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Wednesday, October 08, 2003

The Great Connundrum: What Can Be Done About Fertility Decline?

My Money Files Column

Because the baby boomers have not yet started to retire in force and accordingly the ratio of retirees to workers is still relatively low, we are in the midst of a demographic lull. But short of an outsized acceleration of productivity to well beyond the average pace of the past seven years or a major expansion of immigration, the aging of the population now in train will end this state of relative budget tranquility in about a decade's time."
Alan Greenspan : Testimony in US Senate 11 February 2003

According to one commonly held opinion, economic theory tells us people invest in children as a protection for old age. Now this proposition may or may not be true, but I don't think we should simply accept it at face value just because some versions of economic theory claim it to be the case. I think why people choose to have children is an empirical question, even though, as we shall see, the reasons people give when asked may only provide a part of the picture.

The principal economic theory which informs our thinking about how many children we end up having is essentially the one originating in the school inspired by Gary Becker, which includes other writers such as Murphy and Tamura, Galor and Weil , Razin and Ben Zion, Barro, and most famously in recent years Robert Lucas. Now my basic problem with this entire school of thought is that they tend to take as a given what I would have thought remained to be established: that in deciding about children economic factors are paramount.

Really in some way or another all of this material goes back to Malthus. Malthus, it will be recalled, held that human populations, like other animal populations, have an innate tendency to increase their numbers exponentially if not held in check by specific restraints. The exponential part is important here since it essentially means that the more people of child bearing age you have the more children you produce, whilst the less you have the less you will produce. For Malthus, as for any demographer, there are only two ways in which population growth rates can change, either through a change in death rates, or through a change in birth rates. As a consequence Malthus argued that the tendency for population numbers to explode was held in check in human societies by the existence of a combination of what he called positive and preventive checks. The positive - or natural - checks are simple enough to understand: for any given population a small increase in living standards will cause the survival of more children, and this increase in population can and will only be maintained should the increase in living standards prove permanent and sustainable - if not a combination of war, plague, pestilence, famine will soon bring numbers back down again. Thus population increase was dependent on the rate of technological change, and since pre the industrial revolution this was slow, then so was the rate of population increase. Malthus's preventive checks - or what he termed 'moral restraint' - are any conscious checks on reproductive activity exercised either individually, or via collective social processes, which limit the number of children per woman. The most important of these checks is variation in the marriage age, and such 'preventive' checks are are often to be found in societies pre-industrial societies and prior to the arrival of the demographic transition.

Curiously enough, and despite the fact that Malthus's ideas would later have considerable influence over Darwin, he never seriously entertained the view that human fertility might be regulated by natural, biological mechanisms, since if such natural feedback mechanisms existed, and birth rates tended to declined naturally as populations grew and resources became more limiting, then exponential growth would slow, and his 'principal of population' would not hold. Putting this another way, for Malthus there were no 'natural' feedback mechanisms to control fertility, such mechanisms only operated by an effect on mortality. This carries with it the implication that such natural regulators as the lactation (or breast feeding) effect (so called because there is a delay in the return to reproductive activity associated with an extended period of breast feeding), or pressure on diet which affects ovulation, are not prime movers in fertility.

Modern anthropological research however, and most notably starting with the work of the French demographer Louis Henry in the 1960's, has begun to open up another dimension in this story. Henry in fact took an unusual step: he considered only the fertility of married women in pre-modern societies. In examining only the fertility of married women he considered human fertility uninfluenced by societal regulation, by social conventions or by conscious decisions. What Henry found was something quite different from what Malthus might have anticipated. He found a twofold spread in the overall fertility levels among the natural fertility populations, a range that has been expanded to more than fourold in the decades since, as the list of natural fertility populations has grown. In particular the lowest natural fertility populations fall comfortably within the range of controlled fertility populations. Thus the basic Malthusian assumption that human fertility would be uniformly high in the absence of deliberate societal and individual control was clearly incorrect. Much could be said about this and subsequent work, but the point I want to stress and extract is that fertility varies substantially across societies, and for reasons which have little to do with conscious individual decision making processes.

Looking at the other end of the scale, at our contemporary fertility problems, a number of studies of women in modern societies have found a relation between exercise related high-energy-flux, dietary input and regularity and suppression of ovarian function. Put another way, even in our modern societies we can find natural (biological) consequences of lifestyle and diet which feed back into fertility. Peter Ellison, whose book 'On Fertile Ground' has been of enormous help to me in understanding what ‘fertility’ in fact means, puts it as follows:

"Together these field studies demonstrate that human ovarian function varies with energetic stress in similar and predictable ways across a broad range of ecological, geographical, and cultural settings. The pattern of variation in ovarian function we observe in response to the energetic constraints and consequences of local subsistence ecology in places like the Congo, Nepal and Poland are similar to the patterns we observe in Boston women in more idiosyncratic circumstances. The consistency of the relationship between energetic condition and ovarian function suggests that it is a general feature of the reproductive biology of our species. The fact that ovarian function varies in a quantitative, dose-response manner across a range of levels of energetic stress that are typically encountered by human beings in the course of their daily lives suggests that it represents functional modulation and not pathological failure of homeostasis in the face of extreme or unusual stress."

Curiously enough this finding does fit fairly comfortably into many of our modern nature/nurture arguments, since it seems clear that one part of our-make up is natural, in that we do have a genetic and biological evolutionary heritage, while at the same time we are cultural, social animals, governed in part by our own history and conventions and in part by our own conscious decisions. Neither the one part nor the other determines us absolutely as individuals.

What I am trying to say here is that you cannot treat fertility simply as an economic issue. How we live, and the rules and conventions we make also influence our fertility, regardless of the individual aspirations we may have as to the numbers of children we want. So effectively, in fertility, there is an economic component, a social component, and a natural component. Hard as we try, it seems it is impossible to reduce fertility to any one of these in isolation. Possibly with the development of more holistic, 'ecological'', systems-based models we may achieve a better understanding of the processes at work, but even were such models to exist it is not hard to see why there still would be no evident 'short term' policy solutions available to our fertility problems.


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