Thursday, 2 July 2009

The link between female employment and fertility rates

One of the most significant social issues in Japan and a topic of extensive soul-searching is the declining birthrate. The population in that country has now reached a point where it is not replacing itself and this leads to massive concern about what will happen in the future. However, while living in Japan it also became very clear to me that Japan's awful working culture seemed to have much to do with this. It is very difficult in Japan to be a working mother, and as the economic situation has deteriorated it has become more and more difficult for a family to get by on one income.

A recent special report in the Economist explores the issue of aging populations and declining fertility levels. In New Zealand, which has a relatively youthful population and good levels of immigration it is difficult to imagine the angst that this topic causes in countries such as South Korea, Italy and Japan. What does the Economist say is the reason for the decline?
[Florian Coulmas] reckons that the only way Japanese women can manage their difficult lives is by postponing marriage and having fewer, if any, children. Because of the country’s culture of long working hours, husbands with good jobs spend little time at home and expect their wives to cope with all domestic tasks. No wonder that 70% of Japanese women stop work when their first child arrives. If they return to it at all it is usually much later, and then mostly to badly paid and unchallenging part-time jobs. By then they may already be caught up in another domestic bind: looking after their husband’s old parents.
This is not just something being seen in Japan.

Japan is an extreme example, but many other rich countries have similar problems. One reason why there are fewer babies is that women everywhere are marrying and having children much later in life. Between 1970 and 2000 the mean age at which women had their first child in a range of OECD countries rose by more than a year every decade, and many more women now have their families in their 30s. The question is whether they have the same number of children as before but later, or whether they will have fewer overall.

Anna Cristina d’Addio, an expert on fertility policy at the OECD in Paris, thinks they will probably have fewer children in total than if they had started earlier, even though more of them now give birth in their 40s. Surveys show that women generally start off wanting bigger families than they end up with. If the children do not start arriving until later in life, there is less time to reach that ideal number. And once people have got used to smaller families, the number of children they say they want shrinks too. Demographers talk about a “low-fertility trap”.

The good news is that there is a proven solution to this problem: high female employment and high fertility do go together.
For a while birth rates were lower in countries where lots of women worked outside the home, but more recently that trend has been reversed: higher fertility and higher employment rates for women go together.

That may not be as counter-intuitive as it seems. In a modern society children are an economic liability, not an asset. They have to be fed, clothed, housed, looked after, educated and entertained. As a rule of thumb, economists reckon that a family with one child needs 30% more income than a childless couple to maintain the same living standard. The obvious way to keep the household financially afloat is for the mother to go out to work.

If governments anxious to rejuvenate their populations want her to do that, they can help in a number of ways. Extensive research in 16 OECD countries has shown that there is a strong correlation between high female employment rates and large government cash transfers to families, generous replacement pay during parental leave, the availability of plenty of part-time work and lots of formal child care. Where all these things are present, fertility rates tend to go up. France and most of the Nordic countries have embraced such policies and been rewarded with a rise in fertility close to replacement level. It does not come cheap: the OECD reckons that they spend 3-4% of GDP on direct benefits to families, far more than do Germany, Japan and southern Europe.

Full article here.


Hugh said...

What I don't understand is why a shrinking population is considered a bad thing.

True, it leads to a reduced tax base, but it also leads to a reduced demand for the government services which are paid for from that tax base, so as far as I can see it's not a big deal.

This whole 'our country can't get smaller' seems to be rooted in 19th century thinking.

Tidge said...

What Hugh said. + it's pretty widely acknoeldged that we are overtaxing our natural resources, and have far more people than the planet can actually sustain. Granted, the main problems with overpopulation seem to be in 3rd world countries, but there's nothing wrong with developed nations cutting back on the baby-making too. I actually find people who have large families (say, over 3) somewhat irresponsible. I don't want their choices to be restricted, but in no way do I understand or agree with their choice. Let the flaming begin.

katy said...

The problem is that the declining population is combined with an aging population. It takes a certain number of working people to support each of those who isn't; obviously there will be trouble it the working population is shrinking as this is what our societies are based on. The "reduced demand" argument doesn't apply because those who aren't working such as the elderly require more support (health etc). To be honest this is one reason we decided to leave; it is very difficult to believe that the system won't implode some time soon as all this additional pressure is put on it.

katy said...

The effects of an aging world:

"Whether all that attention has translated into sufficient action is another question. Governments in rich countries now accept that their pension and health-care promises will soon become unaffordable, and many of them have embarked on reforms, but so far only timidly. That is not surprising: politicians with an eye on the next election will hardly rush to introduce unpopular measures that may not bear fruit for years, perhaps decades.

The outline of the changes needed is clear. To avoid fiscal meltdown, public pensions and health-care provision will have to be reined back severely and taxes may have to go up. By far the most effective method to restrain pension spending is to give people the opportunity to work longer, because it increases tax revenues and reduces spending on pensions at the same time. It may even keep them alive longer. John Rother, the AARP’s head of policy and strategy, points to studies showing that other things being equal, people who remain at work have lower death rates than their retired peers.

Younger people today mostly accept that they will have to work for longer and that their pensions will be less generous. Employers still need to be persuaded that older workers are worth holding on to. That may be because they have had plenty of younger ones to choose from, partly thanks to the post-war baby-boom and partly because over the past few decades many more women have entered the labour force, increasing employers’ choice. But the reservoir of women able and willing to take up paid work is running low and the baby-boomers are going grey.

...And if fertility in ageing countries does not pick up? It will not be the end of the world, at least not for quite a while yet, but the world will slowly become a different place. Older societies may be less innovative and more risk-averse than younger ones. By 2025 at the latest, about half the voters in America and most of those in western European countries will be over 50—and older people turn out to vote in much greater number than younger ones.

...Even so, the shift in the centre of gravity to older age groups is bound to have a profound effect on societies, not just economically and politically but in all sorts of other ways too. Richard Jackson and Neil Howe of America’s CSIS, in a thoughtful book called “The Graying of the Great Powers”, argue that, among other things, the ageing of the developed countries will have a number of serious security implications.

For example, the shortage of young adults is likely to make countries more reluctant to commit the few they have to military service. In the decades to 2050, America will find itself playing an ever-increasing role in the developed world’s defence effort. Because America’s population will still be growing when that of most other developed countries is shrinking, America will be the only developed country that still matters geopolitically.

Tom Semmens said...

"...the ageing of the developed countries will have a number of serious security implications..."

I think this is pretty much wishful thinking. This isn't really the place for giving to much of a military history lesson but it is important to understand the trends.

One hundred years ago a company of soldiers had around 200 men in it with a bolt action rifle and bayonet each. The officer might also have had a sword and a pistol. Today an infantry company comes with all sorts of incredibly varied arsenal, automatic weapons of every shape and size, fire and forget missiles, rocket launchers, grenades, mortars, you name it. And it is all linked digitally into a computerised net that makes them more accurate and lethal than we can imagine.

Numbers no longer count for much, except to give huge body counts when one side (usually ours) has the firepower and the other has the man-power. Korea in the early fifties cost the US/UN around 55,000 dead; the NKPA & CCF around 1.5 million. Vietnam was similar - 60,000 or so US vs. up to three million VC/NVA. Iraq is displaying similar trends.

The point I am making is that actual numbers of humans engaging in western-style warfare has been dropping steadily since WW1. The history of war fighting since 1914 is really the story of the rise and rise of robot weapon systems, and arguably it is this trend combined with the smaller, largely mercenary professional armies that these robot weapons allow which has seen the re-emergence of an appetite for military adventures in Western powers.

A Nonny Moose said...

I'm with Hugh and Tidge - I'd rather see population growth slow down too. Less competition for natural resources, positions within society (school and employment), and health systems.

Yes, in the short term (up to 50 years) there is going to be a shortfall, weighted in health and pension. I'm willing to deal with it for a whole lot of evolutionary "I told you so" - if humans can learn from 150-200 years of unsustainable population growth, the better result will come on the other end.

Have more babies to look after our elders? Yeah, there's a great excuse. You got yourself into it, figure a way out of it. That's my simplistic rhetoric for "science and medicine will be forced to catch up, by diverting attention and money away from ridiculous innovations like hair loss and virility, to life medicine that really counts".

A Nonny Moose said...

PS: It may also have the flow on effect of turning society's attention away from the youth-obsessed focus (beauty, sexuality, celebrity), if older generations are more valued to be contributers.

katy said...

A Nonny Mosse, it is interesting to try and imagine what our society would look like if it is largely older. As the article quoted stated, this is not something that humans have ever experienced before! Obviously some societies (Confucian-based ones such as China and Japan being an example) value older people much more than others (such as ours) and this value came before because older people were rare and therefore a significant source of knowledge.

Anyway, the implications for women (who still do most of the caregiving) is something interesting to consider too. The Economist article mentions that now women in Japan stop working to care for kids and then when the kids are grown find themselves caring for older relatives (who still largely share the home of their family); it makes sense to let hubby continue his career I guess.

Anonymous said...

A culture that doesn't replace itself gets replaced.

Look at which cultures in all these country's are the fastest growing and you will see the future for that country.