Wednesday, February 13, 2008

The Second Stage

As we have seen, for most of the second half of the twentieth century debates about population and population policy largely centered around the question of rapid population growth in the less developed world. Towards the end of the century, however, a quite different demographic phenomenon began to attract attention: aggregate fertility levels in the developed world that were inadequate for the long-run replacement of the existing population.

Analytically, the potential population policy issue raised by low fertility is not dis-similar to the problem inherent in rapid population growth: there is a disjunction between the sum total of individual reproductive decisions and a collective interest in some kind of long-run demographic equilibrium. Policy remedies, however, have been and remain much less clearcut.

In fact concern about below replacement fertility is not an entirely new phenomenon: the possibility that population might one day peak and start to decline could, for example, alreadt be discerned from a close inspection of fertility rates in Western European countries in the 1920s and 1930s, and in some specific cases, most notably France, even earlier. The birth deficit that began to attract attention in the pre WWII environment even had some communality with the more recent fertility decline in that it was associated with the start of a generalised postponment of first births (in this case possibly associated with economic and then war-related uncertainty). However the decades immediately following World War II were to see a substantial and generalised baby boom across the industrialised world (this time driven by a lowering in age at first birth) and preocupations waned with the same rapidity as the babies arrived.

The boom, however, was not to last, and by the 1970s, total fertility rates (TFRs) in most European countries and in the United States had once more turned downwards, and this time it seems that the change was a definitive one with falling in many countries decisively below replacement level. As a result fertility decline came back once more on government agendas as a policy issue. Subsequently fertility in the United States has stabilized at a level which is very close to the replacement rate (2.1), but in Europe and elsewhere fertility has continued to decline. By the beginning of the twenty-first century, the average TFR in Europe was 1.4. Such a level, if maintained indefinitely, will result in a population loss of one-third from one generation to another, that is population would fall by 30% roughly every 30 years. In some countries, notably in Southern, Central, and Eastern Europe, period fertility rates have fallen to 'lowest-low' levels without historical precedent. If this state of affairs continues, in the absence of large compensatory immigration it will lead not only lead to rapid population decline but also to very high proportions of the population in the older age categories.

Rising Median Ages

The decine in fertility has been accompanied by a continuous rise in life expectancy. Average worldwide human life expectancy reached 63 years in 1998 (CIA World Factbook 2004), with country values ranging from 37 in Sierra Leone and Zambia to 81 in Japan and San Marino. Indeed average life expectancy has increased in many developed countries in more or less linear fashion at a rate of nearly at 4 months a year over the last 160 years (Oeppen and Vaupel 2003, Riley 2001). The combined effect of these two processes - declining fertility and rising life expectancy - has been a steady rise in median ages. The median age of a population is the age at which 50 per cent of the population is older - and naturally 50 per cent is younger - than the age in question. Movements in median age can be considered a convenient rule of thumb measure of population ageing, although it is not an entirely unproblematic one (see later in this chapter and Sanderson and Scherbov, 2005).

According to the United Nations the 'global' median population age rose by a mere three years between 1950 and 2000, increasing from 23.6 to 26.4. (United Nations Population Division, 2002). The limited scale of this increase was largely the result of the fact that the most populous nations in the less-developed and developing world continued to have relatively high levels of fertility and thus remained extremely young.

(......something here on Wolfgang Lutz and probabilistic forecasts).

Over the coming 50 years, however, the global median age is expected to rise by nearly 10 years, being projected to reach 37 by 2050. What's more in 2050 13 currently developed countries are expected to have a median age of 50 or over, with Japan, Latvia and Slovenia (each with a anticipated median age of about 53), and the Czech Republic, Estonia, Italy and Spain (with a median ages of around 52) heading the list. In addition, three countries currently classified as developing (Armenia, the Republic of Korea and Singapore) will also be in the over 50 group. At the other end of the spectrum it is expected that Angola, Burkina Faso, Mali, Niger, Somalia, Uganda and Yemen will still young have comparatively young populations, with median ages likely to remain under 25. Clearly such projections are subject to high levels of uncertaintly, and in particular will depend on the pace of development in the countries concerned, a pace which will depend, in part of course, on the rate at which fertility itself falls.

In fact the entire planet is in the midst of a sea change in its age structure. The global population of over-60s, which is currently about half the size of the global 15-24 group, is rising sharply and is projected to surpass the 1 billion mark within two decades (and in so doing to become proportionately larger than the projected 15-24 age group). The over-80 population is expected to rise at an annual rate of 3.4% from 2000 to 2050, constituting an increase from 1% to 4% of the global population for this 'oldest old'group. Moreover, the process of population aging is itself accelerating. During the last 50 years, the global population of over 60s or over rose by just 350 million (to a total of 550 million), while in the next 50 years a 1.5 billion increase is projected for this group.

Since about 1970 the global overall dependency rate has being falling, due to the age-structural effects of falling fertility and declining levels of youth dependency. However, within this general trend old age dependency has been steadily rising, and from 2010 onwards there will be a steady upward trend in the overall global dependency rate as increase in the numbers of elderly outweighs the decline in the number of children.

This combination of these two trends - the systematic decline in fertility to below replacement level and the continuing increase in life expectancy which produces a steadily rising proportion of elderly dependent people - has been labelled by some the second demographic transition (Van de Kaa, 1994, 1987 Castles, 2003; Lochhead, 2000; Lesthaeghe and Moors, 2000). Others, on the other hand, continue to refer to societies exhibiting these characteristics as 'post transitional' (Bongaarts, 2001). Some have gone even further (Kohler, H.-P., F. C. Billari, and J. A. Ortega. 2002) and have started to talk of a third, or postponement, transition, thus treating the fertility phenomenon as a separate entity in and of itself. Kohler et al, in support of this view, argue that the long-term trend towards low and lowest-low fertility in Europe is related to three distinct transition processes:

(a) the (first) demographic transition which is characterised by parity-specific stopping behavior within marriage (ie less third, fourth, fifth children etc) and the growth of the nuclear family

(b) the second demographic transition which is characterised by sweeping value changes and in the rise of non-marital family forms

(c) finally, the third 'postponement' transition which is characterised by a steady shift in the timing of fertility towards a late childbearing regime.

The postponement transition is thus seen as a third step, one which follows-on from the control of marital fertility and the transformation in partnership attitudes and behavior.

Until recently relatively little attention had been given to the determinants and consequences of fertility in 'below-replacement' fertility societies. Traditional theories of the demographic transition in fact had comparatively little to say about the level at which fertility would stabilize at the end of the envisioned transition. It was normally assumed - or implied - that replacement fertility of about 2.1 births per woman would prevail in the long run (Demeny 1997; Caldwell 1982). The undelying theoretical justification for this assumption would seem to have been that the transition would be from one homeostatic equilibrium to another, in which case a stable and sustainable fertilty level would be one of the characteristics of the ultimate end state.

Surprsingly or unsurprisingly this homeostatic assumption has continued to influence thinking and is, for example, to be incorporated in the population projections of global institutions like the UN and of the World Bank (medium variants). Such projections normally anticipate that fertility will stabilise at around the 1.9 level in the long run (the justification for this seems to be a calculation based on a termination of the tempo effect, but we have really no good reason to assume that the downward quantum process will itself come to an end). One of the underlying reasons for the existence of such a parity specific interpretation of what a homeostatic process might look like may well be a a result of failing to appreciate just what the long run impact of a steady and sustained increase in life expectancy might be. If fertility and longevity are interconnected in the way Life History Theory suggests that they might be, then there coulb be good reasons for anticipating that fertility will slowly trickle downwards just as longevity trickels upwards (Kaplan et al, 2003).

Stylised Facts of the "Second Stage"

Those who argue that the most recent fertility regime which is to be found in the developed world constitutes a second stage, or second transition, normally point to a number of stylised facts which serve to characterise it. (A good general introduction to the 'second stage' issues can be found in Sleebos, 2003, which proved expecially useful to the author in preparing this section).

1/. There has been a generalised decline in fertility rates - starting in the 1970s - in most OECD countries.

2/. There have been significant differences in the way this decline has been experienced in individual OECD countries (the Nordic and English-speaking countries, on the one hand, where the decline in fertility started earlier but later stabilised or even - in particular in the case of the US - reversed, and the Southern European countries, where the decline started later but then proceeded much faster). One consequence of this differential pace of decline is that some of the countries who were at the top of the OECD fertility league just a few decades ago are now close to the bottom, whilst others (the United States, France) which had been experiencing decline have either stabilised or even regained a little ground.

3/. There has been a general increase in the mean age of women at first childbirth across the OECD countries, but as with the fertility decline itself there have also been differences across countries in the extent of fertility-recuperation at higher ages, and differences in the distribution of births according to mothers’ age (with persistently high teenage-births characterising the fertility regime in some countries, Sobotka, 2004).

4/. There have been systematic differences across the OECD in fertility rates among women with different characteristics (with higher fertility being found among non-working women, women who work part-time, women living in married couples and women coming from either ethnic minority groups or arriving in the course of migratory movements). At the same time there has been considerable variation across countries in the size of these differences.

5/ A continuing gap has been found in most OECD countries between realised and desired fertility, with the latter (at least until very recently) tending to remain clustered around the "two-child" norm. (Evidence is growing that this may be changing, at least in some countries, see Goldstein, Lutz and Testa, 2003).

6/ There has been a tendency for fertility rates to be lower in OECD countries with:

a) lower employment and educational attainment of women

b) lower frequency of divorce and of out-of-wedlock births (or simply with more 'familiaristic' welfare traditions).

c) higher obstacles for young people in making the transition from school to the establishment of an independent home.

d) higher income of elderly people (although this finding is not as strong as the previous three). (Reference, please???).

Those wishing to hold to a strong version of 'second transition' (or value transition) theory do not cease to point to the fact that the pattern of association of some of these above-mentioned variables with fertility rates has reversed its sign relative to the relation which was the case only a few decades ago. This fits in well with their argument since amongst second transition theorists there is one common and recurring theme: that recent fertility trends have been accompanied by notable changes in attitudes and behaviour regarding sexuality, marriage, and family and household formation. Such changes include higher levels of cohabitation, pre- and extramarital childbearing, widespread use of abortion and contraception, rising levels of childlessness and divorce, as well as delays in age at first marriage and first birth. Ironically it was previously the nuclear family which was seen to be the bedrock of a stable (self reproducing) society, whilst today it is childbirth out of wedlock which is seen as the key ingredient of stable fertility.

Ideal Family Size

More recently, work on below-replacement fertility has focused attention on how social and economic development and changing ideas and values (post-modernity) serve to influence the desired number of children women wish to have (van de Kaa 1998). Earlier versions of these theories often assumed - whether implicitly or explicitly - that couples are able to implement their preferences without too much difficulty and hence the conclusion was drawn that observed long run fertility would not differ greatly from average desired family size. Whilst it is clear that declining desired family size is indeed one of the principal forces driving fertility transitions, many demographers are now becoming aware that levels of fertility may often deviate substantially from stated preferences, and this has lead to increased focus and attention being directed towards the presence of what may be considered to be 'inhibiting factors' (Lutz et al, 2006).

Fertility preferences are themselves not without ambiguity, and several concepts have been used in attempts to identify and measure them: ideal number of children, desired number of children, expected number of children (in addition to those already born), intended number of children etc etc.

The main objections to this type of procedure usually relate to the use of the concept of 'ideal family size' itself. Some authors have criticised the abstract character (Toulemon 2001) of an indicator which is aimed at measuring poorly-defined concepts such as reproductive goals, whilst others question the the validity of demographically non-specific questions which do not refer, say, to concrete factors like the already experienced childbirth (van de Kaa 2001). Yet others point to the lack of sensitivity of the concept to fluctuations in actual realised fertility (Livi Bacci and De Santis 2001).

The whole procedure of examining future childbearing preferences seems to be intrinsically fraught with difficulty. With reference to ideal family size, for example, the question might be asked as to the kind of validity which can be assigned to the reliability of the various measures used (ideal, desired, intended or expected fertility). How, for example, should such questions be worded, how does one overcome the difficulties of comparing responses across countries, what significance should be attributed to nonresponse cases and 'don’t know' answers, or even, just how useful at the end of the day are these kind of questions as predictors of future actual childbearing? (Sobotka, 2004)

All of this having been said, it is not difficult to understand the reason why the persistent and clear discrepancy between actual reproductive behaviour and declared fertility preferences, regardless of the indicator used, has continued to exert a strong attraction for those who seek to understand the low levels of realised fertility which now characterise the majority of countries in the developed world (Van Peer 2002).

The gap between intentions and outcomes is typical of the OECD world where desired family size is still normally around the two children mark while achieved fertility has almost universally fallen below (or well-below) replacement. This divergence between desired and achieved fertility is of more than passing theoretical interest sinces it raises the important question of whether the low fertility observed in the developed world is depressed as a result of transient tempo factors, or whether a more lasting process may be at work.

If the current state of affairs were merely a transient one, then fertility could be expected to rise to a level closer to the preferred level in the not too distant future (this is the view, for example, of a respected demographer like Masimo Livi-Bacci), and in the event of this being the case concern over the possible undesirable economic and social implications of prolonged low-low fertility in developed societies would be largely misplaced. On the other hand, were below replacement fertility to form part of an ongoing process, then the long term economic and social consequences would be far from insignificant.

For this reason the most recent Eurobarometer survey (European Commission, 2001) has been closely scrutinied. The survey revealed that while in most EU countries women of all ages still held to family size ideals which were above replacement level, in Austria and Germany the national averages had fallen significantly below this level (Goldstein et al, 2003). Indeed younger cohorts in Austria and Germany reported even lower ideal family sizes than the average, with results in the region of a desired family size of 1.7 children. It is not without interest to note here that Austria and Germany were among the first countries to experience declines in period fertility to well below replacement levels, and this result does at least raise the question as to whether the changing reality of actual family size may not, finally, be beginning to influence the ideals of subsequent generations. More recent evidence coming from the EU funded DIALOG study (which interviewed 30,000 people in 14 European countries on their attitudes and opinions concerning family numbers, fertility behaviour and demographic change) found that in the main the two child 'ideal' was still common across Europe, but that below replacement ideals existed in Germany, Italy, Austria and Belgium and the Czech Republic (The desired number of children per women in Germany was found to be (1,75), in Italy (1,92), in Austria (1,84), in the Czech republic (1,97) and... in the Flanders region of Belgium(1,86), Dialog Project, 2006).

The emergence of below-replacement ideal fertility, were it to persist,could mark a new stage in the evolution of below-replacement fertility regimes. As Bongaarts (2001:276) writes: "whether desired family size remains at or drops below two is the most crucial issue determining post-transitional fertility."

Despite all the above mentioned measurement difficulties, changes in fertility preferences still play a causal role in most theories of fertility decline (Lesthaeghe and Surkyn 1988, Van de Kaa 2001). Recent research on the dynamics of behavioural diffusion establishes a strong relation between desired and achieved fertility (National Research Council 2001) and theoretical models such as that built by Kohler (2001) assume a strong connection between the achieved fertility of others and one’s own desired fertility.

For Goldstein et al (2003) the most plausible explanation for the German and Austrian findings is that sub-replacement fertility ideals in those countries have emerged as a natural consequence of a history of low-fertility. Young cohorts in Germany and Austria have witnessed below-replacement fertility for their entire lives, not just the last few years. The influences of a cohort’s experience on their present fertility ideals are probably numerous. Young Austrians and Germans are not only more likely than other Europeans to have grown up in smaller families; they are more and more likely to have had friends, classmates, and cousins in smaller families as well.

So it is worth considering the possibility here that low family-size ideals may create a momentum of their own, making it difficult for would-be pro-natalist policymakers to raise fertility levels in the future. Whatsmore, if the generational-lag interpretation of fertility preferences in Germany and Austria is confirmed, we may be about to see the emergence of falling family-size ideals in other low-fertility countries, like Italy and Spain, in the not too distant future.

The Historical Record

Fertility in the developed world reached its post-World War II peak of around 2.8 births per woman during the baby boom in the late 1950s. Subsequently steep declines in fertility in the 1960s and 1970s left TFRs well below replacement, and, as has been repeatedly stressed here, in some cases extraordinarily so.

In the late 1950s regional fertility levels in the developed world ranged from a high of 3.7 births per woman in North America to a low of 2.1 in Japan, but they later converged, and by 1980 the global average was in the region of 1.8 births per woman. Since 1980 fertility levels have diverged again, with US fertility rising to a continuing 2.0 births per woman while reproductive levels in Japan and Europe have continued to remain low. In fact the United States is a major demographic 'outlier' in this whole 'transition process', since the fertility lows of the late 70s have been reversed under the impact of an unprecedented immigration shock on the one hand, while the continuing presence of high rates of adolescent pregnancy, on the other, have meant that the mean first childbirth age is still remarkably low by first world standards.

This being said, country specific variations in fertility within regions can be substantial. For example, in the European context fertility is lowest in the south, where sharp declines have occurred since 1975, and in the east, which has seen a dramatic fertility reduction post 1989. At the present time Italy, Spain and Japan - with recorded TFRs in the 1.2 to 1.3 range and high and increasing levels of life expectancy - are competing for the rather dubious status of being the world's most rapidly ageing nation.

In contrast fertility in Northern Europe, which averages nearer the 1.8 TFR mark, is significantly higher, and has shown signs of being relatively stable. Perhaps the most marked European contrast is the one to be found between France and Germany: the German TFR is close to 1.3 while the French equivalent is around 1.9. This shows that talk of a European 'average fertility rate' may, in fact, be deeply misleading.

Steep declines since 1960 have also left fertility below replacement in Thailand (TFR 1.7), and well below replacement in Singapore, Korea, Hong Kong and Taiwan (TFRs in the 1.2 to 1.3 range). The application of a rigid neo-Malthusian policy of one child per family in mainland China has also lead to a rapid decline in fertility and a TFR which is well-below replacement level (the Chinese data are notoriously unreliable it should be noted: see Lutz et al, 2005).

Homeostatic or Not?

One of the key issues which has emerged in the debate which surrounds this 'second transition' fertility shift is whether the process of sustaining fertility at or around population replacement level is a homeostatic one or not. (Wolfgang Lutz takes a rather jaundiced view on this front. Indeed he is far from accepting that current levels of lowest low fertility are even themselves a 'floor'. The only justification he claims to have found for a return to replacement fertility in what is by now an extremely voluminous literature, is the suggestion that "in the end governments will do something about it).

Perhaps the best-known exponent of the view that sustaining near replacement population constitutes a homestatic process is the Italian demographer Masssimo Livi-Bacci (Livvi-Baci 2001). Livi-Bacci uses expressions like the current potential for population maintenance being 'badly hampered' in a way which he sees as being similar to the plight of medieval fertility under the impact of the plague, or 19th century Irish fertility during the Great Famine, or - in early modern times - to the effects of WWI. He is at pains to point out that on each previous occasion population growth eventually recovered, so why, he asks, should it not recover now from the current fertility shock?

Why indeed? Well, in the first place, as David Weil asks (Weil, 2001), is it really realistic to expect fertility rates to return to a level consistent with population replacement in the mature industrial societies? What justification is there for this assumption? Before jumping to any such a conclusion, shouldn't we ask ourselves a little about the source of these homeostatic tendencies in historical populations that Livi-Bacci claims to be able to discern? Here, of course, it is impossible not to invoke the name of that patron saint of all homeostatic population models - and perhaps the most dismal of all dismal economists - the very Reverend Thomas Malthus.

The 24 trillion dollar question is whether the weakly valid homeostatic process which characterised the pre-modern Malthusian regime still operates today? Weil suggests, and I agree, that we have little reason to think that it does. Firstly, the economic and demographic mechanisms which underlay the Malthusian model have been altered radically. In particular up until the end of the nineteenth century, it was possible to argue that higher incomes in and of themselves would lead to higher population growth. In the post-industrial societies of today, however, there now seems to be little evidence for any strong relation between population growth and levels of per capita income, indeed quite the contrary seems to be the case. At the same time, in the developing world the Malthusian relation seems to have inverted, so that higher income now increasingly leads to lower population growth. As one United Nations population conference famously concluded: "Development is the best contraceptive."

The second reason that the lessons of the Malthusian regime are probably not applicable today is that the nature of the shocks that impinge on population dynamics is very different, indeed, as is argued here, we may not even be dealing here with a shock at all, but rather with one continuing 'demographic transition' which spans the whole period which starts with the origins of the fertility decline at the time of the indutrial revolution itself.

Historically the sources of demographic shocks were things like plagues, wars, the discovery of new lands,improvements in agricultural productivity (like the arrival of the potato in Ireland) etc. But the 'shock' that underlies the current seismic shift resembles none of these phenomena. Rather, it is one continuous and seamless behavioural adaptation: an adaptation whose net consequence is that people simply want to have less children, and less, and less.....

Why this should be the case is a fascinating question, and one which we are systemtically attempting to address here, but it is not one that is likely to be answered simply by limiting our field of vision to the historical record in a search for ealier equivalents.

Once we depart from the Malthusian world, the homeostatic tendencies that Livi-Bacci argues for are simply no longer present. As David Weil argues there is nothing natural or 'god given' about zero population growth, and, thus, no particular reason why we should expect fertility in any country to be at or near the replacement level.

The Low Fertility Trap

Building on this insight, and in sharp contrast to the more 'optimistic' views of a Livi Bacci, the Austrian demographer Wolfgang Lutz has gone on to raise the concern that those societies experiencing lowest-low fertility may now be caught in some kind of low fertility trap (Goldstein, et al 2003, Lutz et al 2005, Lutz et al 2006)

Lutz's starting point is the question, just how low can fertility go? As he says “We lack any good theory about the future path of fertility. In fact we cannot say anything specific about a possible lower bound” (personal communication with author). Given this level of uncertainty the question logically needs to be asked, so just what is the likely future fertility path of those societies currently experiencing lowest-low fertility? Now we know that these fertility levels are produced by the combined impact of two associated but distinct processes - a birth displacement one and a reduced cohort completed quantum (or parity) one. The issue is complex since the posponement process can itself run for many decades (and yet again, we have no good reason for assuming a final end-point for the upward displacement in first birth ages, life history rescaling and assisted fertility processes may drive the upper boundary above levels which we can currently contemplate). The question of just what kind of 'fertility recovery' can be contemplated or expected in the lowest-low fertility societies.

Now, in this context, Lutz defines the basic idea lying behind his hypothesis as being the following: once fertility falls below a certain level and stays there for sufficient time this can produce a self-reinforcing demographic regime change that is difficult or impossible to reverse. He then proceeds to base the 'low fertility trap' hypothesis on the operation of three distinct but interacting mechanisms:

1/. A population momentum component. The delay in childbirth produces very low fertility rates which last for decades, during this time there is pyramid-base shrinkage, and new generations arrive composed of much smaller cohorts. This systematically produces less and less children.

2/ An ideas propagation mechanism. This works via the idea of 'ideal family size': young people are increasingly socialized in an environment with few children, and this may result in a lower 'ideal family size' in the subsequent generation, and so on. Recent (2001) Eurobarometer readings from Germany and Austria indicate that young people may now, on average, have a below replacement ideal of family size (slide on page 8). Since preferences and expectations are important here, this can only lead fertility downwards.

3/ A negative economic feedback process due to cohort and other effects (the Easterlin thesis). Lutz, Skirbekk and Testa develop a flow chart model (page 7 of this presentation in the Adobe Acrobat) which attempts to describe this process.

Lutz's idea originates from:

(a) the observation that countries which have fallen below fertility his critical level of 1.5 TFR have generally not subsequently 'recovered' in the sense of returning to a level above 1.5. In particular the germ of the idea here comes from the work of the Australian demographer Peter MacDonald (see this paper) who was the first to note that 1.5 TFR seems to mark something of a watershed.

(b) an awareness that whilst most projections and policy were being set by the assumption that there was a likely 'homeostatic' return to near replacement fertility, there is no rigourous theoretical justification for this assumption.

As Lutz et al observe:

"Virtually all population projections for low fertility countries assume end of fertility decline at current cohort level (Eurostat) or increase (UN), while at the same time continued increases of life expectancy are assumed. To be honest: we have no good theory with predictive power. Some “soft” arguments: end of postponement, children make happy, governments will eventually do “something”. But at the same time the basic forces that brought down fertility continue to work, possibly even stronger (value change, globalization,youth unemployment)".

(c) the further observation that government policy has non-linear consequences in this area. This view differs, for example, from that of the Canadian sociologist Anne Gauthier who argues straight and simple that: Public policies have an undeniable effect on families. On the other hand it is close to the work of social network theorists who examine propagation mechansisms for ideas and values across societies. In the words of Ronald Rindfuss and his co-workers:

“Changes in attitudes likely create a feedback mechanism, influencing behavior; and changes in behavior likely create a feedback mechanism influencing attitudes.” (Rindfuss et al. 2004, p. 855)

In the terms of Lutz et al: once the number of children (siblings, friends, children seen in other families, media) experienced during the process of socialization falls below a certain level, their own ideal family size may become lower which in course may result in further declining actual family size and still lower ideals in the subsequent generation.

The idea of negative demographic momentum is closely associated with the other key contribution Lutz has made to our understanding of the "second demographic transition": his idea of a 'birth deficit'. This deficit arises due to the the continuing presence of a fertility tempo effect, wherby the increase in the mean age of childbearing results in a lasting loss of births, and these 'missing' births cause structural damage to the age pyramid.

In the main Lutz bases his economic feedback mechanism on the cohort impact theory of Richard Easterlin and his associated 'relative income hypothesis. According to Easterlin changing cohort size produces either a crowding-out (the baby boom) or a crowding-in (declining fertility) phenomenon. The hypothesis posits that, other things being constant, the economic and social fortunes of a cohort (those born in a given year) tend to vary inversely with the relative size of that cohort, which is itself approximated by the crude birth rate in the period surrounding the cohort's birth. The cohort mechanisms operate mainly through three main social institutions – the family, school and labour market. Diane Macunovich has a good summary of Easterlins ideas and their application to fertility changes in Relative Cohort Size, Source of A Unifying Theory of the Global Fertility Transition.

The operation of this general 'crowding mechanism' means that large birth cohorts face adverse economic and social conditions, higher unemployment, and lower than expected wages, outcomes which are significantly at odds with their material aspirations. As a result, they postpone family formation and have fewer children. This line of research now represents a long-standing tradition in the United States, where an ongoing body of work (Easterlin 1976, 1978, 1987, Macunovich 1998a,1998b, 2000, 2002, Bloom, Freeman, and Korenman, 1987, Korenman and Neumark, 2000) has posited the idea that the relative size of young cohorts entering the labour market has far-reaching implications for wages, inflation, unemployment rates, etc, as well as for a variety of cohort impacting factors like living standards and family behaviour. It is also now being applied in studies of the 'greying' phenomenon in the United States as the large 'boom generation' steadily approaches retirement age. .

On the other hand, the crowding-in syndrome would mean that the reduced cohorts which follow the fertility decline should find work more easy to obtain, and salaries relatively higher. This should lead to rising income expectations, which may be more difficult to sustain as the fiscal burden weighs down on younger generations with the consequence that they continually postpone starting families.

This latter eventuality seems to have relatively little empirical evidence to date to back it up (except, perhaps, very recently in Japan) so should really be treated with some caution.

Macunovich takes the theory and tries to use it to develop a general theory of the whole demographic transition from cohort effects, and I feel that at this level the argument is not convincing. The cohort dimension is however very evident in the US baby-boom phenomenon, and the subsequent fertility reaction, and indeed this is having the consequence that population ageing is being seen very much as a cohort phenomenon in the United States, but this experience is hard to generalise.

Lutz et al do, however, offer another suggestive direction for analysis: low fertiliy leads to the acceleration of societal ageing, this produces cuts in welfare and pension benefits, generates a general pessimism about the future and lowers expectations about future income. The general pessimism, coupled with anticipations of increased life expectancy, can produce increased saving for the future, and this of course can produce a drag on current consumption. The drag on consumption produces a lethargic level of economic growth, and this induces young people to delay having children in order to attempt to maintain current income. This economic chain reaction, especially in the light of what is actually happening in Germany and Japan, does seem to be one of the possible mechanisms through which the trap - should it in fact exist - might operate.

However, at the end of the day, as Wolfgang Lutz himself emphasises, what we need is more evidence. Perhaps we will find some in the next Eurobarometer survey on family intentions (due June 2006).

Lutz and Skirbekk (2004) have argued that 'policies aimed at creating the conditions that allow women to have their children at an earlier age, or at least not being driven into further delays, could turn out to be win-win strategies, combining individual health concerns with public demographic concerns.' Clearly such policies, if successful, would invert the process and recover some of the missing births as a 'reverse tempo' process results in a - one off - gain in births. Lutz points out that this possibility has encountered a certain resonance in the recently declared policy aims of the Family Federation of Finland, which now has as one of its objectives an increase in total realised fertility from 1.8 to 1.9, and this (where they to be succesful) would be achieved via a reduction in the average age at first birth from 28 to 26 years (Söderling 2005).

In support of this suggestion Lutz and Skirbekk estimate that merely terminating the process of fertility postponement in the Finnish case would bring the period TFR close to the established target of 1.9 (1.86), while any rejuvenation of fertility would push total fertility significantly above this level. However, we strongly need to bear in mind that in this area having the 'best of intentions' is simply not enough. Positing an objective is one thing, and achieving it another. If the demographic transition process has an inbuilt dynamic towards steadily higher ages at first birth and steadily lower levels of fertility, then there may be little that policy can do in the longer term to reverse this. We may be simply doing a kind of modern version of the labour of Sisyphus. What such policies may however be able to achieve is a softening of the overly dramatic (and demographically speaking structurally harmful) decline which we are currently seeing in country after country - and a like initiative from the Bavarian Parliament in Germany to compress the secondary school cycle by one year could be seen in a similar light. In any event making would-be mothers aware that they should have desired children earlier, and facilitating this approximation of wishes to reality, is surely a sound idea in and of itself.

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