Chapter Two: Population; "What Happens When We All Live to 100" & "The US Economy's Big Baby Problem"

Katie Taylor
September 28, 2014

Article: Horror in a Mass Sterilization Camp by Carol Kuruvilla

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The indian government wants to control their population growth, but this is very difficult in areas were women don't often have access to birth control, so four government employed doctors performed sterilization operations on 103 women in one day, then they left them in a field to recover and many died from infections. 

Map:  I chose Eastern Asia because it houses 1/4 of the worlds population. China alone has an astounding 1.3 billion, which is the highest population of any country. The map also features Taiwan which is the 8th most densely populated country in the world and Japan which has the highest life expectancy and the oldest population.


Model: "The Demographic Cycle"

The Demographic Transition model was first invented by Warren Thompson in 1929. The model demonstrates the five stages that a country's birth and death rates go through as the country develops over time. In the first stage (when a country is still quite undeveloped) the birth and death rates are close together, but as time progresses and medicine becomes better the death rate plummets and the population skyrockets in stage two. However, as the country approaches stage three birth control becomes available and women start choosing to have fewer children causing the birth rate to drop. Even with the low death rates when the country reaches the end of stage four and enters stage five the population is declining because the birth rates are now too low to replace the number of people dying. If this model is correct it will mean that the world population will drop drastically in the future.


Readings:
What Happens When We All Live to 100 by Greg Easterbrook
The US Economy's Big Baby Problem by Derek Thompson
Chapter Two: "Population"
Question: Despite the public's positive desire for longevity, what problems do an aging population present for the economy?

Around the world longevity has always been desired and respected. People are taught to respect their elders and strive to live to a ripe old age themselves.  With current advances in medicine and genetic research, we are well on our way to the era of the centenarians. Each year the newborn is expected to live an estimated three months longer than those born the previous year. But is this really good for the economy? 

Two hundred years ago the world was concerned with the Population Explosion, but in recent years the concern in developed countries has actually been population shrinkage and an aging population. The new fear is that the fall in Crude Birth Rates (CBR) and Crude Death Rates (CDR) will result in Zero Population Growth causing the economy to collapse. The Demographic Transition that occurs when people live longer and CBR declines puts tremendous stress on the work force because the elderly need to be supported.  The elderly no longer contribute to the economy by working and generating income, instead they require expensive health care and social security checks.

As medicine and technology has improved, the average life expectancy at birth in America has gone from 47 years to 79 years. The U.S. appears to be entering what Thompson’s Demographic transition cycle refers to as at the 4th stage in which the population is ceasing to grow and begins to simply age. As you can see in the figure below if these trends continue in 100 years the population pyramid of the U.S. demographic will be very top heavy. If this occurs it will crush the work force with taxes and create a huge over flow of empty jobs because there simply won't be enough people to fill them. 

Another problem an aging population presents for the economy is the decrease in the amount of money the average family spends per year. People with children spend about $14,000 per child each year. The elderly with grown or no children have no need for these large expenditures. If there were no longer be a large enough demand for the supply the markets geared towards adolescents and children would take a huge hit. Universities, a major revenue generator in our economy, would find themselves struggling to get enough students enrolled and would have to redirect their advertising efforts towards getting senior citizens to take classes. College towns that had thrived on youth culture would begin to have more elderly inhabitants and have to build fewer bars and more hospitals. So although living to one hundred may be the shared goal of many, for the sake of the economy we better hope that never happens.