A new report from the US Census Bureau offers the surprising fact that in the next 30 years, the human population over 65 will double. In ten years, there will be more over-65s than under-fives. Old news, you say? Yes, in Italy, Japan, and Russia this is old news. In developing countries, it is new – and somewhat alarming. In 2008, 62 percent of all those aged 65 and over (313 million people) lived in the developing countries of Africa, Asia, Latin America, the Caribbean, and Oceania.  The elderly population in developing countries is growing twice as fast as in developed countries (on a not very small base in India and China, as it turns out. Those two countries account for 1/3 of the world’s aged population and 37% of the total global population.)

Demographers and statisticians have been telling us for years that the world is getting older. In a CGD lecture last fall, demographer Joel Cohen called this a “tsunami.” Almost 10 years ago, a United Nations Population Division report for the 2002 World Assembly on Ageing, stated that population aging is an unprecedented, pervasive, profound and enduring phenomenon that requires global action. But what kind of action does it require? Countries, donor agencies, and even households will be wrestling with this question more and more.

These strong words from UNPD may be appropriate. But there’s a lot to learn about aging before getting too alarmed. Such as what is old? Is it really 65, or it is closer to 85? Or, as still defined in many European and other countries for retirement purposes, is it 55 to 60? Like the t-shirt logo “50 is the new 30” suggests, a lot has changed since our grandparents’ day. And since real-life changes faster than government policy or statistics, maybe we should look at what it really means to be in your 60s or 70s. The U.S. age-specific disability rate at age 60 represents the fraction of 60-year-olds unable to do normal activities of daily living (ADLs). In a forthcoming CGD paper in the Demographics and Development series, Joel Cohen informs us that number has been dropping by 1.5% per year for 25 years. And over-65s in the U.S. and other rich countries are more active and less impaired than ever. As of 2005, it is reported that those 65+ with any disability were more likely to be in the 1-2 ADL group (3.1%) as opposed to groups with higher levels of disability, and that the distribution represented a 25.6 % decline in this category from 1982. This is why your parents aren’t yet living with you!

If they are, or eventually will be living with you, what does this mean for you and your children? Some of this comes down to how countries choose to re-distribute income across generations: through social programs or privately. Interesting preliminary findings presented at a World Bank workshop we recently attended provide some answers. The papers describe the effects of aging in Latin America on pressing policy issues like public finance, education and health. They will be published as: Daniel Cotlear (editor). Demographic Change and Social Policy in LAC. World Bank. The authors closely examined demographic trends in many Latin American and Caribbean countries. The results focus attention quickly. For instance:

• In Brazil, age is the main driver of the distribution of public finance. The elderly use a greater proportion of public funds than do the young thanks to a social security system that covers 90% of those 70 and above, and is especially generous to the high income retirees.
• Projections to 2050 for 10 LAC countries show that population ageing will have a huge impact on spending for health care and pensions, as well as reducing educational investments in the region.
• The young are poorer than the aged in many LAC countries (mirroring the situation in the U.S. since the 1970s when the elderly became a powerful political constituency), but elderly poverty depends largely on the generosity (as in Brazil and the Southern Cone) or miserliness (like in Colombia, Mexico, Jamaica) of pension systems, as well as remittance levels and labor income.*

The focus of this set of World Bank studies, and much discussion around aging in other regions, is public finance and how it needs to adjust to new realities. Other public policies are also being tried in by now familiar bastions of the aged such as China. Illustrating the concern in China over growing health and retirement needs of the aged – at a time when traditional family structures cannot be counted on to help out — the government of Shanghai is now urging eligible couples to have a second child. Such pro-natalist policies have been tried in some European countries and generally failed (Botev, 2008).

It is going to be tricky to figure out how to balance spending and transfers across generations, and across an individual life cycle, especially as different age cohorts expand and contract and elderly populations grow. Tricky also because as these elderly constituencies amplify, so does their voice in advocating for policies that are shifted towards personal interests, and potentially away from the interests of younger populations.

So in many ways, the issue of population aging is important for you. Not only now, but because ooh, ooh, one day you’ll be older too.

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* – All Latin American studies cited here are preliminary findings from an authors workshop held at the World Bank on July 14 and 15 2009.

Kapstein and Converse didn’t analyze it, but could younger, high population growth countries be more likely to make democratic reversals? There are reasons to believe demographic factors could be important. In The Shape of Things to Come, Population Action International last year highlighted that 90% of populations with very young age structures were likely to have autocratic or semi-democratic governments, and more likely to be in conflict. It would be interesting to add age structure to Kapstein and Converse’s dataset and see whether young and youthful democracies are more vulnerable to reversals than those that are just new.

Demography is important to consider in studying political structure and other development dynamics. The link between demographic factors and broader development discourse has been ignored for too long. An initiative at the Center, Demographics and Development in the 21st Century, seeks to rectify that omission. Please see our website for more information!

“Current population growth is alarming and killing efforts to combat poverty.”

– Sufian Ahmed, Ethiopian Minister of Finance and Economic Development

“You can’t keep going with a completely upside-down age distribution, with the pyramid standing on its point. You can’t have a country where everyone lives in a nursing home.”

– Carl Haub, Senior Demographer at the Population Reference Bureau

The 40th anniversary of World Population Day came and went last month with nary a whisper around D.C. In the U.K., rather more attention was paid, including a House of Lords reception featuring Sarah Brown, the PM’s wife, and 150 other notables sipping champagne in honor of the International Planned Parenthood Federation. Beyond the protocol-filled receptions, what does World Population Day mean now, and why should we keep it on the calendar?

Commemorating World Population Day may seem like celebrating the anniversary of the Motion Picture Society’s movie rating system (G, PG, R, and so on) – another relic created in 1968 that is clearly out of touch with today’s world. Was the day rendered unremarkable because of successful efforts to curb rapid population growth? Have new technology, changed cultural mores, and economic progress obviated the need for World Population Day, just as they’ve made motion picture censorship irrelevant?

Recent articles in The Economist and the New York Times remind us that population is as relevant – and complicated – as ever, although in dramatically different ways than in 1968 when World Population Day was first celebrated.

The Economist points out that high population growth remains a development challenge for many countries, although vastly fewer than 40 years ago. High population growth – particularly when it stems from high fertility rates – undermines improvements in the standard of living, endangers women’s health, and limits children’s physical and intellectual development. Countries with the highest population growth in the world will see their populations double in one generation – just 23 years! About the time of the first World Population Day, over a hundred countries were on such a growth trajectory. By 2000, only 29 countries were in this category.

High fertility may seem like last century’s news, but some of the world’s poorest and least stable countries (the African Sahel, Afghanistan, Nigeria, Uganda and Yemen) face dramatic pressure on resources, infrastructure, and public finances in the next couple of decades. The gap between these countries and other developing countries that have brought down their population growth rates is widening. In addition, countries as diverse as Bangladesh, Egypt, India, Indonesia, Kenya and the Philippines, have made progress but fertility levels still hover at rates substantially above replacement. This means big increments of population growth in countries already struggling to feed, house and employ their current populations.

The New York Times Magazine article by Russell Shorto addresses the opposite but equally pressing condition felt not only in Europe, but in growing numbers of developing and transition countries: that of very low or negative population growth. Shorto concentrates on the low fertility habits of Italians and French, but the problem he describes poses yet greater challenges in developing countries.

Rapid fertility declines in the 1970s and 1980s have paved the way for emerging market countries ranging from Brazil to India to South Korea and Turkey to quickly grey. Most of these countries are still trying to improve basic living conditions and will have relatively little breathing space to absorb and set in place the reforms needed to provide for health care and retirement of an aging population. Countries growing at 0.5% per year or less – such as South Korea – will not have their current populations replaced for 140 years or more! This implies that many elderly people will be dependent on the productive efforts of an ever shrinking younger workforce. For instance, urban China will have an elderly dependency ratio similar to industrialized countries by 2025; rural China will follow about a decade later. Countries still associated with high fertility — Indonesia, India, and the Philippines — will see their elderly population share take off around mid-century.

Last month the U.S. Census Bureau released its revised population projections which anticipate that the world’s population will cross the 7 billion mark in 2012, an increase of about 75 million people a year! This number – and the natural resource strains, economic and political shifts, and contributions to global warming that it implies – has huge portent globally. At the same time, increasing numbers of still-developing countries will be trying to cope with the new challenges of population stagnation, including 16 countries in Eastern Europe and Central Asia projected to shrink in population.

Looking forward. In September 2008, the Center for Global Development will launch the Demographics for Development Initiative which will examine the defining demographic trends of the 21st century, what they mean for global development and how we can best prepare for them.

By the time the next World Population Day rolls around in July 2009 we hope to be having a lively discussion about how to help the fast growing and the not growing countries of the developing world with their respective development needs. These will include policies that improve both micro and macro-economic prospects, such as:

• Improve the health of women and children
• Provide family planning to the poor and others with high unmet need
• Encourage social conditions that enable women to have greater decision-making authority in the family over child-bearing
• Create flexibility in labor and financial markets, especially for women
• Recognize the needs of different age groups well ahead of the demographic changes, and invest in public services accordingly
• Provide sound and efficient financial services to allow multiple generations to manage and transfer savings

Please join us for a discussion with renowned experts about what demography means for development, beginning on September 23 with Professor Joel Cohen of Rockefeller University. Details will be on the CGD website next month.

In his recently released book, Fatal Misconceptions: The Struggle to Control World Population, Matthew Connelly, an associate professor of history at Columbia, tells a cautionary tale about the arrogance that marked the origins and early history of international ‘population control’ programs. Of the many topics on which we could post, we focus here on his conclusions about the role of organized family planning programs in helping to reduce fertility rates. Professor Connelly repeats the assertion that family planning efforts explain “less than five percent of fertility levels in developing countries” (p.338). The reader might unwittingly conclude that there is widespread agreement regarding the “five percent” attribution, which is certainly not the case. Here we take a closer look at the analysis where this attribution first appeared, and at a more recent study using “gold standard” data from a controlled experiment that suggests the benefits of organized family planning efforts are significant and go well beyond ‘births averted.’

1994, the year of the landmark 4th International Conference on Population and Development held in Cairo, marked a shift away from a narrow view of curbing rapid population growth through organized family planning efforts to a more holistic reproductive health approach. That year economist Lant Pritchett, then with the World Bank and now at Harvard and a Senior non-resident Fellow at the Center, published results of a cross-national study in which he concluded that only five to 10 percent of differences in fertility levels across countries could be attributed to family planning programs or lack of access to contraceptives. Pritchett attributed the vast majority of the difference in fertility levels to demand factors, which he maintained were not affected by contraceptive supply. In repeating this assertion without further discussion Connelly may lead some readers to conclude that in spite of billions of dollars of cumulative investment (and the indignities and physical harm it sometimes caused), international family planning assistance didn’t make a difference in slowing fertility and curbing population growth rates.

In his 1994 study Pritchett uses cross-national regression analyses to test the hypothesis that demand for smaller family size – not supply of contraceptives – explains variations in fertility levels across countries. He also reviews evidence from the most important family planning controlled experiment available, the Family Planning and Health Services Project (FPHSP) in Matlab, Bangladesh which was designed to effectively eliminate the costs of using contraception. These costs included the time and money spent traveling to a clinic or other source for contraceptive supplies or advice as well as the costs of social opprobrium of using contraception, which were significant in this conservative district where many women practiced purdah and family planning workers were sometimes stoned. FPHSP’s “doorstep delivery” program ensured the women of Matlab uninterrupted and reliable access to their contraceptive method of choice even during the worst weeks of the rainy season. Pritchett acknowledges that Matlab proves that family planning can have a role in determining fertility. But, he argues, ‘fertility is not invariant with respect to the cost of contraception, just that it is sufficiently inelastic to make cost variations an unlikely source for explaining or causing major demographic changes.’ Generally speaking, Pritchett contends contraceptive cost should be a minor consideration affecting a person’s decision to have another child. To underscore the relative insignificance of contraceptive cost relative to the cost of raising a child, he asks his readers, presumed to be mostly from industrialized countries, ‘How many additional automobiles would people buy if motor oil were free?’ (p.25)

Since Pritchett published his article, fellow economists Shareen Joshi (University of Chicago) and T. Paul Schultz (Yale University) have completed an exhaustive evaluation of fertility and other health and social consequences associated with the Matlab program. The authors found fertility levels in the program area were 15 percent lower and that fertility was at least one child lower for women between the ages of 30 and 55 (in 1996) compared to the comparison area. Contraceptive use increased and fertility declined more in the program area than in the comparison area where government family planning efforts were underway and fertility declined from more than six to less than four children per woman. Joshi and Schultz’ results indicate that reducing the cost of contraceptives, particularly for poorer women who, for a variety of reasons, may not be able to buy contraceptives or for whom the costs of contracepting are especially high, appears to make a significant difference for voluntary reduction of fertility. While Dr. Pritchett acknowledged that reducing the cost of contraception and contracepting in the situation of Matlab, Bangladesh did increase contraceptive use and reduce fertility, he contends that the very high costs of making contracepting ‘cheaper than free’ as was done under the program mean that it cannot be replicated at the national level. Since 1994 when Pritchett published his article, the FPHPS effort has been extended to the national level. The costs of the ‘door-step’ model did not prevent this kind of scaling up of the program as Pritchett predicted would be the case.

Joshi and Schultz also look at benefits from the FPHSP that go beyond ‘births averted.’ They find the program is associated with important non-fertility benefits – not considered by Dr. Pritchett – including improvements to women’s health, their economic productivity outside their household and their household assets not present in the comparison area. Professor Connolly’s book might have also considered the value of some of these non-fertility benefits associated with organized family planning efforts, especially in settings like Bangladesh where they served as catalysts for important social changes. The realization that fertility was something over which a woman might reliably exercise some control would seem to be a vital first step in encouraging investments in daughters for whom life might hold the possibility of non-reproductive roles. Other side benefits in Bangladesh of the organized family planning programs included that women counselors be hired (eventually more than 25,000 women would serve as Family Welfare Advisers) with civil service benefits otherwise enjoyed mostly by men, and that unrelated men and women worked together in a professional environment.

So, did organized family planning programs do more harm than good? Professor Connelly implies that they did, and advises the public health crusaders of today not lose sight of the important lessons from the family planning past. His wise words and lessons from the past have special significance we believe for the public health ‘battlefields’ of the 21st century, especially HIV/AIDS. However, we urge Professor Connolly to pay more attention to the evidence regarding some of the good that family planning programs brought to the lives of poor women. In using history to avoid the mistakes of the past in the future, one must recognize the good as well as the bad.

Professor Connelly will appear at the Woodrow Wilson International Center on Tuesday, April 22 from 3:00-5:00, along with Mr. Bob Engleman, Vice President for Programs at the Worldwatch Institute.

Works Consulted

Mary Arends-Kuenning, 2002, “Reconsidering the Doorstep-delivery System in the Bangladesh Family Planning Program,” Studies in Family Planning, vol. 33, no.1. March.

Joshi, Shareen and T.Paul Schultz, 2007. Family Planning as an Investment in Development: Evaluation of a Program’s Consequences in Matlab, Bangladesh. Yale University Economic Growth Center, Discussion Paper No.951. February.

Diamond says, “The population especially of the developing world is growing, and some people remain fixated on this. They note that populations of countries like Kenya are growing rapidly, and they say that’s a big problem. Yes, it is a problem for Kenya’s more than 30 million people, but it’s not a burden on the whole world, because Kenyans consume so little.”

He further says we should be concerned about what happens when Kenyans (and other developing world people) achieve developed country consumption levels, and all of us – rich and poor countries alike – should seek ways to improve quality of life with sustainable consumption levels. Population does not get another mention.

Pointing to high consumption as the cause of unsustainability without also addressing population is like saying that only SUVs cause road congestion! In that case, there should be no reason for concern in India about traffic jams (and emissions) from the new 1 lakh Tata Motors car.

Of course, as with traffic congestion, numbers of people do matter, as does size. And we won’t come close to solving global warming, or broader issues of resource sustainability, if we don’t address both numbers of people and consumption levels.

The number of people in the world (and their distribution and ages) affect overall consumption directly; and through a variety of indirect channels, affect other economic outcomes that have a bearing on sustainability. This includes GDP (with links to population through labor supply, savings, and human capital investment) and its distribution. It is population’s effect on these variables, and how to achieve desired levels of population growth at the micro level (reducing unwanted births) and the macro level (realizing demographic dividends) that we must understand better and communicate to professors and policymakers alike.

In their 2001 volume, Birdsall, Sinding, and Kelley offer convincing but not well-known evidence that slower population growth does improve economic outcomes. More recently, new research is being supported by the William and Flora Hewlett Foundation aimed at deepening our understanding of how population affects economic outcomes by using new analytical methods that help overcome data deficiencies and new and expanded datasets that invite the application of new methods. The research is focused on Africa.

In partnership with the Institute of International Education, the Hewlett Foundation is inviting applications from Ph.D. students based in the U.S., Canada, and Africa for fellowships to support their work on population and economic linkages. The deadline for applications is April 1, 2008 (for U.S. applicants). The two-year-old fellowship program has already engaged some of the best and brightest Ph.D. students in economics and other social sciences to help us understand how population policies can be part of the solution to the sustainability problem.