Thursday, November 15, 2012

Fertility Rates and Economic Change

What fifteen-year-old girl gets shot on the way to school?  Pakistani teen, Malala Yousafzai recently was by Talibani militants as she attempted to attend school for the first time.  The Taliban share a common fear: the more education a woman receives, the fewer children she will have- going against customary practices.

Population growth is rising.  Gaps between the rich and poor are widening.  Depletion of natural resources is rapid.  Something has to give. In order to increase education and development in poor, third world areas, fertility rates must decline providing women with the time and money needed to improve their lives as traditional rural families adapt to an urban lifestyle causing tremendous economic change.

My academic career revolves around business and economics.  As an accounting major numbers come easy to me as I naturally observe patterns and trends.  Recent issues regarding fertility rates and population growth provide an intriguing issue inline with my interests.  My father does business in developing areas known for these issues and I hear secondhand from him about their severity.

Looking specifically toward third world areas in India and Africa, the population is growing out of control.   India’s population is on pace to pass China’s within the next forty to fifty years.  Living standards will drastically decrease as the poor face increased economic hardships.  That is, unless something is done to reduce fertility rates.

In an article from the Economist, families have begun to move from the middle of nowhere, farming lifestyles into a town or village with schools, markets and factories nearby.  This process is referred to as “The Abandoned Hamlet.”  In the old lifestyle families were poor and could not afford to hire labor in the fields.  Children were born in order to provide labor at low cost and provide social security for parents.  Once their village changes or they move into a more civilized area, the cost of children rises due to education and taxes.  The state may even provide a pension, and families no longer need children as the primary form of social security.  In this scenario, the cost per child may outweigh the benefits, thus reproduction will slow down.

Where will population rise most rapidly?  In places that can’t handle the growth: developing nations stricken with hunger, political instability and environmental degradation.  These places have no family planning institutions in place and contraceptives are extremely rare.  In America family planning programs pop up everywhere at all times to prevent rapid population growth as seen in places like India and Africa.   According to Gopi Gopalakrishnan, the President of World Health Partners, women in India “are desperate for family planning services, to take control of their lives.”  The demand is there, the supply is not.

Of course there are benefits to high fertility rates and population growth.  Many ethnicities and religions call for large families and at least one son.  Governments view high growth rates as a positive due to an increase in labor force and a larger military recruiting pool.  As mentioned previously, more children for extremely rural families provide social security as the parents become older.

The economic benefits are much more promising and imperative.  With lower fertility and growth rates women will enjoy more free time and the opportunity to enter the workforce, earn an income and buy goods and services in the market.  More income per family will equate to more savings, which will turn into more investment to boost production and overall GDP.  Increased investment will also allow for more capital expenditures such as schools, roads and hospitals.  Overall if you want higher standards of living then reduce fertility. 

Driven by the desire to improve her life and future, Malala was determined to attend school and escape the typical role of a Pakistani woman.  Why did these Talibani militants attack?  For the fear of altering the status quo and dealing with the changes that educated females would bring.  These changes need to happen in order to preserve living standards in areas of high fertility rates.  Malala may not realize this now but her bravery might just spur activity leading to positive economic shocks in the future. 

3 comments:

  1. I'm taking a class right now on world poverty and we have talked at length about the importance of educating women in order to decrease poverty rates across the world. As you said, higher levels of education are linked to lower fertility rates. This is both because they are more educated about various birth control options as well as the fact that they are more qualified for jobs and are therefore not spending as much time at home, etc. It's really upsetting that governments and cultures around the world are revolting against the education of females. It's disappointing because it's an equality issue but also because it's a fairly simply way to improve quality of living and lower poverty rates around the world.

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  2. This blog touches on a very important topic. Reducing fertility rates is important for increasing quality of life, reducing poverty, and also reducing overpopulation and overconsumption of resources. Educating women has proven to be a very successful way to achieve all of these things and it is very upsetting that governments are striving to prevent this. Aside from the lack of respect for women their equality, it is disappointing because this kind of change benefits the society as a whole.

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  3. It's interesting how fertility and population growth can change views on effective government models. In my opinion, as populations rise there is a certain limit by which democracy is no longer a feasible and effective system. Take India vs. China. Both have exploding populations, but China is much more able to control it. India, the world's largest democracy, is run a mock with poverty and disorganization. It's a matter of freedoms vs. a state of living, I suppose, a decision future Americans may have to make decades from now, when our population reaches the same size. Ballots by then would take three days to count.

    In regards to economic increases by allowing education and indireclty reducing fertility. I think it is important to high light the other side. In China for example, the economic growth is based on a booming population filling in all the voids and creating a massive, cheap labor force. With it's population contracting under the one-child policies, the next several decades will see a heavy economic downfall. You can't grow an economy to a certain size and then suddenly remove the numbers that are supporting it. It is cause for an artificial economic crash. Or so some say.

    I think educating women is great and so is population control. I just thought it was interesting to see how some economists warn against drastic population measures, as they may cause future recessions.

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