Arnold Kling  

World Population Outlook

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Ben Wattenberg analyzes the world population outlook.


In the United Nations' most recent population report, the fertility rate is assumed to be 1.85, not 2.1. This will lead, later in this century, to global population decline.

He points to a number of economic effects of this drop in fertility, including challenges with funding retirement benefits and reduced threat of long-term environmental catastrophe. He suggests that incipient shortages of workers in developed countries will lead to pressure to accept higher levels of immigration.

For Discussion. Will the ability to assimilate immigrants be important in the next fifty years, or will the Internet enable labor substitution to take place without high levels of immigration?


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COMMENTS (4 to date)
Scott writes:

The US economy is now service based, not manufacturing based. The growth is in services, not manufacturing. Although some services can be based offshore, most must be locally delivered. For that, you need a local workforce.

Speaking of the local level, since I live in Phoenix, it is apparent that the US must come to grips with the immigration problem. A couple of thousand illegal aliens come across Arizona’s border with Mexico every day. The vast majority come here to work. It is economically inefficient to drive them into the underground economy.

David Thomson writes:

"A couple of thousand illegal aliens come across Arizona’s border with Mexico every day. The vast majority come here to work. It is economically inefficient to drive them into the underground economy."

We need to educate these people so that they can become productive citizens. Will this encourage more Mexicans and others to break our national laws and sneak across our borders? If so, that's the price we must pay. Encouraging more Immigrants---who are more than willing to assimilate into our national culture---is mandatory if we are to have a viable future. And no, the Internet is not sufficient to "enable labor substitution to take place without high levels of immigration." There are only so many high tech jobs which we can farm out. Scott is right to point out that the rest "must be locally delivered."

I know I'm restating the obvious to a certain extent, but pay as you go retirement systems don't work once the population stops growing.

Also, protectionism can of course have the same effect as restrictions on labor mobility - anti-immigrant forces today might be lobbying to restrict the 'import' of offshore services in the future. Ideally all of these restrictions would disappear, and certainly additional restrictions in either area would have large implications for growth.

Lastly, I'm not sure that I agree with Scott and David that services which are currently 'locally delivered' really necessitate increased immigration. Here in Hong Kong, around 30% of the population employs a Filipino maid for as little as $450/month. Because maids are so cheap, people substitute physical labor for automation - for example, there are very few dishwashing machines here. France, on the other hand, apparently has the highest manufacturing productivity in the world - because labor is so expensive.

Ultimately we (by which I mean the US) will have the greatest growth and the world overall will be best off if we lower the barriers to both immigration and imports as much as possible. But it's all a matter of degree - there are many kinds of substitutes for virtually all types of labor if the price is high enough. It wouldn't be worth it, but that doesn't mean we won't be forced to pay.

David Thomson writes:

Does Hong Kong educate the sons and daughters of the low skill workers? That is the key point to whole discussion. It’s their children who will become the educated elite of tomorrow. The Old Europeans do a lousy job of assimilating their new arrivals. We in America do our best to make sure these folks become full participants in our national vision. Our immigrants, by the second or third generations, are almost totally “melted.” So much so, that many like myself could care less about our ethnic background.

How gung-ho am I concerning immigration? I am appalled by efforts to prevent Muslims from entering our country. While we do indeed have to be cautious not to let in terrorists--we also need the talents of those who merely wish to live in peace. Furthermore, I do not want the young men living in the hell holes of the Middle East to continue wallowing in self pity and childish anti-Americanism. I want to convert them over to our way of life. That won’t likely happen if they remain in the lands of their reactionary ancestors.

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