The Wrong Apocalypse (NPG Booknote)

• Lindsey Grant
• June 1, 1999
• Forum Papers
• Forum Paper
• 0 Comments

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An NPG Forum Paper
NPG Booknote
by Lindsey Grant
June 1999

Peterson and his staff have assembled an impressive array of evidence about one consequence of population change. As population growth stops or reverses in the modern world, the population ages. This generates fundamental social and economic changes, which he explores in depth. The cost of taking care of the elderly may lead to fiscal collapse in the major industrial nations. He talks of an “ice-berg”, a “great hazard…that will likely dwarf the other challenges:’ I think he has mistaken a secondary population issue for the fundamental one, but — particularly after one gets past the hyperbole of the first two chapters — he has effectively focused attention on issues which developed nations must face.

The Dependency Ratio

Peterson calls it “global aging”, but he is really talking about the developed world,* particularly western Europe and Japan. (The problem is less serious in the United States, Britain and Australia.) In Europe, women may be expected to bear 1.42 children on average — down from 2.57 fifty years ago. For Italy and Spain, the number (i.e. the total fertility rate) is 1.2 or less. This is just above the “one child family” that China proclaims but does not approach. (Replacement level fertility is about 2.05 children at European mortality levels.) UN statisticians expect the population of western Europe to decline by 10% to 376 million in 2050—and Italy by 28% to 41 million, even with a rise in fertility.

The “dependency ratio” measures the numbers of the old and young as a percentage of the working-age population. (It is, by the way, a rather crude measure. The UN defines the working age population as ages 15-64, but not all those people work. The book’s central point is that falling fertility raises the ratio, and shrinking working-age populations cannot support the rising numbers of the old — at least in the way they have become accustomed to. While some people 65 and over still work. Peterson follows the UN practice, and so will 1, though the US Census Bureau defines “working age” as 18-64.) The book’s central point is that failing fertility raises the dependency ratio, and shrinking working-age populations cannot support the rising numbers of the old at least in the way they have become accustomed to. He documents the point well. In much of Europe, one can live almost as well on unemployment insurance as by working, and retire very young on liberal disability pensions. Let me add that it works right now because when a population stops growing, the first consequence is to lower the dependency ratio. There. arc fewer children, and most people are in their working years. It is a temporary phase. As time passes, those people get old, there are fewer new workers, and the dependency ratio rises. Right now, Europe can just barely afford its welfare net. Soon, it won’t be able to. The dependency ratio in Germany, for example, is now remarkably “favor-able.” It went down from 59% in the early ’70s to 44% in the late ‘eighties — and with so many working-age people. unemployment became the major economic problem. It has started rising and it may reach 71% in 2050.

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