Ross Douthat and Megan McCardle have columns out this week on demographic decline in America. They’re responding to both short- and long-term declines in American fertility, though not overall population growth. Generally I think that McCardle is more on the ball, but it seems that there are a few things they don’t adequately address that could improve America’s demographic balance:
1) Immigration – McCardle is correct when she points out that simply increasing immigration won’t work. Partly this is due to the tail of older relatives that immigrants will need to support, and partly due to the difficulties of of assimilating new immigrants. While the issue of older relations can be remedied through remittances, she’s dead-on about the difficulties of assimilation (and even more-so, though she does not say it, if the immigrants tend to come from a single ethnic group rather than diverse backgrounds. It is easier to assimilate many small groups rather than one large group). One way to ease the problem would be to liberalize guest-worker relations with Latin America as corollaries to the free trade in goods and services under NAFTA and CAFTA, and at the same time create corresponding skilled-worker visa programs for the European Union and select African and Asian countries. There are an awful lot of skilled Irish, Spanish, Egyptian, Indian, and Chinese people of child-bearing age who could contribute to the US economy. To encourage population growth, the visa program could even offer permanent residency to those who have at least one child (a new American citizen) before their visa expired.
2) Social Security – The lack of comprehensive social security, i.e. a safety net and public services for working families, is a huge disincentive to raise a family. Douthat notes that fertility went down after the crash of 2008, but doesn’t adequately consider why. Think about it: household incomes went down per capita, many households actually lost a breadwinner, the availability of jobs declined, and unemployment paychecks were not reliable thanks to conservative reluctance to extend eligibility. And on top of that, how could you plan for a family knowing that school budgets were being cut, food stamps were at risk, and many states have only rudimentary provision for child support? Douthat notes that America “has no real family policy” but declines to propose one. Starting a family, or having more kids, makes less sense the more financially vulnerable you are, something Douthat is aware of but minimizes in importance next to the “decadence” of those unwilling to procreate at what he deems to be sufficient levels and who, presumably, prefer to spend their scarce resources on themselves. By emphasizing moral failure, Douthat dismisses the way in which inadequate government policy may be discouraging population growth. He also takes the easy way out, preferring to play at being Edward Gibbon, with his thesis of decadence to explain the decline of Rome, rather than addressing actual public policies that promote child-bearing. By adopting this do-nothing tactic of bemoaning moral failure instead of engaging in imaginative policy-making, Douthat is unwittingly engaging in the very kind of self-indulgence that he abhors. (He follows up with a truly bizarre blog post in which he claims that people who oppose his decadence thesis are also against replacement-level birth rates. Interesting how the discussion shifted from one over marginal birthrates in a growing population to one of population contraction and eventual extinction.)
3) Public health – One of the reasons that an older population is bad for the economy, as McCardle points out, is that worker productivity goes down with age. Neither she nor Douthat address public health as a way of battling demographic decline. Good public health will not make older people younger, but it will make them healthier, and that in turn will broaden the tax base by increasing their productivity as workers. A healthier person who imagines a continued long and happy existence will still be willing to vigorously participate in the economy, whereas a tired or sick person, as McCardle accurately notes, will be risk-averse. A growing problem, in addition to the typical maladies of old age, is America’s growing problem with diabetes and obesity. Workers will continue to drop out of the work force at a younger age, and the older will be more infirm, the longer we go without addressing this through things like a more nutritious food-stamp policy and changes to farm subsidies.