The decline in fertility rates below the replacement level will inevitably lead to a decrease in the fraction of the working-age population. Additionally, with rising life expectancy, this trend will increase the dependency ratio, which is the ratio of dependents to the working-age population. Yet, these changes are not indicative of a decline in aggregate labor productivity and innovativeness, nor a reduction in the growth of income per capita.
The decline in fertility rates has generated several major benefits for the growth process. First, a reduction in population growth diminishes the dilution of resources over a larger population, increasing resources per worker and thus labor productivity and innovativeness per capita. Second, the reduction in the number of children allows for greater investment in each child’s education, contributing ultimately to the productivity and innovativeness of the working-age population. Third, fertility decline fosters female labor force participation further contributing to productivity and innovativeness per capita. Fourth, since the improvement in life expectancy is associated with a significant increase in the productivity of people beyond their current retirement age, labor productivity can be further augmented. Hence, while declining population growth decrease in the size of the working-age population, the productivity-adjusted size of this population may in fact increase sustaining innovation and productivity growth.
Thanks for your comment, Karl. I suppose it all makes sense in the abstract. In this model, is there a point at which falling fertility rates will level off again?
Do you believe that the human condition, and in particular the rate at which we can adapt to progress, places an upper limit on the advance of technology?
According to all models where fertility is a choice variable, fertility rates may stabilize at or below replacement level, but could decline indefinitely. However, as I explained above, even if fertility rates will remain below the replacement level, productivity per capita is very likely to continue to grow.
Our rate of adaptation could indeed constrain the pace of technological progress. However, future technologies, such as AI, are likely to foster our ability to adapt and therefore would mitigate this constraint on the pace of technological progress.
Posthuman tech seems like a pretty big wild card in a framework for sustainability. Also hard to imagine a future world in which our sexual impulses are almost entirely vestigial. I guess we're already most of the way there! It just feels like the modern era, as envisioned, eventually takes us somewhere that isn't fully human, in which case the definition of "standard of living" goes up for grabs.
The decline in fertility rates below the replacement level will inevitably lead to a decrease in the fraction of the working-age population. Additionally, with rising life expectancy, this trend will increase the dependency ratio, which is the ratio of dependents to the working-age population. Yet, these changes are not indicative of a decline in aggregate labor productivity and innovativeness, nor a reduction in the growth of income per capita.
The decline in fertility rates has generated several major benefits for the growth process. First, a reduction in population growth diminishes the dilution of resources over a larger population, increasing resources per worker and thus labor productivity and innovativeness per capita. Second, the reduction in the number of children allows for greater investment in each child’s education, contributing ultimately to the productivity and innovativeness of the working-age population. Third, fertility decline fosters female labor force participation further contributing to productivity and innovativeness per capita. Fourth, since the improvement in life expectancy is associated with a significant increase in the productivity of people beyond their current retirement age, labor productivity can be further augmented. Hence, while declining population growth decrease in the size of the working-age population, the productivity-adjusted size of this population may in fact increase sustaining innovation and productivity growth.
Thanks for your comment, Karl. I suppose it all makes sense in the abstract. In this model, is there a point at which falling fertility rates will level off again?
Do you believe that the human condition, and in particular the rate at which we can adapt to progress, places an upper limit on the advance of technology?
According to all models where fertility is a choice variable, fertility rates may stabilize at or below replacement level, but could decline indefinitely. However, as I explained above, even if fertility rates will remain below the replacement level, productivity per capita is very likely to continue to grow.
Our rate of adaptation could indeed constrain the pace of technological progress. However, future technologies, such as AI, are likely to foster our ability to adapt and therefore would mitigate this constraint on the pace of technological progress.
Posthuman tech seems like a pretty big wild card in a framework for sustainability. Also hard to imagine a future world in which our sexual impulses are almost entirely vestigial. I guess we're already most of the way there! It just feels like the modern era, as envisioned, eventually takes us somewhere that isn't fully human, in which case the definition of "standard of living" goes up for grabs.