Does the Population Bust=Economic Problems?
The National Center for Policy Analysis published a short summary of the arguments that the coming end to population growth is going to harm economic growth. According the Center,
Such prospects [a smaller, aging population] have many demographers and world leaders concerned. Not only might there come a time when there would be too few workers to support retirees, but there would also be too few workers to support economic growth.
The article offers two possible solutions: encouraging people to stay in the work force longer before retiring, and using immigration to keep the work force growing. Even if the concerns about economic growth are accurate, however, these would be stop gap measures at best.
A better focus would be to ensure that legal structures are in place to allow aging, shrinking societies to organically adapt to these gradual changes.
This is, after all, what largely determined success or failure during the 20th century’s enormous population boom. Countries that had legal structures in place to allow people to adapt to the changes thrived, while countries that did not stagnated or worse.
For example, the Center cites concerns about the viability of the U.S. Social Security Administration. The SSA is a rigid scheme that is largely predicated on population growth. It will not be able to survive the coming change in population trends without major modifications.
But economic growth itself does not depend on population growth. In fact, the most successful economies today grow much faster than their population. There is no reason such growth can’t continue, again provide legal structures are not so overly rigid that they prevent institutions and individuals from adapting.
Source:
Population growth rate slowing. The National Center for Policy Analysis, August 28, 2001.
The Does the Population Bust=Economic Problems? by Brian Carnell, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 License.
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August 18th, 2009 at 6:18 am
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