Saturday, July 1, 2017

Population growth responds to economic conditions

It is often argued that the economy's performance depends upon population growth. No doubt, but economic forces typically work in both directions and, if that is true, then it is also true that population growth depends upon the economy's performance.

Googling us population historical data excel turns up World Population Data (3) as the first result. Their population.xls file contains a worksheet named US Population Data - Filled in which will serve my purpose. The initial notes say

Before 1960, 10 year census data was filled in assuming constant annual growth during that decade. From 1960, Current Population Survey estimates are used.

So the data for the time of the Great Depression time is not perfect, but I probably won't find anything better. They provide this graph:

Graph #1: From the Population.XLS file
You can easily see a slowdown of population growth from 1930 to 1940. That's gotta be a result of the Great Depression. Malthusian. Here is a plot of the growth rate:

Graph #2: Population Growth Rates, based on the data from Graph #1
You can see the low of the 1930s, a low which supports the view that population growth responds to economic conditions. And you can see the high of the 1950s, likely in part a result of the improved economic conditions of that time.

Diane J. Macunovich writes:

Many factors can influence a couple’s decision to have a child, but a large body of work suggests that economic factors—especially women’s wages and young adults’ relative income—have played a major role in U.S. fertility trends. “Relative income” refers to a person’s earning potential relative to his or her desired standard of living.

If your "desired standard of living" is high, you might be inclined to put off having children and instead devote more time to your career. That would tend to push the economic trend and the population trend in opposite directions. No doubt it's a factor.

I think more in terms of our expected standard of living -- low during the Great Depression, high after a victorious end of WWII. These would tend to push the economic trend and the population trend in the same direction.

Both tendencies exist, no doubt. But it seems to me that major events (like the Great Depression and the end of World War Two) would give a general push in one direction or another. People do always have their own goals and their own desires, but for a large number of people these would tend to average out. So the general trend of population growth in an economy like ours must be subject to the push of major economic events.


The Arthurian said...

Adam Smith: "The most decisive mark of the prosperity of any country is the increase of the number of its inhabitants."

The Arthurian said...

Dietrich Vollrath: "a key feature of a Malthusian economy was that living standards are inversely related to population size."

The Arthurian said...

Mark Mather: "In the United States and other developed countries, fertility tends to drop during periods of economic decline. U.S. fertility rates fell to low levels during the Great Depression (1930s), around the time of the 1970s "oil shock," and since the onset of the recent recession in 2007..."

The Arthurian said...

Related, from There’s a clear link between America’s opioid crisis and unemployment at Business Insider: "'We obtain strong evidence that opioid-related deaths and ED [emergency department] visits increase during times of economic weakness,' according to the paper, published by the National Bureau of Economic Research."

The Arthurian said...

Robert J Gordon: "... the growth of college student debt to more than $1 trillion leads to a prediction of delays in marriage and child birth, and a decline in the rate of population growth ..."

The Arthurian said...

The record-low birthrate offers yet another sign that millennials are economically screwed at VOX:
"Following a significant drop in the birthrate after the 2008 recession, women are continuing to have fewer children. Why hasn’t the rate recovered?
One reason for the continuing low fertility rates, then, is that the economy hasn’t recovered.

The Arthurian said...

Birth Rates Dropped Most in Counties Where Home Values Grew Most by Jeff Tucker on Jun. 6, 2018:
"The economic recovery produced a sharp rise in home prices from 2010 to 2016, and a simultaneous drop in the birth rate. The trends might be related (which is not to say causal), especially for women in their late 20s: Birth rates fell the most in counties where home values grew the most, and birth rates fell less and sometimes even increased in counties with smaller home price increases.
The U.S. baby bust started at the onset of the Great Recession in 2008, when the total fertility rate began falling. It dropped from a high of 2.12 per woman in 2007 to 1.93 by 2010.
Most observers expected that fertility would rebound as the economy recovered, but instead the fertility rate has continued falling. In 2016, the most recent year with detailed birth records, the total fertility rate was down to 1.82, and preliminary data show it dropped to 1.76 in 2017.
A fertility rate of 2.1 births per woman is called the “replacement rate,” because it would maintain the population at a steady level without migration. The long-term effect of total fertility below 2.1 is for the population to steadily decrease.