Tuesday, February 21, 2012

Babysitters cause babies...  

Or at least, higher fertility rates in populations.
Conventional wisdom suggests that in developed countries income and fertility are negatively correlated. We present new evidence that between 2001 and 2009 the cross-sectional relationship between fertility and women's education in the U.S. is U-shaped. At the same time, average hours worked increase monotonically with women's education. This pattern is true for all women and mothers to newborns regardless of marital status. In this paper, we advance the marketization hypothesis for explaining the positive correlation between fertility and female labor supply along the educational gradient. In our model, raising children and home-making require parents' time, which could be substituted by services bought in the market such as baby-sitting and housekeeping. Highly educated women substitute a significant part of their own time for market services to raise children and run their households, which enables them to have more children and work longer hours. Finally, we use our model to shed light on differences between the U.S. and Western Europe in fertility and women's time allocated to labor supply and home production. We argue that higher inequality in the U.S. lowers the cost of baby-sitting and housekeeping services and enables U.S. women to have more children, spend less time on home production and work more than their European counterparts.  [More] [My emphasis]
Whoa - this complicates matters, but the data seem to support this hypothesis.

The implications are considerable.
Peak people will be an age when jobs compete for workers rather than vice versa. The cheapest labour will vanish. We’re already seeing this: Because China is ageing very fast, its dwindling working-age population is turning down the lowest-paid jobs and pushing up the minimum wage sharply, as well as the once-minimal costs of social services: Stuff from China will stop being cheap, because the Chinese aren’t young.
This can have larger consequences than we imagine. For example, the United States appeared to be escaping the worst of the ageing trend because it has an unusually high fertility rate (averaging almost 2.1 children per family, half a child more than Canada and Europe). Most analysts assumed that this was the result of American religion or prosperity. But an important new study by economists Moshe Hazan and Hosny Zoabi has found that the real reason for larger families is the unusually large supply of low-cost babysitters and child-care workers in the US – - mainly due to immigration, much of it “illegal,” from Latin America. But those Central American countries and Mexico are themselves ageing fast, which will soon choke off that cheap labour supply and drive up the cost of having extra kids – which will cause the US to become less fertile and more elderly.
Peak people will also be an age when countries will be competing for immigrants rather than trying to limit them. Immigration has spared Canada from the worst of ageing, but immigrants adopt host-country family sizes very quickly, so they’re a temporary fix. And if their home countries are competing to keep them, then we’ll have a harder time finding young people who want to come. It will require nimble and clever policies to prevent us from becoming old and lonely. [More]
People of a certain age like myself may never be able to get over our "population is a burden" thanks to Malthusian overexposure early in life, as well as our industry's fascination with the always looming "food shortage".

I have considerable confidence we, and our professional counterparts around the globe will find enough ways to grow calories to support all the people comfortably. The diets/crops may change, but we do that all the time.

And we always have ethanol acres in reserve.

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