Four Billion More People but Fewer Children:
The Peculiar Demography of the 21st Century
and its Economic Implications
Jane Menken Distinguished Lecture
University of Colorado
March 2, 2015
David Lam
Department of Economics
and Population Studies Center
University of Michigan
Overview of world population
• The world currently has about 7.2 billion
people.
• We hit 7 billion people in 2011.
• Quick review of how we got here:
18
16
14
12
10
World population
From 1960:
World population doubled in 39 years
The world added 4 billion people in 51 years
This will almost surely never happen again
8
2011: 7 Billion
1999: 6 Billion
1987: 5 Billion
1974: 4 Billion
1960: 3 Billion
1930: 2 Billion
6
4
2
1800: 1 Billion
0
1800
From 1950: UN World Population Prospects: 2012 revision
1900
2000
2100
16
U.N. projections of world
population to 2100
14
High, Medium, and Low Variants
18
16.6 Billion
12
10
8
Increase of 4 billion
projected between 2011
and 2100
2011: 7 Billion
1999: 6 Billion 6.8 Billion
1987: 5 Billion
1974: 4 Billion
1960: 3 Billion
6
4
2
0
1800
10.9 Billion
From 1950: UN World Population Prospects: 2012 revision
1900
2000
2100
Can the World Support Another 4
Billion People?
• Ways of thinking about this question:
• Look back at the previous addition of 4 billion
people.
• Look at the demography of the next 4 billion
compared to the previous 4 billion.
• Consider the economic implications of 21st
century population growth.
2.5%
2.0%
Annual growth rate of world population
1968
2.08%
UN estimates
and projections
1.5%
1.0%
0.5%
2010
Pre-1950 estimates 1.18%
0.78%
0.0%
0.11%
-0.5%
-0.70%
UN Population Division Estimates - 2012 revision
-1.0%
1900
1950
2000
2050
2100
50
Demographic Transition
45
World, 1950-2015
40
35
30
Crude Birth Rate
25
Rate of Natural Increase
20
19.4
15
11.1
10
8.3
5
Crude Death Rate
per 1000 population
0
1950 1960 1970 1980 1990 2000 2010
50
Demographic Transition
45
Southeast Asia
40
35
30
Rate of Natural Increase Crude Birth Rate
25
20
18.0
15
11.6
10
6.4
5
Crude Death Rate
per 1000 population
0
1950 1960 1970 1980 1990 2000 2010
60
50
Demographic Transition
Sub-Saharan Africa
Birth rate
40
30
36.2
Rate of Natural Increase
23.6
20
Death rate
10
per 1000 population
0
1950 1960 1970 1980 1990 2000 2010
12.6
6
5
4
3
Total Fertility Rate
World
5.0
Decline of 82%
relative to
replacement fertility
Decline of 50%
from 1950 to 2010
2.5
2
1
UN Population Division Estimates - 2012 revision
0
1950 1960 1970 1980 1990 2000 2010
8
Total Fertility Rate
7
6
5
4.8
4
3
2
1
2.8
2.2
East Asia
1.6
UN Population Division Estimates - 2012 revision
0
1950 1960 1970 1980 1990 2000 2010
Overview of last 50 years
• World population grew faster than it has ever
grown before or ever will grow again.
• Broadly similar patterns of population change
across developing countries.
– Key exception is slower fertility decline in SubSaharan Africa
• This period should be important in
understanding links between population and
development.
What happened to food
availability during this period of
unprecedented population
growth?
350
World Food Production
1961-2013
300
(1961=100)
337
250
232
200
150
145
100
50
1960
Food and Agriculture Organization
1970
1980
1990
2000
2010
450
400
350
India Food Production
1961-2013
422
(1961=100)
300
273
250
200
155
150
100
50
1960
Food and Agriculture Organization
1970
1980
1990
2000
2010
450
400
350
Africa
Food Production
1961-2013
447
380
1961=100
300
250
200
150
117
100
50
1960
1970
1980
1990
2000
2010
What has happened to
poverty?
100
90
80
70
60
50
40
30
20
10
0
Percent in Poverty, 1981-2010
Low and Middle Income Countries
< $2.00 per day
< $1.25 per day
40.7%
20.6%
World Bank estimates
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011
100
90
80
70
60
50
40
30
20
10
0
Percent in Poverty by Region, 1981-2010
<$1.25 per day
Sub-Saharan Africa
48.5
East Asia
Latin America
World Bank estimates
31.0
South Asia
12.5
5.5
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011
4.0
Number in Poverty (Billions)
3.5
Low and Middle Income Countries
3.0
2.5
< $2.00 per day
2.5
2.0
1.5
< $1.25 per day
1.0
< $1.25 per day (excluding China)
1.3
1.1
0.5
0.0
World Bank estimates
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008
What has happened to
education in developing
countries?
100% Percentage of cohort with
90% primary schooling, Brazil
80%
70%
Female 72%
64%
60%
50%
Male
40%
Note that school-aged population
grew at close to 4% per year for
30%
much of this period
20%
10%
Census data via IPUMS-International
0%
1950
1960
1970
1980
1990
Year age 10
1 Proportion of cohort with
0.9 primary schooling, Thailand
Female
0.8
0.7
0.6
Male
0.5
0.4
Similar patters are seen in all
0.3
regions, including Africa – rapid
increases in schooling, with
0.2
narrowing of gender gap
0.1
Census data via IPUMS-International
0
1950
1960
1970
1980
1990
23
Year age 10
Fertility decline and investments in children
• Increase in education is directly related to
declines in fertility
• Transition from large numbers of children with
low investments to smaller families with
higher investments
• This is a major component of economic
development
Lessons of last 50 years
• Unprecedented population growth did not lead to
increases in starvation or poverty or stagnation in
education
• Reasons
–
–
–
–
Major technological advances
Market responses
Globalization
Declines in fertility, increases in education
• Many caveats:
– Unequal outcomes across countries and within countries
– Environmental problems, climate change
– Recent increases in commodity prices
21st Century Demographic Change
• Comparison to 20th Century Demographic
Change
• Sources of uncertainty
• Demography of Working-Age Population
• Regional Variation
• Implications for Employment and
Development
Annual population growth rate
3.0%
2.5%
2.0%
1.5%
World
North America
0.5%
Asia
0.0%
2100
2090
2080
2070
2060
2050
2040
2020
2010
2000
1990
1980
1970
1960
1950
-0.5%
UN Medium Variant Projections - 2012 revision
2030
1.0%
8
Total Fertility Rate, projections to 2010
7
6
5
4
3
2
East Asia
1
2100
2090
2080
2070
2060
2050
2040
2030
2020
2010
2000
1990
1980
1970
1960
1950
0
UN Medium Variant Projections - 2012 revision
Components of Population Growth
• Most current population growth is inertial
growth from the population growth of the
1960s and 1970s
• Many countries already have replacement
fertility, but they continue to grow
• The dynamics of the Demographic Transition
mean that the components of growth will be
very different in the 21st century
7
World population,
1950-2011
6
65+
0.2 billion in 1960,
rising to 0.5 in 2011
3 billion in 1960, rising to
7 billion in 2011
4
3
UN Medium variant projections
2
1
2010
Children (0-14)
2000
1970
1960
1950
1.1 billion in 1960, rising to
1.9 in 2011
1990
1
5
3
1.8 billion in 1960, rising
to 4.6 in 2011
2
6
4
Working age (15-64)
1980
Billion
5
0
7
0
World population,
Elderly 65+
1950-2100
0.5 billion in 2011, rising to 2.4
in 2100
7 billion in 2011, rising to
10.8 billion in 2100
Billion
Working age (15-64)
4.6 billion in 2011, rising
to 6.5 in 2100
UN Medium variant projections
2100
2090
2080
2070
2060
2050
Children (0-14)
2040
2030
2020
2010
2000
1990
1980
1970
1950
1.9 billion in 2011, roughly
constant to 2100
1960
11
10
9
8
7
6
5
4
3
2
1
0
11
10
9
8
7
6
5
4
3
2
1
0
World population, age distribution
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
2070
2080
2090
2100
100%
Currently about 8%,
90%
Elderly 65+
rising to 22%
80%
70%
60%
Currently about
Working age (15-64)
65%, falling to 60%
50%
40%
Peak of 38% in
30%
1960s, falling to 18%
20%
Children (0-14)
10%
UN Medium variant projections
0%
4
3.5
3
Billion
2.5
2
1.5
850 million in 2011, rising
to 3.8 billion in 2100
3 billion of the additional 4
billion will be in Africa
2011, rising to
507 million in
2100
460 million in 2011, rising
to 2.4 billion in 2100
370 million in 2011, rising
Children
to 850 million in 2100
UN Medium variant projections
3.5
3
2.5
2
(0-14)
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
2070
2080
2090
2100
0
65+
Working age (15-64)
1
0.5
4
Population of sub-Saharan
Africa, 1950-2100
26 million in
1.5
1
0.5
0
Currently about 3%, rising to 13%
65+
Working age (15-64)
Peak of 45% in
1980s, falling to 22%
Currently about 54%,
rising to 65%
Children (0-14)
UN Medium variant projections
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
2070
2080
2090
2100
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Age distribution, sub-Saharan Africa
How can we add 4 billion people to the world
without adding any children?
• Populations grow because births exceed
deaths
• We do not need the number of children to
increase – we just need the number of new
children to be greater than the number of
people dying (mostly old people)
Population growth and age structure during the
Demographic Transition
12billion
billion
added
billionadded
addedbetween
21billion
added
between
between
Period
and
between
Period
and
Period
43 and
4, all12old
5,
2,
people
3,all
all young
young
and middle
middle
people
and old
3
2.5
Billion
2
1.5
Period 5 9 billion
Period 4 8 billion
Period 3 6 billion
Period 2 4 billion
1
0.5
0
Young
Period 1 3 billion
Middle
Old
Increase in population 0-14 over 15 year periods
60%
56%
54%
50%
40%
10%
46%
44%
41%
32%
30%
20%
49%
47%
26%
19%
18%
12%
10%
10%
3% 4%
0%
-3%
-10%
-6%
World
Latin
America
-5% -5%
Asia
SS Africa
1955-1970
1970-1985
1985-2000
2000-2015
2015-2030
Implications for the Labor Market
• 20th century population growth was
characterized by rapid growth in children and
youth
• This put pressure on schools and the youth labor
market
• The global labor market in the 1970s and 1980s
saw rapid increases in the number or young
unskilled workers in developing countries
• Labor market dynamics are very different in the
21st century
7
World working-age population,
1950-2100
6
4.6 billion in 2011, rising
to 6.5 billion in 2100
4
5
1.3 billion in 2011, rising to
2.5 in 2100
4
Middle (25-44)
3
3
2.0 billion in 2011, rising
to 2.7 in 2100
UN Medium variant projections
2
1
2100
2090
2080
Young (15-24)
2070
2040
2030
2010
2000
1990
1980
1970
1960
1950
1.2 billion in 2011, rising to
1.3 billion in 2100
2060
1
2050
2
2020
Billion
6
Old (45-64)
5
0
7
0
•
•
•
•
•
Components of Growth in the Working-Age
Population
Consider a simple accounting of the 15-64 age
group
New entrants in a year are those who turn
age 15
People age out if they turn age 65
Some 15-64 year-olds also die, another source
of exit
These components determine the growth of
the working-age population
Growth of working-age population, Asia
100
80
Aging in
Aging out
Millions
60
Net entrants
40
20
Deaths
2100
2090
2080
2070
2060
2050
2040
2030
2020
2010
2000
1990
1980
1970
-20
1960
0
Growth of working-age population, Latin America
12
Aging in
10
Aging out
Net entrants
6
4
2
Deaths
0
2100
2090
2080
2070
2060
2050
2040
2030
2020
2010
2000
1990
1980
-4
1970
-2
1960
Millions
8
Growth of working-age population, Sub-Saharan Africa
60
Aging in
50
Net entrants
30
20
Aging out
10
2100
2090
2080
2070
2060
2050
2040
2030
2020
2010
2000
1990
1980
1970
0
Deaths
1960
Millions
40
Growth of working-age population, Sub-Saharan Africa
4.0%
Aging in
3.0%
Net entrants
2.0%
Aging out
1.0%
2100
2090
2080
2060
2050
2040
2030
2020
2010
2000
1990
1980
1970
2070
Deaths
0.0%
1960
Annual growth rate
5.0%
Increase in working-age population (15-64)
over 15 year periods
60%
50%
40%
30%
54% 53%
52%
51%
47%
45%
47%
41%
39%
38%
36%
33%
32%
29%
27%
25%
20%
14%
26%
14%
11%
10%
0%
World
Latin
America
Asia
SS Africa
1955-1970
1970-1985
1985-2000
2000-2015
2015-2030
Growth of working-age population, 2015-2030
70%
65%
Total
60%
15-24
25-44
45-64
50%
46%
40%
34%
30%
20%
10%
53%
53%
27%
25%
14%
14%
7%
11%
9%
5%
0%
-4%
-10%
World
11%
Latin America
-1%
Asia
Sub-Saharan
Africa
Demography of labor market
• The world’s working-age population will increase
by 650 million, a 14% increase
– We will need over 40 million jobs per year to
maintain current employment rates
– Sub-Saharan Africa will need 1.6 million new jobs per
month by 2025-2030
• This is a challenge, but:
– Working-age population increased by 960 million
between 2000 and 2015, an increase of 25%
– Youth component is growing at a slower rate than
overall working-age population in all regions
Youth bulge and youth unemployment
• The youth component of the labor market grew
rapidly in recent decades
• Murray Leibbrandt (University of Cape Town) and
I have been investigating the impact of this
growth on youth unemployment
• Many people have linked the “youth bulge” to
youth unemployment and to social unrest in
regions such as the Middle East
• The slower growth of the youth population in
coming decades may have positive impacts on
youth labor market outcomes
Size of population aged 15-24
(1960=1.0)
11
Kenya
10
9
8
7
6
Nigeria
5
4
Egypt
India
3
Indonesia
2
Brazil
1
0
1960 1970 1980 1990 2000 2010 2020 2030
Population 15-24/Population 15-64
0.45
0.4
0.35
Nigeria
Kenya
0.3
0.25
0.2
Egypt
India
Indonesia
Brazil
0.15
1960 1970 1980 1990 2000 2010 2020 2030
Annual growth rate of population 15-24
0.06
0.05
0.04
0.03
0.02
0.01
0
-0.01
Kenya
Nigeria
Egypt
India
Indonesia
Brazil
-0.02
1960 1970 1980 1990 2000 2010 2020 2030
Pop 15-24 – Annual growth rate
Ethiopia
0.028
Nigeria
0.022
Kenya
0.012
Pakistan
0.011
India
0.005
Mexico
0.003
Brazil
0.000
USA
-0.001
Egypt
-0.003
Indonesia
-0.004
Thailand
Spain
-0.006
1975
2015
-0.012
Germany -0.023
China -0.024
-0.03
-0.02
-0.01
0
0.01
0.02
0.03
0.04
0.05
Figure 3. Youth unemployment rate by youth proportion
of the working-age population
.6
Less developed countries
OLS regression line, LDC
Male unemployment, most recent year
More developed countries
0
.1
.2
.3
.4
.5
OLS regression line, MDC
.15
.2
.25
.3
.35
.4
Youth proportion of working-age population
Source: Author's estimations using data described in text
.45
.6
Africa
.5
Réunion
.3
.4
South Africa
Tunisia
Gabon
Namibia
Botswana
Lesotho
Zambia
.2
Sudan
Mauritius
Algeria
Morocco
Egypt
Ghana
.1
Senegal
Mali
Sierra Leone
UgandaZimbabw
Madagascar
Tanzania
Burkina Faso
Ethiopia
Liberia
Benin
0
Male youth
unemployment
rate by youth
share of
working-age
population,
Africa, most
recent year,
Africa
.15
.2
.25
.3
.35
Pop 15-24/ Pop 15-64
.4
.45
.2
Figure 5. Change in youth unemployment rate by change in youth ratio
Mean for 2000-2009 minus mean for 1990-1999
More developed countries
Developing countries
-.2
-.1
0
.1
OLS regression line
Most countries had
declines in youth share of
working-age population;
most countries also had
increase in male youth
unemployment.
-.06 -.05 -.04 -.03 -.02 -.01 0
.01 .02
Change in youth ratio
.03
.04
.05
.06
Table 2. OLS Regressions: Log of youth unemployment rate
Log (P1524/P1559)
Male-A
Male-D
Female-A
Female-Dev
0.129
[0.176]
-0.056
[0.290]
0.397
[0.166]**
-0.115
[0.319]
Annual growth rate
of Pop 15-24
1.92
4.77
[0.657]*** [0.876]***
1.71
[0.684]**
4.40
[1.001]***
Annual growth rate
of GDP
-1.17
-0.92
[0.277]*** [0.323]***
-0.63
[0.276]**
-0.82
[0.322]**
leads toX higher youth
Country Fixed Effects More
X rapid growth
X
X
Year Fixed Effects
X
X for both men
X and women.
X
unemployment
N
1410
701
1410
701
R2
0.82
Sample
Male, all
countries
0.88
Male,
developing
countries
0.87
Female, all
countries
Robust standard errors in brackets
* significant at 10%; ** significant at 5%; *** significant at 1%
0.90
Female,
developing
countries
How big are these effects?
• Many countries have experienced declines in
the growth rate of the youth population from
4% per year to 0%.
• What would be the impact on youth
unemployment of this decline?
• 4.8x0.04= 19.2, so a decline of 0.04 implies a
19% decrease in youth unemployment (about
3.5 percentage points).
• Substantial, though modest relative to
differences across countries.
Conclusions
• 20th century population growth was driven by an
increase in children and youth, with resulting pressures
on schools and youth employment.
• 21st century population growth will have little or no
growth in children, with growth concentrated in older
workers and retirees.
• The global labor market is changing from a rapid influx
of young low-skilled workers to a relatively constant
number of better-educated workers.
• Sub-Saharan Africa will continue to have growth of
children and youth, though its population will shift into
working ages.
• The slowdown in growth of youth population shold
have positive consequences for youth employment.