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.

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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.
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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

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 >>>

The Futility of Annual Top 10 Predictions

In every recent year, a black swan event has made top 10 lists appear quaintly naive and unimaginative. Our list is probably no better.

This time of year, top 10 predictions are all the rage. These lists can be interesting and entertaining but how useful are they really?

This question goes to the heart of forecasting. How futile or how useful is an attempt to forecast the economy, or technology, or world events for the next twelve months? There are three answers. Read more

India’s Disruptive Gamble

by Ravi Srinivasan

(Ravi discussed this post at the BreakingBank$ podcast. His segment starts at 20:10.)

Modi’s demonetization was the other November 8th global earthquake.

A thorough historical record will show that not one but two man-made events shook the world on 8 November 2016. One was of course the election of Donald Trump to the US Presidency against the predictions of nearly all polls and pundits. The other was the Indian government’s shock and awe decision to withdraw from circulation all ₹500 ($7.3) and ₹1,000 ($14.6) rupee bank notes, equivalent to 85% of the country’s paper money. Although the first event dominated the headlines, the second will have a greater impact on over a billion people in India and elsewhere.

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500 rupee banknote, an endangered species since 8 November 2016.

This process known as demonetization is the latest in a series of initiatives by the Modi government to modernize Indian society and to increase financial inclusion and digitalization. Along the same lines in the past two years, other government efforts have included the ambitious and unprecedented Aadhaar national identification system started in 2012, the Aadhaar-based remittance system offered by the National Payments Corporation of India in 2013, and the Jan Dhan Yojana drive to bring financial services to lower-income segments of society. Some private players such as Paytm, Citrus Pay, Mobikwik and Freecharge have also moved in lockstep with public initiatives. Read more

The Relationship Between Fertility and National Income

We all heard that “demography is destiny”. But how many of us truly believe it? If demography was destiny, the world would look very different today. The two demographic giants China and India would be uncontested economic and military powers. The United States would be a regional power struggling to keep up. Larger European nations such as Britain, France and Germany would barely register on the economic map, while smaller ones such as Switzerland and Finland would be invisible. Nigeria and DR Congo would be African powerhouses. Brazil, Indonesia and the Philippines would be the shining stars of their continents. Read more

Rise of the Rest: A Vision Deferred

Changing demographics and the commodities crash have slowed down the development of poorer countries.

Perhaps it all started with a turn in China’s demographics. Demand growth for commodities has declined sharply from recent years and has resulted in a crash of global prices. Copper is down 54% from its post 2008 peak and down 25% this year alone. Crude oil is down 67% and 39% in the same time spans. In addition to softer demand, prices were negatively impacted by jumps in supply, most notably from shale energy producers in the United States. Read more

How Many People Will Live in Africa in 2050 and 2100?

Large declines in fertility will depend on raising female literacy above 80%.

Every few years, the United Nations Population Division releases demographic projections for the entire world and for every country, region and continent. Although the UN’s database is the most used source on demographics, the data is not equally reliable for all countries.

Countries in the developed world conduct regular censuses and produce detailed numbers that are considered reliable. Less developed countries conduct censuses on an irregular basis or are completely unable to conduct them and have instead to rely on demographic sampling. In the poorest countries of the world, most of which are in sub-Saharan Africa, censuses are infrequent or nonexistent and even sampling can be irregular and unreliable. Read more