Not everyone of working age contributes equally to supporting the dependent population. Better-educated people are more productive and healthier, retire later and live longer. Education levels in most places have been rising and are likely to continue to do so. Using projections by age, sex and level of education for 195 countries, the demographers conclude that the highest welfare would follow from long-term fertility rates of 1.5-1.8. That excludes the effects of migration: for countries with many immigrants, the figure would be lower.
Educating more people to a higher level will be expensive, both because of the direct costs and because the better-educated start work later. But they will contribute more to the economy throughout their working lives and retire later, so the investment will pay off. Moreover, fewer people will help limit future climate change.
All this suggests that worries about falling populations are better addressed by education than by baby bonuses or tax breaks. But population policies are not all about rational economics: the world pays more attention to populous countries with sizeable armies than small ones without them. And countries that feel under threat tend to look for safety in numbers. It is no accident that, almost alone among developed countries, Israel has a fertility rate well above replacement level, at 2.9.By
- The Economist, “Why shrinking populations may be no bad thing”