Discussion of “Quan-ty, Quality and Mobility of the Popula-on” Ronald Lee University of California, Berkeley July 12, 2013 Towards a BeIer Global Economy Geneva Ronald Lee, UC Berkeley, July 12 2013 1 Chapter Review •  Terrific job of surveying an enormous literature across many topics and drawing lessons and policy recommenda-ons from it. E.g. –  Importance of global trends in educa-on –  Non-­‐formal kinds of educa-on may be more important than formal –  Importance of health and nutri-on inputs for Human Capital in developing countries –  Role of urbaniza-on in economic development –  Poten-ally enormous welfare gains through interna-onal migra-on •  Here I will touch on some topics drawing on Na-onal Transfer Accounts data. Ronald Lee, UC Berkeley, July 12 2013 2 Demographic transi-on is a useful framework for this study. Illustrate with China Support Ra-o China Support Ratio
1
1974 to 2012, adds
.8% per year to
growth per consumer
0.95
Support Ratio
0.9
Dividend phase 0.85
2012 to 2050, population
aging subtracts .4% per
year from growth per
consumer.
Pop Aging phase 0.8
Contrast between the two is
-1.2% per year.
0.75
0.7
0.65
0.6
1940
S. Asia La3n Am Africa 1960
1980
2000
E. Asia 2020
Europe 2040
2060
Date
Ronald Lee, UC Berkeley, July 12 2013 3 Public + Private Investment in kids’ human capital (rela-ve to labor income) and declining fer-lity Total spending is 5 or 6 years of labor income on total HK regardless of fer-lity. Ronald Lee, UC Berkeley, July 12 2013 4 Per capita net public transfers to children
(percent per capita labor income age 30–49)
Per capita net public transfers per child and per elder: 20 economies
around 2000 (dashed lines are medians).
30
FI
US/Twn: High for kids Low for elderly HU
JP
SI
US
SE
20
DE
TW
TH
ES
KR
10
AT
MX
CL
CR
ID
UY
PH
BR
La-n Am: low for kids high for elderly CN
Asia: Low for both 0
-10
0
Europe/Japan high for kids High for elderly 10
20
30
40
50
60
70
80
90
100
Per capita net public transfers to the elderly (percent per
capita labor income age 30–49)
Source: Tim Miller, Ch. 7, Lee and Mason, 2011 Ronald Lee, UC Berkeley, July 12 2013 5 Natural tendency for HK investment to rise as fer-lity falls. What role for policy? •  Public educa-on is more egalitarian. •  Strong public educa-on may reduce the intergenera-onal transmission of socioeconomic status. •  Strong externali-es to educa-on also argue for large public role. •  Maintain public spending as share of GDP as fer-lity declines. Ronald Lee, UC Berkeley, July 12 2013 6