Tuesday, November 14, 2006

Demography and Productivity

The Economist blog says that
there is substantial evidence that in modelling the welfare state, fertility is an endogenous variable: the more secure the safety net, the less likely people are to have children. Governments have largely nationalised the traditional functions of the family, but they have not eliminated the need for future generations to care for the current ones in their dotage. Unfortunately, the assumption of family duties by the state allows people to free ride on the fertility of others—which they seem to be trying to do in massive numbers. As we've mentioned before, a society where everyone tries to free ride on everyone else is headed for disaster. Europe's safety nets, or at least the pension systems, may contain the seeds of their own destruction.
Yes, but why don't family-care (child-care, etc) increase fertility by lowering the cost of child-rearing? I would have expected that this would compensate for the increased end-of-life independence. Two thoughts: (a) Maybe the breakup of extended family (due to independence from increased wealth, we don't have to live with parents and cousins) increases the effective cost of child-rearing more than the welfare state decreases it. (b) Maybe a whole lot of people just want to live alone. [tapping away in a silent room, thinking of my adult children in their various apartments in their various cities, looking across the room at Tom Myers with family around 1900, and at a very large painting of several uniformed servants contemplating a baby as they have tea, probably also around 1900.]


Post a Comment

<< Home