about this process — started having fewer kids, once it was clear they were all going to live (lots of debate about what target number of kids the women were aiming for, also).
So for a period of time, different by country / region in when the process started and when it more or less was complete, a society evolved from having a lot of kids around vs. the number of working adults, but not very many very elderly people who required substantial care, to a society with a small number of kids and a Metric Moose Load (™) of working adults (the last big group of kids, grown up), but still, not that many elderly people.
The “more or less” complete part is tricky, because for a long time, demographers had this idea that women were going to suddenly decide to start having more kids again, and it has been a bit of a scramble to reassess and figure out what things look like when that ... does not happen. Some societies went through the process in a very compressed time frame; others it was more gradual. Some societies just flat out stopped having kids (Italy, Japan); others just dropped down to a little below replacement and hung out there. And the number of Very Olds is variable for reasons which will be left as an exercise for the reader. In any event, economists tend to think of the Lots of Workers, Few Kids, Few Olds as the “Demographic Sweet Spot”, because they are focused on the non-reproductive economy.
Obviously, that range of human activity which is devoted to reproduction (to have another generation of people) is far, far greater than the non-reproductive economy. Some elements of it (hospitals where babies are born, public schools, paid formal child and elder care, nursing homes, the funeral industry) are part of the official, formal measurement of economic activity. But most of it still isn’t. And the part that isn’t is pretty clearly much larger than the formal measurements of non-reproductive economic activity, and _may_ be larger still than the entire formal economy, including the parts which are reproductive (hospitals, schools, elder care).
Every time a component of the reproductive economy moves from the informal, unmeasured realm of human activity to the measured realm of economics, the economic measurements “suffer”. And every time women are freed up from their reproductive activities (kids in school, women engage in formal, paid employment), economic measurements “benefit”. This is absolutely bonkers, and it’s one of the many reasons why I try not to talk about economics with most people because as near as I can tell, economists continue in blissful failure to realize these basic truths.
The shift in demographics to what will likely become a steady state (roughly flat age distribution, instead of an age pyramid — I mean, there will be a little slope, because unfortunately people do die before they die of being Old, but very little slope) is going to require us to recognize the activity associated with Not Engaging in Full Time Paid Employment in the Formal Economy. And I really think this is going to be amazing in so many ways, but a whole lot of people don’t really want to write about it, and when they do, they say breathtakingly awful things. The “dependency ratio” — explicitly relating the number of people too young to participate in the formal economy as workers plus the number of people too old to be of “prime working age” in the formal economy — is the breathtakingly awful in its purest form. But efforts to “fix” that ratio bring in lots of other awful, so it is hard to rank where the Worst of the Worst really lies.
Here is something that is NOT breathtakingly awful:
https://www.brookings.edu/blog/future-development/2020/10/26/rethinking-aging-societies-growing-young-as-you-get-old/
I’ll try to find more.
Once upon a time, people had a lot of kids, and a lot of them died before reproducing, and then the parents died comparatively young. This combination resulted in population growth, but not necessarily super fast.
Then, a series of changes — and there are a LOT of arguments about which changes matter the most, but clean drinking water and better sewage handling as a package are pretty clear winners in every list — happened that resulted in people living a lot longer. ALL people. Kids survived to become adults and have children of their own. Parents stuck around to become grandparents and sometimes great-grandparents. And the women — lots of argument about this process — started having fewer kids, once it was clear they were all going to live (lots of debate about what target number of kids the women were aiming for, also).
So for a period of time, different by country / region in when the process started and when it more or less was complete, a society evolved from having a lot of kids around vs. the number of working adults, but not very many very elderly people who required substantial care, to a society with a small number of kids and a Metric Moose Load (™) of working adults (the last big group of kids, grown up), but still, not that many elderly people.
The “more or less” complete part is tricky, because for a long time, demographers had this idea that women were going to suddenly decide to start having more kids again, and it has been a bit of a scramble to reassess and figure out what things look like when that ... does not happen. Some societies went through the process in a very compressed time frame; others it was more gradual. Some societies just flat out stopped having kids (Italy, Japan); others just dropped down to a little below replacement and hung out there. And the number of Very Olds is variable for reasons which will be left as an exercise for the reader. In any event, economists tend to think of the Lots of Workers, Few Kids, Few Olds as the “Demographic Sweet Spot”, because they are focused on the non-reproductive economy.
Obviously, that range of human activity which is devoted to reproduction (to have another generation of people) is far, far greater than the non-reproductive economy. Some elements of it (hospitals where babies are born, public schools, paid formal child and elder care, nursing homes, the funeral industry) are part of the official, formal measurement of economic activity. But most of it still isn’t. And the part that isn’t is pretty clearly much larger than the formal measurements of non-reproductive economic activity, and _may_ be larger still than the entire formal economy, including the parts which are reproductive (hospitals, schools, elder care).
Every time a component of the reproductive economy moves from the informal, unmeasured realm of human activity to the measured realm of economics, the economic measurements “suffer”. And every time women are freed up from their reproductive activities (kids in school, women engage in formal, paid employment), economic measurements “benefit”. This is absolutely bonkers, and it’s one of the many reasons why I try not to talk about economics with most people because as near as I can tell, economists continue in blissful failure to realize these basic truths.
The shift in demographics to what will likely become a steady state (roughly flat age distribution, instead of an age pyramid — I mean, there will be a little slope, because unfortunately people do die before they die of being Old, but very little slope) is going to require us to recognize the activity associated with Not Engaging in Full Time Paid Employment in the Formal Economy. And I really think this is going to be amazing in so many ways, but a whole lot of people don’t really want to write about it, and when they do, they say breathtakingly awful things. The “dependency ratio” — explicitly relating the number of people too young to participate in the formal economy as workers plus the number of people too old to be of “prime working age” in the formal economy — is the breathtakingly awful in its purest form. But efforts to “fix” that ratio bring in lots of other awful, so it is hard to rank where the Worst of the Worst really lies.
Here is something that is NOT breathtakingly awful:
https://www.brookings.edu/blog/future-development/2020/10/26/rethinking-aging-societies-growing-young-as-you-get-old/
I’ll try to find more.