Boost that birthrate

KIRAN KARNIK

A previous article (‘Demographic Dangers’, Civil Society, June 2024) discussed some implications of the latest fertility figures for India and the demographic projections that result. For the next two decades, with fewer births than earlier expected, the dependency ratio (the proportion of non-working age compared to working age population) will be lower, potentially amplifying the demographic dividend.

After that, though, the trend will begin to reverse — and alarmingly fast — as fewer births mean, in due course, a lower working age population. As the present bulge in working age population ages, the rapid growth in elder population will be bigger than the decrease in births. This will be compounded by increased longevity, resulting in more elders and, ultimately, a greater dependency ratio.

Developed countries in Europe and Japan are already confronting this problem and are faced with burgeoning pension and healthcare expenditures. South Korea is similarly placed, and now China too is on the verge. Many of them crossed the demographic transition years ago and are now experiencing a depopulation (Japan’s population decreased by 850,000 in 2023).

The UK and US are tackling labour shortages by facilitating immigration of foreign workers. In many other countries, there is hesitation regarding the social, political, and even security aspects of large-scale immigration. Therefore, countries like China, South Korea, Japan, and Singapore are seeking an organic-growth solution by providing incentives for childbirth. So far, this solution is not working as people don’t want to have more children.

Various hypotheses have been advanced for this: cost of childrearing and education, the time and attention that children require, down-time due to pregnancy and immediate post-natal care, working couples, and inadequate space in the home. However, none of these bears scrutiny against facts. Japan, South Korea, countries in Europe, and Singapore are all prosperous places, with enough social security nets to negate these arguments. In addition, there are now cash and other incentives to encourage childbirth.

Some argue that rapid declines in fertility reflect a lack of hope about the future. Climate change, wars, and social strife make people fearful about what may happen in the years ahead, and they don’t want to bring children into such a world. In India, even the jam tomorrow (Viksit Bharat) being promised by leaders is not resulting in a higher TFR (total fertility rate). Also, it is the happier countries, according to rankings (especially European ones), which have lower birthrates, not poor countries riven by wars and unrest.

Developed countries confronted low fertility, greying demography, and an adverse dependency ratio, only after they reached a level of prosperity. Growing rich before growing old has been the paradigm thus far. Within the Global South, China is the first to grow old at an earlier stage in its economic growth. Yet, even this is at a per capita income of $10,000 plus.

India will reach this level of income only after some two decades, which is about the time that the country’s population will begin to decline. The dependency ratio, now low and decreasing, will reverse and begin to worsen well before that, with elders (60-plus) increasing from the present 10 percent of the population to 20 percent by 2050. Of major concern is that this could mean a lowering in the economy’s growth rate, and we will grow old before growing rich. This scenario has serious implications, especially in relation to India’s ambitions and the economic well-being of its people.

What are the possible solutions? One is to change the emphasis. Shift the focus from population control to women’s education, agency and empowerment, and population quality: better infrastructure to ensure maternal and child wellness, nutrition, and healthcare. Another answer is to promote greater fertility through cash and other incentives: free, extensive, and high-quality childcare facilities, freeing parents from otherwise necessary duties; free creches, Anganwadis, education, nutritious meals, and healthcare.

An outside-the-box solution is to ban all birth control medications and products, as also abortions. Another equally undesirable solution is boosting birthrates by cutting all social security measures for elders, on the assumption that traditionally children were birthed to provide old-age care and security to parents (hence also the son preference). The money saved could be used to provide incentives for more births.

Exhortations — a la President Putin, who declared it the patriotic duty of women to have more children — and propaganda (to increase the social cost of being childless) are neither desirable nor effective in our situation.

A different solution would be to change the dependency ratio: redefine “working age” by raising the upper age (to, say, 70). This would not only increase the denominator but would simultaneously lower the numerator (number of non-working dependants), thereby substantially reducing the dependency ratio through a double advantage. Already, France has increased its retirement age from 62 to 64; in Belgium it is 67.

However, if the redefinition of “working age” is to be genuinely beneficial, elders must have jobs that are productive — necessitating reskilling and excellent healthcare (to keep them fit and active up to 70 and beyond). One interesting possibility is childcare: ensuring productive work as also inter-generational transfer of culture and values. Simultaneously, the prospect of being freed from some childcare tasks may encourage couples to have more children.

Two other possible solutions: increase inward migration, and use technology to automate. Given our history of open doors, the first should be easy. However, the recently-created xenophobia will have to be reversed. The second, involving robotics, Artificial Intelligence, and much else, will happen in any case. This will, though, require a huge push if it is to compensate for the shortage of workers. Many developed countries — and China, too — are trying this route.

It is time to shift gears, to worry about the problems of a lower, older, and decreasing population, rather than a growing one. Studies are required on an optimum population size and its age profile, both dynamic over time. Population growth and de-growth happen with unexpected speed:  we need to act now to influence outcomes in the coming decades.

Kiran Karnik is a public policy analyst and author. His most recent book is ‘Decisive Decade: India 2030, Gazelle or Hippo’