Call Me Back - with Dan Senor - From Baby Boom to Baby Bust - with Nicholas Eberstadt

Episode Date: December 31, 2021

China is poised to pass one of the great demographic inflection points” – that’s according to the Financial Times. The inflection point the FT is referring to is that of diapers for the elderly growing into a larger market than diapers for infants. China won’t be the first. As far back as a decade ago in Japan, adult diapers started outselling infant diapers. What does that tell us about demographics, not just in China, but about the developing world as a whole? We are in the midst of a larger global trend that has not received enough attention: crashing fertility rates and shrinking populations. According to forecasts by an international team of scientists published last year in The Lancet, the world population will peak at 9.2 billion around 2065, and then drop to 8.8 billion by the end of the century. That’s a stunning difference -- if you take into account that in the 20th century world population grew 600%, from one billion to six billion. The Lancet study also found what the lead scientist for the project called a “jaw dropping” result: the population of twenty-three countries -- including Japan, Italy, Spain, and Thailand -- would drop by at least half by the end of the century. The U.S. and the rest of Europe are also headed for a worrisome situation. This is a trend that will have far-reaching implications for the 2020s. It will impact economics, geopolitics, culture…it could radically change the very nature of how our societies are organized. To get a crash course on the issue, we invited someone who has been screaming from the hilltops about this trend for a long time. Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute (AEI), where he researches and writes extensively on demographics and economic development generally. His many books and monographs include “Poverty in China”, “The Tyranny of Numbers”, “The End of North Korea”, “The Poverty of the Poverty Rate” and “Russia’s Peacetime Demographic Crisis”. His latest book is “Men Without Work: America’s Invisible Crisis”. Nick earned his PhD and masters degree in political economy from Harvard, and a Master of Science from the London School of Economics.

You and I, and I think almost all of your listeners, are children of the 20th century, so we're children of the population explosion. And it was just about a quadrupling of human numbers between 1900 and the year 2000, as best we can estimate it. But this explosion wasn't caused because people suddenly started breeding like rabbits. It happened because they finally stopped dying like flies. China is poised to pass one of the great demographic inflection points. That's according to the Financial Times. The inflection point that the Financial Times is referring to is that of diapers.

Yes, diapers, not for infants, but for the elderly, which are going to start outselling those for babies. What does that tell us about demographics, not just in China, but about the developed world as a whole? We are in the midst of a larger global trend that has not, at least in my view, received enough attention. That is, crashing fertility rates and shrinking populations. According to forecasts by an international team of scientists published last year in The Lancet, the world population will peak at 9.2 billion people around 2065, and then drop to 8.8 billion by the end of this century.

That's a stunning difference if you take into account that in the 20th century, world population grew 600% from 1 billion to 6 billion. The Lancet study also found what the lead scientists for the project called a, quote, jaw-dropping result. The population of 23 countries, including Japan, Italy, Spain, and Thailand, would drop by at least half by the end of the century. The U.S. and the rest of Europe are also headed for a worrisome shrinking population situation. I think this is one trend that will have far-reaching implications for the 2020s. It will impact economics, geopolitics, culture.

It could radically change the very nature of how our societies are organized. To get a crash course on the issue, we invited someone on the podcast who has been screaming from the hilltops about this trend for a long time. Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute, where he researches and writes extensively on demographics and economic development generally. His many books and monographs include Poverty in China, The Tyranny of Numbers, The End of North Korea, The Poverty of the Poverty Rate, and Russia's Peacetime Demographic Crisis. His latest book is Men Without Work, America's Invisible Crisis. Nick earned his PhD and his master's degree in

political economy from Harvard and a master of science from the London School of Economics. Nick is perhaps most famous for a book review he wrote as an essay in the New York Review of Books in 1981 about the looming health crisis in the former Soviet Union, where he was the first to truly identify declining life expectancy in the Soviet Union and what it foretold for the Soviet Union's future collapse. Early warning, this is one of our wonkier episodes, but stick with us as I learned a lot from it and I hope you will too. This is Call Me Back. And I am pleased to welcome Nicholas Eberstadt from the American Enterprise Institute, widely, highly prolific writer and thought leader on a whole range of issues which we'll get into. But Nick, thanks for joining the

podcast. Hey, thanks for inviting me, Dan. So Nick, I think our listeners would be interested in, before we get into the substance of today's, the focus of today's conversation, the range of areas you've become a real recognized authority and thought leader on. I know plenty of people who are geopolitical strategists that don't spend much time thinking about fertility rates. And I know plenty of demographers who don't spend much time thinking about the future of North Korea. So how do you pick these areas of focus? How do you pick your poison to kind of delve into? Well, I guess the short answer is that I've got a short attention span, right? I've got to look at a lot of different things to keep me interested. This very slightly longer answer is it's kind of like

fun with a purpose. I've got a toolkit and I try to apply it to problems where I see a possibility for the extension of human choice. North Korea is the most unfree society in the world and the most closed society. And so trying to crack it open in terms of its statistics and so forth is kind of for a numbers nerd like trying to climb K2 or something. But with other sorts of more easily accessible areas, it's just a question of where we can illuminate what are actually kind of moral problems with statistical techniques. Okay.

So let's now zero in on one of those problems that require statistical techniques. In May of this year, the New York Times ran an article which I think caught a lot of people off guard. I've spent some time with this issue, including talking to you about this issue, because of my interest in the future of Israel's growth. But I was struck when this New York Times article came out by how many people were kind of head-scratching in response to it. Like, they had never really focused on the degree that this was I was struck when this New York Times article came out by how many people were kind of head scratching in response to it.

Like they had never really focused on the degree that this was a problem. So the New York Times article I'm referring to, front page article, the title was Long Slide Looms for World Population with Sweeping Ramifications. And then the piece says demographers now predict by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time. Okay, so that people I spoke to were like, huh, that's not something I've been focused on. Why is this the first time I'm hearing about this, and what does it mean? Now, before we get to that, I just want to talk about where we were before that, the period we were before that.

The global population saw its greatest increase in known history in the last century, in the 20th century. So from 1900, in the year 1900, the population was 1.6 billion people. And at the end of the century, of the 20th century, the global population was 6 billion people. So, you know, lifespans were increasing, infant mortality was crashing. So first, can you explain what this big demographic boom was before we get to the bust that happened in the last century? Sure. Well, I mean, you and I, and I think almost all of your listeners are children of the 20th century.

There are some new entrants, but mainly children of the 20th century. So we're children of the population explosion. And it was just about a quadrupling of human numbers between 1900 and the year 2000, as best we can estimate it. But this explosion wasn't caused because people suddenly started breeding like rabbits. It happened because they finally stopped dying like flies. I mean, between 1900 and the year 2000, the world's life expectancy rose from maybe about 30 to maybe about 65. The world's life expectancy is higher than that now, by the way. This was a health explosion. All of the increase in human numbers was driven by improvements in health. So if you have a population problem to

deal with, I mean, a health explosion is a pretty good one to have to deal with, right? I mean, it offers up a lot of new potential and benefits. You may not capitalize upon all of it. You may squander it somehow, but it was fundamentally a really auspicious trend. And it's, needless to say, continuing to this day, except in a couple of little problem areas. And when did it begin to, or I guess we know when it began to turn. Why did it begin to turn? I guess when and why? In the second half of the 20th century, we saw a really pronounced trend that actually had begun in France, let's say around the time of the French Revolution. march downward towards smaller and smaller family sizes on a secular voluntary basis, not caused by calamity or the four horsemen, but just from a desire to have smaller families.

And in the period from 1950 to the present, we have seen fertility size for the world as a whole, the fertility numbers for the world as a whole, drop by well over 50%. And now, I mean, like today while we're having this podcast, somewhere over two-thirds of all of the people in the world live in countries where birth levels are not sufficient to maintain long-term population stability without compensating immigration to keep numbers up. So, we had this tremendous transformation in voluntary family formation. And that's what's causing the peaking and the decline in a growing number of countries' populations.

Can you explain what, as a demographer, just the technical explanation of what the replacement rate is? Sure. The very nerdy calculated number, which is usually represented as 2.1 births per woman per lifetime. Assistant professors will pick at me for that because it's not precisely that, but that's good enough for government work.

This notional number is the number of babies that have to be born for each woman of childbearing age to be succeeded in the next generation by another woman of childbearing age. In other words, if today's women are, quote, replaced by 0.9 women in the next generation, um, your population's eventually going to head South without immigration. Uh, if it's 1.1, you're on a path for long-term population increase. And this is a point that when I talk to people about this issue, they don't, they don't fully appreciate the exponential power of being on the right side or wrong side of the replacement rate. So if you're on the right side of the, what you would call the right side of the replacement

rate, not ideologically right, but on the growing side of the replacement rate, you get population growth at an exponential level. But if you're on the wrong side of the replacement rate, meaning below 2.1, it's not just that you kind of fall, the population shrinks a little bit, or the population doesn't grow. You get into this rapid exponential downward spiral. Sure. No, it's, like you said, it's compound interest either up or down. And it starts out kind of slowly, but it speeds up. Just like Einstein said about nothing being

more powerful in the universe than compound interest, right? So it's not just eventually a decline in numbers. The internal arithmetic of it means all sorts of other things are happening at the same time. The first thing that happens is that you see a shrinking, a peaking and a shrinking of the working age population. Then you see this overall decline. But at the same time, you've got this change going on in the internal composition of your society. With population decline due to low fertility, you get a radical and really pronounced graying of society. And you can kind of think of it like if you've got a population pyramid and you squish the base of it, you've got a higher fraction of people in the older ages.

So low fertility over a long period of time always jams up the age profile, let's say, of a society. All these things are bundled together. Okay. So now I want to get to another. So there's the replacement rate, and then I want to talk, I want you to explain the dependency ratio, because that's another term in macroeconomics that you're speaking to here without defining that specifically, but I want to explain, I want you to explain the dependency ratio, meaning what does it actually

mean? Why is it so important? And then we'll get into where a shrinking population jams it up. Well, demographers oversimplify stuff a dependency ratio is the number of people of working age in relation to the number of people above working age and below working age. And that's usually taken as a metric of, let's say, 15 to 64 as the working age years and 65 up as not working and below 15 as not working. Now, I mean, in real life, we know that that's kind of a poor approximation. What we'd really want to have is the number of working people and the number of not working people. But this is the way that it's usually done. And a lot of people, obviously, over the age of 65 work.

I'm over the age of 65, right? So it's a first imperfect approximation. But if you have a society that is aging, um, the number of people over the age of 65, you're going to be growing a whole lot faster than the total population to say nothing of the working age population. Okay. So there's the balance sheet issue, right?

So you need, you need a certain number of working, uh, working age members of your population to support retirees. So it's just, it's math. But then there's also kind of the composition of your population. So a shrinking population is not, to your earlier point, but the graying of a society. A shrinking population is not just about the balance sheet. It's also the composition, meaning if you have more older people than younger people, it does have impact on the dynamism and the innovative spirit of your economy.

So can you speak to that? Well, sure. I mean, the devil's always in the details, right? I mean, we're talking about aggregations of individual human beings. And so the human ingredients that you're using always matter. raw numbers only, the raw totals only, the graying of a population tends to move a lot of people who will be making big claims on production out of the productive sphere and into just kind of the consumption sphere. And it may also have effects on things like innovation and entrepreneurship, as you mentioned. I'm going to kind of be a little bit wishy-washy about that, because I think an awful lot depends upon what the incentives are in a society, what the morale of a society is,

what the, you know, kind of the zeitgeist and all that sort of stuff. But, you know, if we take a look at existing numbers, we can see that in the past, let's say in the early 1900s. And more recently, there's a kind of a bell-shaped distribution of great invention in the world. This is economist Benjamin F. Jones's finding. And most of the Nobel Prize winners won the prizes for work that they did when they were between the ages of, let's say, 30 and 45. I mean, they may have gotten the prize at 90, but the work was done in those ages. When you have a smaller share of that age group in society, do you get less creativity? Well, it's a really important question to ask. There are some things that older people seem to be able to do better than younger people, partly from, you know, skills over the lifetime before they like forget them and stuff, right? But risk-taking and entrepreneurship is often a game of the young.

So when you have a change in the age composition of society, older people have to up their game. If the place is going to remain innovative and dynamic. And one of the things that older people usually aren't known for is being okay to risk. People who get older tend to be more risk averse. That seems to be a general proposition. So there's a couple studies I've seen

specifically on this. One shows that young workers in companies and in populations disproportionately older, those young workers tend to be less innovative and risk-taking than young workers in young companies, meaning in companies with majority young employees or younger employees, and in populations that tilt young. Does that intuitively make sense to you? It could be. I mean, I don't know if that, Dan, I don't know if that's an iron rule everywhere, but I mean, you can see, you can see, it sounds commonsensical. I mean, what we also know is that the age of businesses, how long the business has been

alive, that survival trend also seems to affect sclerosis. And you could have, so to speak, older businesses in a relatively young society and vice versa, I imagine. So, trying to elicit entrepreneurship and innovation kind of in all populations is, I think, quite beneficial. It's especially important for aging societies because if an aging society kind of like sticks with, let's say, an old 20th century pay-as-you-go social security scheme where people stop working and then people who are still in the labor force are paying for your retirement. Population decline and population aging are pretty unforgiving in terms of the arithmetic there. So just related to that, there was a study in 2018 comparing Japan and the United States by scholars who worked together on the study from Beijing University and from Stanford Business School. And the study noted that half of the top 10 high-tech companies in the U.S. were founded

after 1985, and their founders were very young, with an average age of only 28. By contrast, in Japan, none of the top 10 high-tech companies had been founded in the previous 40 years. Well, I mean, part of this is also the U.S. secret sauce and how much of the US secret sauce is in our ethos and how much of it is, let's say, enhanced demographically by our ethos is a question I can't answer for you today. But I mean, if you go from what? If you go from Amazon to Walmart, I mean, just go through the alphabet, what are the big, new, innovative companies of the last 40 years?

They're not all, but very largely US-based. So there may be something that we do here demographically also that involves immigration and talent from abroad, which doesn't exactly fit in with our birth and death numbers. Uh, it, there's, there's, there's a lot of stuff that goes into this formula, I think. But, but so in the, in the 1980s and 90s, there was this big scare here about the rise of Japan. Big scare in the United States, but the rise of Japan. And, you know, Japanese economy was on a tear. They were buying up, Japanese businesses were buying up all these American assets. There was a sense that the Japanese economy was on the march.

Not so much anymore, obviously. So I guess my question is, how much, I pointed to this study, you know, comparing to high-tech companies in Japan to high-tech companies in the US, how much of Japan's problems are a demographic problem? Can you speak, just actually explain the Japanese demographic problem, then we can get into the implications. Yeah. So Japan's arithmetic, like all countries' population arithmetic, is based on births, deaths, and immigration. For reasons that seem very particular to its history and culture, Japan has an enduring allergy to gaijin. It just doesn't do immigration that much compared to other countries around the world, compared to other affluent industrial democracies. Japan has the healthiest national population in the world and has had the healthiest national population

in the world for decades now. And one of the highest life expectancies. Because of that. And that's been a great blessing for people who live there and their loved ones. And it's been a great blessing for their society. Um, Japan's birth rates, uh, are sort of a, um, leading indicator for the decline of childbearing and fertility in the post-war West. And Japan first fell below the sort of snapshot annual synthetic, we might call it, reading of replacement into below replacement fertility in the 1950s, bounced back a little bit. But Japan has been below replacement since the 1970s consistently.

And we're talking about almost half a century now. So if you don't have immigration and you're below replacement for half a century, what do you think is going to happen? Well, it does. And you have a below replacement, virtually no immigration, and high life expectancy. Yeah, exactly.

So what do you think happens? We've seen conventionally defined working age population shrinking for more than a generation, let's say, since the 90s. We've seen total numbers declining for a decade and a half, maybe a little more than a decade and a half. And Japan has a population where the midpoint of age is about 47 now, maybe 48. Half the people are older than that. It's going up very fast, that midpoint. And the only segment of society that's still increasing in size is people over the age of 65 and that's a temporary condition. When everything turns south, the older population will just be shrinking more slowly than the younger groups.

So the population will continue to age. And I mean, we're kind of talking about stuff that sounds like sci-fi now. I can describe this stuff to you, but I can't tell you how it's going to operate. from now, a Japan where well over a third of the population are projected to be senior citizens, 65 plus, where half of the population is going to be, let's say, over 52, 53 years of age. We've never seen anything like this operate as a society or an economy before. And no time in human history that we know of. No time in human history that we know of for a large population. I mean, you know,

you can go down to Florida, you can find some places like that, but not as a country. Now, Japan, for whatever reason, it's a big country that doesn't have a lot of demographers. And so some of the demographic questions there haven't been really looked at very closely. But to my way of thinking, more important for Japan than the headcount that we've just described is what's happening in family formation, okay? In the quality of families. Because, I mean, we in the US and in Europe and Canada and, you know, those parts of the world have had a revolution in the family with the decline of the nuclear family, which has included a fair portion of births being outside of marriage, right? We've got the out-of-wedlock thing pretty strongly in our societies.

That's still generally anathema in Japan. So Japan has had the same sort of flight from marriage that we've had in the post-war era, maybe even a little bit stronger than ours, but almost no out-of-marriage childbearing. So, this means that Japan has had an absolute explosion of childlessness. And if you take a look at some of the studies that have been done on this, young woman, let's say born in 1990, you know, would be in her very early 30s now, has slightly less than 50-50 odds on current trajectories without changing anything, but on current trajectories of ending up with any biological grandchildren. And this is within, these are people who are now, you know,

young adults. So this is going to be happening to people we can talk to, right? Right. Soon. This is soon. Yeah, this is soon. And how does a society operate where you have all of these healthy isolates, aging isolates, without family backup. This is another thing I don't think we've ever seen before in history. And I mean, Japan is the focal point of the spear, but this is going to be happening elsewhere as well. And this is a huge unexamined socio economic question. Um, because I think, I think I can say it without, uh, setting off, you know, kind of

like political correctness buttons on your podcast. Um, government isn't, no, there's no, there's no cancel culture on the coming back podcast. No, I mean, uh, go, uh, government is not a very good substitute for the family. It's a very expensive one, but it's not a very good one. So what is going to happen to all of these people, and not just in rich countries, by the way, is going on in places like China too. Meaning people are going to feel lonely, get depressed. There's no social safety net that can substitute for having people in your life as you age. Yeah, you can't, there isn't enough money in society to purchase that, I'm afraid.

And in places like China, where you don't even really have a national government safety net, it's going to look, I think, a lot more like a slow motion humanitarian crisis as it emerges. So whenever I speak to demographers and we talk about Japan, the line that they always repeat is, just to put things in perspective, for a number of years now in Japan, adult diapers sell more than baby diapers on an annual basis, meaning there's a bigger economy, there's a bigger market for, you know, there's a bigger market for diapers for senior citizens

than there is a market for diapers for babies. Yeah. Is that where the whole world is heading? It's not where sub-Saharan Africa is heading in our lifetimes probably. But United States, Europe, other parts of Asia? Well, so one of the little kind of showman things that demography does is make projections out to the you know 2100 2300 this sort of thing I mean that's kind of science fiction I don't think we

can accurately talk about anything that looks out more than let's say 20 max 25 years because demography has no way of accurately forecasting how many babies the currently unborn are going to have. We've got a very good method for knowing how many people who are currently alive are going to be surviving in 10 or 15 years and so forth. So we can look out that far. So let's say if we look over the coming generation, it's going to be continuing, or it looks like continuing sub-replacement fertility on average in all of the world apart from sub-Saharan Africa. And if you break the world down into kind of two groups, sub-Saharan Africa and everybody else, the everybody else on average is already markedly below the replacement level.

So there's a fierce debate in the United States right now about what to do about rising inflation. As we think about the challenge of demography along the lines that you're talking about, and we look at the experience in Japan, are you on the side that shrinking, are you on the debate about what impact a shrinking population has on inflation? Are you on the side that it's ultimately inflationary or deflationary? Well, if you, I mean, I think the Japanese contemporary economic experience is really fascinating and really hard for people who are English language natives to kind of like wrap their heads around because it's so very different from what we take as given, our kind of like mental coordinates. If you were to go by the Japanese experience, I think you'd imagine that it's pretty deflationary. But there's some very interesting work that's been done, I'm sure you know of it, arguing arguing that the peaking and shrinking of the global labor force is going to have an inflationary impact internationally.

And it's also going to have an impact of reducing some of the economic and wealth gaps in the world, and maybe even in certain societies. So, I mean, we have this, we have this safety valve in the United States of the seemingly insatiable demand for talented people to come to our shores. And we also seem to be, I mean, hardly perfect, but surprisingly good at assimilating newcomers into loyal and productive Americans. So I think we should look at that as, you know, kind of like a get out of jail free card for our society and be mindful of it. There's a, on the inflationary side of this debate, there's this contrarian point of view in this book I recently read called The Great Demographic Reversal by Charles Goudart from

London School of Economics and Manoj Pradham. Exactly. Yeah, you know them. Okay. Sure. So it's the Great Demographic Reversal. I highly recommend it to our listeners. Aging societies, waning inequality, and an inflation revival. And

they basically argue, which I'd never thought of until I had read their argument, they basically argue that as a society ages, there is going to be huge demand on elderly care workers, huge demand for elderly care workers. So suddenly we're going to need more and more people in our labor force who can work with elderly people who are increasingly going to be alone for all the reasons, living alone for all the reasons you've articulated, except elderly care work is the hardest work to automate, right you know to automate right so you're not like so many other parts of our economy can be automated this is a part of the labor force a part of the economy that can't be automated if you want human beings to work with elderly human beings you need more

human beings and so you don't outsource that labor obviously they have to be close proximity to the elderly and you can't automate that labor labor. Obviously, they have to be in close proximity to the elderly. And you can't automate that labor because you need actually real human beings and human skills at a time that the labor force is already shrinking. And there's already huge demand for labor. And that creates an inflationary spiral. And by the way, in Japan, I recently saw one said it said something like we're headed for a world not too distant future where something like one out of every 10 workers in the japanese labor force will be elderly care workers so it's we're already starting to see that no absolutely and uh we can own we can innovate our way out of this to some degree but i don't think entirely i mean the the biggest silver bullet, I think, for Japan won't be smart robot nurses.

It'll be coming up with some medical intervention for dementia. Because dementia is this gigantic iceberg that's floating towards aging societies. Because if you want to know who really needs round-the-clock full-time care, it's elderly people suffering from severe Alzheimer's or other forms of dementia. And there really is no way of substituting your way out of that. It's been very curious. For the last half century, tens of billions of dollars have been spent on medical research on dementia. And we've got very little to show for it yet. I mean, I assume we're eventually going to have something to show for it the same way

we do for all of the rest of the life sciences, you know, and other sorts of areas. But this has been a real laggard area. And in a world where the dementia intensive population, people, let's say over the age of 80, are growing faster in numbers than any other group in the world, this is, I think, a real concern. All right. I want to talk about two other countries. We're talking a lot about Japan. Japan is actually not even the country that is headed for the worst, if you look at the data. It seems to me like South Korea

is in an even more dire situation. But I want to talk about China and Russia, which are two countries that obviously from a geopolitical perspective are a big focus of our foreign policy debates here in the United States and was the subject of a piece you had written for Foreign Affairs I think in 2019. And I want to just, so I'll quote from that piece, you say, over the past two generations China has seen a collapse in fertility exacerbated by Beijing's ruthless population control programs. The one-child

policy introduced in 1979 was ended in 2015, but the damage had already been done. So first question is, why did China implement the one-child policy? Second question is, why did China end the one-child policy? And the third question is, are they doomed? Is the damage already done? Like how so in the way that you articulate it? So I think the Chinese government implemented the one-child policy on the basis of a crushingly simple failure of policy analysis. The Deng Xiaoping circle was terrified by how little they had inherited from the Maoist era. During the Maoist era, there was obviously a catastrophic famine. It was a man-made famine, but it was a catastrophic famine. And during the Mao decades, there was a perilously tight race between food production and mouths. And in this kind of awful fallacy of composition, the policymaker said, hey,

well, if we just make sure there are less mouths, everything's going to be okay. And so there was the most awful totalitarian invasion of the family that ever occurred on a nationwide basis. I think probably ever. And this was the Chinese government's claim that it was Beijing and not parents who got to say how many kids would be born in the society. It's very hard to tell exactly what the demographic consequence of this program was. We know there were horrendous violations of human rights. We know about the infanticide.

We know about the forced abortions and all of this other, you know, monstrous stuff that was just business as usual. What makes it hard to say what the demographic impact was is there were countries that were not using kind of police state bayonets as part of their population programs, where birth levels sank really fast. So we don't get to do the rerun of history to see what it would have been like in China without this monster program. But be that as it may, from the early 1990s to the present, it seems pretty clear, despite China's very spotty population numbers, that the country as a whole has been below replacement or well below replacement. The government panicked about this in the early 2010s. There seemed to have been some people in the Chinese government

who were arguing, well, if you relax the program, all of these peasants are going to go back to having five kids. I mean, just to show how out of touch they were with reality in their society. But finally, the one-child birth quota regimen was changed. The government has not renounced population quotas. It's just kind of raised them. But right after the quotas were raised, instead of increasing, births kind of slumped. It looks like they went up one year after the quotas were raised. And since then, as far as we can tell, they've been slumping further down. The Chinese census taken last year reportedly shows that the birth level for the country as a whole is 1.3 births

per woman per lifetime. We haven't been able to check or look at those numbers and vet them yet. And also it was a COVID year, so it was obviously an odd year. But that's a whole way of distance from that 2.1 number I'd mentioned earlier as a notional replacement. So can this be changed in the future? Well, sure it can be changed in the future, but I don't see exactly how it can be changed by a totalitarian, you know, bayonets for more

babies program. And you also in that foreign affairs essay talk about the other legacy of the one child policy, which is when parents know they can only have one child, there was this disproportionately high number of abortions of babies that when parents learned that their child in the womb was a female rather than a male. So what was, why, why were the abortion numbers spiking in favor of, uh, males over, over females?

And then what are the demographic implications of that? Well, so we had a collision, it looks like, of three different forces. Um, one was the kind of age old, ruthless preference for boys that you see in China, but maybe not only in China and some other places. You see the anti-natal program run by the government and forced fertility decline, which makes the gender outcome of each baby more important.

If you have five or six, maybe you'll be a little bit more open-minded about the gender of your next child. And then you also had the advent of pretty good prenatal sex determination technology, sonography and stuff, in a context of unconditional abortion. You put all those things together and you had a war against baby girls. Some calculations I did earlier on suggested to me that something like half of all of China's

female second pregnancies were terminated, probably because they were female. And so naturally that, you know, it kind of sets the old, you know, we seem to produce worldwide as part of the code for our species, for the mammals that we are. We're getting situations where 120 baby boys were being born for every hundred baby girls. And if you were Mauritius or a relatively small population in the world, maybe that wouldn't matter because there are lots of other fish in the sea. When you're the most populous country in the world, it's kind of hard to even that out through, let's say imports from abroad. Okay. So there are a number of countries that have gone to extraordinary lengths who didn't have

a one-child policy and just ended the one-child policy. There are plenty of countries that never had a one-child policy that just recognize this is a crisis and they've gone to extraordinary lengths to juice fertility. So Russia's population is a case study. It's now falling by about a half a percent a year, and this decline is expected to accelerate, which according to one study I read would bring the population below 100 million by 2050, which that's from 146 million now or last year. So population now in Russia about 146 to 150 million, and it would drop in about 30 years to 100 million, which is staggering. In 2006, President Putin called the demographic crisis, quote, the most acute problem in

contemporary Russia. And he announced large cash incentives for families having more than one child. One of my favorite stories reading about Russia's demographic challenges is that the government even installed curved park benches to get couples to slide closer together and be more romantic. And then in a Russian region known as Lenin's birthplace, the local government took the directive even further, declaring September 12th National Conception Day. And on that day, imagine having a National Conception Day. On that day, couples could take half a day off of work to do, quote unquote, their patriotic duty. And anyone in the town who gave birth nine months later from that day would win a grand

prize of an SUV. This is real. This is, these are, this is, we can provide the sources in the show notes. And yet these incentives have only had limited effect. Now, I talk about these incentives sort of in jest because obviously they're extreme, almost like a caricature of the remedies that countries' governments are experimenting with. But in 2020, Russia's fertility rate was about 1.5, so well below replacement, and still dropping. So these efforts aren't

working. But it's not just Russia. The German parliament passed a law guaranteeing daycare for all children at least 12 months old. Germany currently appropriates something like $250 to $300 billion a year on family subsidies. Sweden, I've read that they're now keeping kindergartens open 24-7 to accommodate parents who work at night. So it's not just about incentivizing people to have babies. It's also about just creating social welfare programs that make it easier if you choose to have children

to raise them. And yet there's no real evidence, maybe a little bit of data in Germany where it's getting a little better. But outside of Germany, I don't see any evidence that any of these programs are working. Am I right? Well, there's a fierce little debate off in the corner of demography about whether pronatal policies work or not. And I'm on the side that's quite skeptical about pronatal policies. Um, you know, if you throw a lot of money at something, you may be able to buy a little bit of something. Right. Um, but I mean, just think about, just think about what you're getting yourself into if you want to get into the baby bribe business, right? What's the opportunity cost of a real pronatal policy?

I don't know, 50% of GDP? What's the share of working women in society? All of the baby bribes thus far have been kind of pin money compared to the true opportunity cost if you really wanted to get into this game. And by the way, when I look at all of the inconclusive data about what are the correlates of fertility and it's been, you know, stuff has been done on this for like a century and a half by the social scientists. The most powerful predictor of fertility across countries and across time is the reported number of children that women say they want. And that's in a way kind of reassuring because it means that we have human agency. We're not rabbits. So if you don't have a population policy that has an answer to the question, what do women want and how can women want more children, you're not going to go very far.

And if you want to get into this question of changing people's mentality, you're getting into some really spooky stuff. You've written that parents choosing to have children is the ultimate vote of confidence in the future of their country, in the future of their society? I guess my first question is, how do you measure that? How do we know that? Or is it just intuitive? If you're upbeat and optimistic about the future of your community, your country, you're more inclined to bring more people into it. I guess maybe it's intuition or is there any sort of social science measure of that? I guess that's my question.

I'll get to my second question on this in a minute. So it's harder to answer your question than it ought to be in the United States because in the 1970s, Congress made it illegal for the Census Bureau to ask people about their religion or religious adherence or religiosity. And I mean, that was done in the wake of scandals of surveillance of domestic population by the CIA and stuff. So I think it was done as a protection of individual privacy. But what it means today is that we don't know nearly as much about religiosity in the United States as we probably ought to. From non-government sources, the evidence is very strong, and all other things being equal, people who are more religiously

inclined, who worship more often, who say religion is a more important part of their lives, tend to have more children than those who describe themselves as more secular. If you look at the difference between the U.S. and Europe, American fertility has taken a big drop in the last 15 years. Let's say you start in around the year 2000. The big differences in the number of people, the proportion of people who said that religion mattered in their lives and the proportion who said they were secular. Religious-oriented people in Europe had about the same number of babies as those in america secular is too but the proportions were so different that you had a very different outlook and likewise between europe and the u.s back then you had other big gaps in attitude the proportion of people who said they were optimistic about the future was a lot higher

in the US than in Europe then. The proportion of people who said they were proud of their country was a lot higher in the US than in most of Europe at the time. So you could show through public opinion polls and other sorts of data like that, there's a sort of a cluster of attitudes that were associated with higher birth levels for a rich Western democracy. Of course, a lot of that has changed in the U.S. over the last decade and a half. We have a less religious society, a society that says, on average, people are somewhat less proud of the U.S. than back then, also less optimistic. And by no surprise to me, also birth levels are considerably lower than they were a decade and a half ago in the U.S. We had this anomaly in America where

the U.S. for about a generation was at or slightly above replacement, even though it was a rich Western democracy and all the others were pretty far below the replacement rate with the exception of Israel. That's changed, but the attitudes and the birth rate have kind of changed in tandem. In this New York Times article I cited from May, I'll quote from it here. It says, a planet with fewer people. So the article basically sounds the siren that we have, this is a real crisis. In fairness to the Times, I think they report accurately why this is such a huge problem.

It's rare that I tip my hat to the Times for reporting something as spot on in that regard as they do. However, they do caveat it by saying, and I quote here, a planet with fewer people could ease pressure on resources, slow the destructive impact of climate change, and reduce household burdens for women. So I hear this a lot from people when I talk about this issue. The shrinking global population is a real crisis for the world. It's a real crisis for the West. And they respond by saying, yes, but less pressure on climate, less pressure on, you know, fossil fuel burning and consumption of fossil fuels and less pressure on resources, household resources, less pressure on household budgets.

They basically argue fewer people is a good thing for the people that are here now. How do you respond? Well, look, I mean, it's, it's de Gustavus. If you like the museum all to yourself, having less people is great. Um, that's a sort of an aesthetic thing, right? And it's kind of hard to argue aesthetics. Uh, the, the question about environmental impact is a very important one. Um, I, I don't do climate science because it's too complicated. I do population numbers because it's a closed system and they all have to track from one year to the next.

Let's assume the climate science is exactly the way the IPCC says. We have a question of innovation that faces us. So we can talk about climate change, human-generated climate change, but we also have to talk about adaptation and the extent to which we can adapt to climate change. And two things that I think will help very much in the adaptation part are technological breakthroughs that can help maintain prosperity prosperity with changing energy composition and also racing to get to be as rich as we possibly can as a humanity to pay for the adaptations that we're going to have to have because we can't stop all of the climate change. I mean, that would be the way it would look to me. Now, population decline isn't by itself going to increase the innovation or the inventions,

the breakthroughs that societies are going to make. I think that's a pretty complicated quality. And more than numbers per se, I think the quality of innovation and responses is going to matter to the sort of lives that we lead if indeed our climate is going to be altered by human activity. All right, Nick, we will leave it at that. Thank you for joining this conversation.

We will post in the show notes your recent books and articles and essays, all of which are worthy of devouring as I have. It's a difficult topic. It's a ner I have. It's a difficult topic. It's a nerdy topic. It's a wonky topic, but it's one I'm fascinated by, and I think you've been early on it. And I think folks are just now starting to wake up to this new reality.

I think it's going to be a very big theme in our public policy debates over the next decade through the 2020s. So thanks for shedding some light on it and where we're going in the stakes. Thanks so much for inviting me, Dan. It's been a lot of fun. That's our show for today. To follow Nick's published work, you can go to AEI.org. That's the homepage for the American Enterprise Institute. And you can also order any of his books at barnesandnoble.com or at your favorite independent bookseller or that

e-commerce site that I think these days they're calling Amazon. Call Me Back is produced by Ilan Benatar. Until next time, I'm your host, Dan Senor.