Fertility and Literacy in India’s States

Higher female literacy is a reliable predictor of lower fertility and improved prosperity.

In a previous article, we highlighted a clear connection in sub-Saharan Africa between a country’s total fertility rate (TFR = average number of children per woman) and its young female literacy rate. The data showed that higher literacy may set off a chain reaction that results progressively in lower infant mortality, improved health for women, and lower fertility. While literacy rises to 90%, fertility falls gradually. Above 90%, it falls precipitously.

800px-Exams_in_Jaura,_India
End of the year exams in Mahatma Gandhi Seva Ashram, Jaura, India. © Yann Forget / Wikimedia Commons.

In turn, this lower fertility can, under the right conditions, open a window of opportunity for the economy to realize a demographic dividend. Read more

Future Hubs of Africa and Asia

On UN projections between 2015 and 2050, the world population will grow by nearly 2.38 billion people, from 7.35 billion to 9.73 billion. Although this 32% growth is a big increase, it marks a slowdown from the 66% growth rate recorded in the preceding 35 years (1980-2015). Total Fertility Rates (TFRs) have come down all over the world and are expected to continue falling.
Screen Shot 2018-04-01 at 4.15.49 PM

About half of the 2.38 billion increase will take place in sub-Saharan Africa and nearly 40% in Asia. India is the biggest contributor with a net addition of 394 million, followed by Nigeria (216m), Pakistan (120m), DR Congo (118m) and Ethiopia (89m). By 2050, all of these countries will feature in the top 10 populations by size, a list that will include the United States (expected to rank fourth) but not one European country. Outside of Africa and Asia ex-China, regional populations will be growing slowly (the Americas), stagnating (China, Europe), or receding (Japan, Eastern Europe). Read more

Notes from the Wharton Africa Business Forum

The Wharton Africa Business Forum took place in Philadelphia on November 3-5, 2017. Present were the Finance Minister of Nigeria, the CEO of Ethiopian Airlines and other business leaders (notably from lead sponsors McKinsey & Company and the Boston Consulting Group) and educators. The event was attended by hundreds of participants including Wharton faculty, students and alumni, African investors and entrepreneurs, members of the African diaspora and many others who have an interest in Africa.

These are our notes from the event. They are not intended to be comprehensive.

First, there was a tremendous amount of energy and optimism surrounding Africa developments. There were a palpable sense that Africa’s moment is coming and an urgency that it should not be squandered. These sentiments are validated by our analysis of African demographics that show a coming decline in the dependency ratio and an accompanying increase in the odds of realizing some demographic dividend. However, fertility rates remain too elevated and are not falling fast enough to deliver the massive dividend that was seen in China, the US and Europe in recent decades. Read more

Africa: 800 Million Jobs Needed

African economies are in a race to get ahead of the demographic boom.

“Let us share without fear the journey of migrants and refugees.” Pope Francis (@Pontifex) tweet on 27 September 2017.

While some people in the United States are sweating the presence, against the backdrop of a demographically stagnant white population, of the 11 million undocumented immigrants or of the 30+ million other foreign-born residents, there are far bigger numbers brewing in other parts of the world, numbers that are so large that they could affect, decades from now, the life of an American citizen far more than would the rare determined Mexican or Guatemalan who manages henceforth to scale President Trump’s purportedly impenetrable border wall.

In the next decades as was so often the case in history, the future shape of the world could once again be decided in Europe and by Europe’s and the West’s handling of Africa’s incipient demographic boom.

In fact, if you are a generous-minded European who shares the Pope’s noble sentiment and who views the ongoing wave of migrants coming into your country as a benign and positive development; or, if you believe that borders are outdated constructs and that all refugees and other immigrants should be welcomed into the rich world; indeed, if it is your view that anyone who stands in the way of this openness is misguided by racist and nefarious motives, then it behooves you to test the strength of your belief by examining the larger demographic data coming out of Africa and Asia. Read more

A Different Kind of Border Wall

To slow mass migration, stop the illicit capital flight from poor to rich countries.

An asset manager called ____ Capital recently sent out this email seeking referrals:

The US Investor visa program allows one to invest $500,000 U.S. in a government licensed fund for a period of about five years and in around 18 months, a conditional green card is attained for the investor and their immediate family. The investor and their family can live, work and study anywhere in the United States and there are no educational, age or English language requirements.

Most experts report that on September 30th the investment amount will increase from $500k to $1.3m, a significant jump that will price out many potential investors.

There is still time to file before September 30th if you start your process with ____ Capital now.

Others can comment on the practice of selling green cards (and ultimately US citizenships) to wealthy foreigners while millions of other applicants, some of whom would be greater contributors to the United States, continue to wait in line for years. Our concern is one step removed and has to do with the legality of this money. Read more

New Infrastructure in Sub-Saharan Africa

This post will be continuously updated as we learn about new projects. Go to the bottom of the page for new entries.

On the three main vectors of wealth creation, African countries have lagged other developing nations for several decades. Sub-Saharan Africa is the poorest region of the world and suffers from poor infrastructure, uneven literacy, endemic corruption, political instability and war. While this is problematic for the present, improving conditions are pointing to a more promising future.

Al_Gesh_Road,_Sahara_-_panoramio
Al Gesh Road, Sahara. (Photo by KaiAbuSir via Wikimedia Commons)

In particular, sub-Saharan Africa could have a unique opportunity to realize a demographic dividend if its elevated fertility rate and dependency ratio decline in the same way as have those of other countries in the past.

The experience of China shows that a significant dividend can be reaped if other conducive factors are also present. Most important among them are a growing workforce that is more literate and productive, and an institutional framework that is supportive of economic development. Read more

Father of the Bernie Sanders Presidency

President Trump’s elite-managed populism opens a path for a more genuine version.

On the usual political spectrum, there are left and right, people who call themselves progressive or conservative, socialist/social democrat or capitalist. But these labels seem to mean less today than in the past. The Trump phenomenon highlighted another divide that has little to do with the historic left and right. Crudely speaking, we can call it coastal vs. non-coastal, urban vs. rural, ethnically diverse vs. more homogeneous, elitist vs. populist. This at least is the way the dominant media sees it.

(click chart to enlarge)

Screen Shot 2017-04-18 at 10.26.26 AM

At the same time, the old labels are not completely dead. So if we try to overlay the new on the old and to categorize the Trump following, we could say that some of the old guard conservatives joined forces with the new rural populists. This is a little complicated and barely makes sense given that the former include some of the elites, in other words the very same people who have angered the populists for the past decade. Many people who want lower taxes and free trade and globalization voted for the same person, Donald Trump, as did people who want import tariffs and restrictions on the flows of people, capital and goods. Some of the same people who survived in 2008 thanks to Wall Street bailouts voted for the same candidate as did people who are still seething over the bailouts. Read more

The Economics of Dependency

This article first appeared at Foreign Affairs.

How countries hit the demographic sweet spot.

Demographics are among the most important influences on a country’s overall economic performance, but compared with other contributors, such as the quality of governance or institutions, their impact is underappreciated. Demographic factors, such as the age structure of a population, can determine whether a given economy will grow or stagnate to an even greater extent than can more obvious causes such as government policy.

One of the most consequential aspects of demographics as they relate to the economy is a phenomenon known as the “demographic dividend,” which refers to the boost to economic growth that occurs when a decline in total fertility, and subsequent entry of women into the work force, increases the number of workers (and thus decreases the number of dependents) relative to the total population. The demographic dividend has contributed to some of the greatest success stories of the twentieth century, and countries’ ability to understand and capture this dividend will continue to shape their economic prospects well into the future. Continue reading at Foreign Affairs >>>

Trump Country: Where the Immigrants Aren’t

Trump did best in the states with the lowest percentages of foreign-born residents.

“I love the poorly-educated”, gushed Donald Trump after winning the Nevada primary in February. But in the end, what happened in the primary, stayed in the primary. Come November, Trump lost the state to Hillary Clinton, a turn that is explained by the fact that there is a higher percentage of foreign-born residents in Nevada than in any state won by Trump, save Florida.

In fact, Trump won the general election because he carried almost all of the states where there are few foreign-born residents. His anti-immigration message resonated most in the parts of the country that have the fewest immigrants. Of course, he also won immigrant-heavy Arizona, Florida and Texas, but mainly by prevailing in rural counties. He lost in the counties that include the major urban centers of Miami, Orlando, Tampa, Dallas, Houston, Austin and San Antonio. He did win in Maricopa county where Phoenix is located but perhaps not in Phoenix itself. (Maricopa county encompasses a lot more than Phoenix as it is larger by itself than the entire state of New Jersey, and larger than Connecticut and Delaware put together.) Read more

Should Children Vote?

The rising cost of entitlements will test inter-generational harmony.img_6331

In the week following the Brexit vote, a recurrent complaint from the losing side was that a majority of older people voted to leave while a majority of younger people voted to remain. In the eyes of the complainers, this rendered the leave outcome less legitimate because younger people have more years of life ahead of them and therefore would allegedly suffer more than old people from a decision to leave the European Union. So much for the wisdom of old age knowing what is best. And so much for the principle of one person one vote, regardless of age, gender or race or whatever.

Instead of disenfranchising a group of older voters, we may consider allowing children some representation in our voting system. In the United States, the voting age is 18 which means that there are approximately 74 million US citizens aged under 18 who do not have the right to vote. That is a sizable 23% of the entire population who will all be adults by 2034 and who may not in the future take kindly to the long-duration budget commitments that were made in their absence. Read more