Ideas to Action:

Independent research for global prosperity

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This is a joint post with Kate McQueston.

We all know poverty is undesirable.  Not only because of its effects on quality of life, but poverty also has intergenerational impacts and leads to negative health outcomes.  In general, the poor's demographic characteristics can vary quite significantly from the wealthy—including shorter life expectancies, higher rates of infant and child mortality, reduced educational and human capital attainment levels, and a higher burden of disease.  Higher incomes, on the contrary, have been associated with positive improvements in health, increased female labor force participation, and better educational outcomes for children.

Reduced fertility has often been seen as a mechanism for increased economic productivity.  As fewer children are born, more of the population participates in the work force, thus increasing per capita income.  Youth dependency ratios (the number of children under the age of 15 per adult) also become more favorable, enabling adults to invest more on their children (e.g., in education and health). This benefit has been coined the “demographic dividend” and is often used to prod developing countries in investing more in family planning and reproductive health.

A recent paper from the Harvard School of Public Health examines the effect of reduced fertility at the household level—asking if declines in the number of children per household benefit different socioeconomic groups in similar ways.  The study takes into account data from 60 low- and middle-income countries, finding that while all socio-economic groups benefited over time from lower youth dependency ratios, the highest income groups benefited from the fastest declines.  Another interesting pattern emerges from this research—in all four regions examined (Sub-Saharan Africa, South-East Asia, Latin America, and “Other”)—the total number of children was largest in the 2nd quintile and decreased only among the higher three quintiles; while the youth dependency ratio more directly followed the wealth gradient.  This finding suggests that higher numbers of children even in “less poor” families may continue to foster inequality over time as high income families reduce fertility at faster rates.  The study’s results agree with previous work, which found that inequality persisted after fertility declines, and that the demographic dividend was primarily to the benefit of already higher income families.  A similar finding from a 2008 study found that as national fertility fell, inequality increased.

A recent article in The Economist discusses this phenomenon, pulling away two main implications. First, inequality is expected to increasein the majority of low-and middle-income countries over the next decades, with demographic changes as a significant contributor. Second, working to reduce the fertility across all socio-economic status will not, on its own, be sufficient to reduce inequality.

To these two excellent points, we add a third—that inequity should be increasingly considered within population policies and programs (which has been discussed in John’s recent book, World Population Policies).  Most importantly, the demographic dividend isn’t a catch-all boon for development.  As some portions of society reap the benefits of lower fertility levels, policy makers will need to be conscious to providing continued support and opportunity to the poorest segments in society.