Does Falling National Fertility Increase Income Inequality? from The Economist

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In poor countries lower fertility is usually good for the economy. But it can also increase inequality.

ECONOMIES benefit when people start having smaller families. As fertility falls, the share of working-age adults in the population creeps up, laying the foundation for the so-called “demographic dividend”. With fewer children, parents invest more in each child’s education, increasing human capital. People tend to save more for their retirment, so more money is available for investment. And women take paid jobs, boosting the size of the workforce. All this is good for economic growth and household income. A recent study estimated that a decrease of Nigeria’s fertility rate by one child per woman would boost GDP per head by 13% over 20 years. But not every consequence of lower fertility is peachy. A new study by researchers at the Harvard School of Public Health identifies another and surprising effect: higher inequality in the short term.

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Source: The Economist, Aug 11, 2012.

2 responses to “Does Falling National Fertility Increase Income Inequality? from The Economist

  1. Val

    The smarter are more easily educated and make more money with that intelligence and education. They also can see ahead better and have much fewer children, either from education in ecology or knowing the costs of raising a child properly.
    The poor tend to be less educated and less smart. If their fertility rate falls, then in the next generation, there is less demand for jobs, so higher wages. The problems are overshoot and momentum. They keep the population far beyond eco-capacity. As depletion and pollution effects set in the region, they crash. Some escape to the next region, then that region collapses.
    Nigeria? With a doubling time from 2010 of 19 years and their resources, already stretched and depleted, they simply can not avoid crashing before doubling.

  2. You must crack the nuts before you can eat the kernel.

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