The day after Christmas deserves to be a quiet day. A day to sit in a cosy room and read a book or web-site. Can I suggest a few hours spent on a website called Our World in Data.

I have used a number of charts from this site in the Newsletter along the way. The more I explore the changes in the population the more interesting the site becomes. (It also has some of the best COVID coverage, if you can bear to look). Some recently discovered charts have driven home the value of the site for me:

Child Mortality and Fertility

These Newsletters have followed the logic of the academic literature. This argues that the early stages of the decline in fertility are driven by child mortality. In a world where half of all children fail to reach adulthood, people have more children. As child mortality falls so does fertility. Our World in Data provides the perfect graphic.

See "Numbers" Section for chart

This chart returns us to the example of Germany. Germany is leading the ageing way along with Japan. It shows the number of children born and those that survive past the age of 5. Between 1840 and 1870, the number of surviving children was virtually the same as between 1940 and 1970. In the nineteenth century, an average of five children per female were born. Sadly half of them died, leaving a family around the replacement level of 2.5 (at that time). A century later the number of children dying had plummeted and the birth rate with it. Families however continued to replace themselves. They averaged 2.2 - 2.5 children per female. Only in the 1970’s did the birthrate fall below the replacement level. I discussed in Newsletter #003 possible reasons for the second phase of fertility decline.

Immigration and Population.

As fertility in more and more countries declines, populations and markets decline with it. Increased longevity initially mitigates the impact of falling fertility. More people live longer, so the drop in the number of babies can be out weighed by less people dying. As that influence erodes, countries must increasingly rely on immigration to maintain their population. Our World in Data again provides the perfect chart:

See "Numbers" Section for chart

The chart shows the changes in the population of Germany with and without immigration. The red line is the underlying population change based on children born in Germany. It goes negative in the mid seventies. This is when the fertility rate drops below the replacement level. Immigration returns the population to growth in the nineties and again in recent years.

I recently took a holiday in Romania. We travelling with a guide through Transylvania. We saw many modern factories run by German companies. They had come to capitalize on the educated workforce. Our guide pointed out that there was now a labour shortage and many factories were working part time. Many working age people had left to work in other parts of Europe. The Romanian chart looks very different.

See Numbers Chart for Data

In this case the drop in fertility was compounded by migration. Romania dropped below replacement level around 1993. At the same time migration accelerated. The population has been in decline ever since.

The key issue for governments is how to fund social care with an ageing and declining population. The index for this is the “Dependency Ratio”. The number of people over 65 and under 15 divided by the working population. The lower the number the easier it is for taxation to provide care. Along with many countries China will have a growing issue by the middle of the century:

At first sight the task looks manageable. The dependency ratio returns to a level close to 1960. The difference of course is that in 1960 the majority of dependents were young children. By 2060 the majority of the dependents will be old or very old.

Do try adding your countries to the chart. (https://ourworldindata.org/grapher/age-dependency-ratio-projected-to-2100?time=earliest..2100&country=~CHN)

In 2019 Romanians abroad remitted a total of €3.8Bn back to Romanian. This will at least help fund social care for the elderly. Of that €2.9bn came from Romanians working elsewhere within the E.U.

Books for the Christmas Holidays

In case you need a book for the holidays instead. Just a short selection of books I have found interesting in my intellectual safari:

Living for Longer

The New Long Life by Andrew Scott and Linda Gratton. Published by Bloomsbury

The Upside of Aging. Paul H Irving. Published by Wiley

Extra Time by Camilla Cavendish published by Harper Collins

The Neuroscience of Ageing

The Changing Mind by Daniel Levitin. Published by Penguin.

Demographics

Agescape by Paul Wallace published by Nicholas Brealey (Old but still worth a read)

The Longevity Economy by Joseph Coughlin. Published by Public Affairs.

This Newsletter documents my personal intellectual expedition into the world of the ageing consumer. Perhaps these suggestions will provoke a journey of your own,

Hoping you have restful holiday.