Is low fertility really a problem?: Population aging, dependency, and consumption

Longer lives and fertility far below the replacement level of 2.1 births per woman are leading to rapid population aging in many countries. Many observers are concerned that aging will adversely affect public finances and standards of living. Analysis of newly available National Transfer Accounts da...

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Bibliographic Details
Published in:Science (American Association for the Advancement of Science) 2014-10, Vol.346 (6206), p.229-234
Main Authors: Lee, Ronald, Mason, Andrew
Format: Article
Language:English
Subjects:
Age Factors
Aging
Birth Rate - trends
Constraining
Consumption
Demographics
Economics
Economics and Finance
Female
Fertility
Governments
Humanities and Social Sciences
Humans
Income
Income Tax
Living Standards
Population
Population Growth
Purchasing
Reproduction
Socioeconomic Factors
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Summary:Longer lives and fertility far below the replacement level of 2.1 births per woman are leading to rapid population aging in many countries. Many observers are concerned that aging will adversely affect public finances and standards of living. Analysis of newly available National Transfer Accounts data for 40 countries shows that fertility well above replacement would typically be most beneficial for government budgets. However, fertility near replacement would be most beneficial for standards of living when the analysis includes the effects of age structure on families as well as governments. And fertility below replacement would maximize per capita consumption when the cost of providing capital for a growing labor force is taken into account. Although low fertility will indeed challenge government programs and very low fertility undermines living standards, we find that moderately low fertility and population decline favor the broader material standard of living.
ISSN:0036-8075
1095-9203
DOI:10.1126/science.1250542