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Chapter 1: Why are birth rates collapsing globally?
All coming up on the podcast, fertility, babies, sex, why younger generations are not having sex, and if they are having sex, they're not having sex, they're not actually producing babies, and what this means for the world. But the key issue is, why is this the case? We have an unusual culprit in the room.
And also, we're going to be talking to Ibex about what Irish businesses are seeing through the lens of Washington, London and Brussels.
Talk to you in a couple of minutes. To understand the economy you have to understand human nature This podcast is powered by ACAST
How you doing there? It is uncharacteristic of the podcast, which we're going to be talking, John, which is going to be rather, rather uncomfortable. We're going to be talking about sex. Oh, God. I know. Oh, God, I feel uncomfortable already. Oh, Lord, God. Oh, Lord, God. Holy sweet lamb of divine Jesus. Don't be talking about the riding. Don't be talking about the riding. It's very...
It's a pathetic site where you get to a certain age. But the reason we're talking about sex, John, is we're going to talk about fertility. Because apparently to be fertile, you have to have sex. So at least we're going logically backwards. No, what we're going to talk about is the extraordinary and rapid change in fertility, the amount of babies that we are having all around the world.
The implication of this for economics is profound. It's varied. It's largely negative. The implications for sociology is profound, largely negative again and varied, but also much more interesting. It's what it is to be human is what we're talking about, right?
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Chapter 2: What role does human nature play in fertility rates?
What it is to be human, one of the absolute existential urges of humanity is to reproduce, right? Now, whether that is reproducing in wholesale or in a very, very logical... Retail. Retail, exactly, exactly, exactly. Wholesale or retail. So let's go for retail. We're more retail sort of blokes, right?
But the idea is what we've seen in the last few years is a dramatic fall in the amount of babies being born Everywhere. This is the thing. So for most of the last hundred odd years, there has been a gradual slow trend of less and less babies being born in rich countries. Contraception being the major reason for that. Education, wealth, yada, yada, all these sort of things. Even television, John.
Yes, you were saying this beforehand. Well, the most shocking thing is that if you look at American data, the generation that were... We always think that the sexual revolution happened in the 1960s and 1970s. Yeah. And promiscuity and... Raiden was basically a... Drug-fueled... Drug-fueled youth fornication, John. Yeah, yeah, yeah.
Was a sort of a phenomenon of our modern world and our lifetime. But in actual fact, if you look at the data from the United States, the generation that had most sex were in the 1930s and 1940s. And I don't think... We don't like to think about our parents having loads of sex. It's uncomfortable. Our grandparents. But that was actually the case.
So the amount of... When the Americans have these longitudinal studies... Yeah. Which are great, right? And what they're basically saying is they do them over time, they do them consistently. And what they show is that the generation that had most sex were the generation that would have been most conservative politically. Yeah. The people of the 1930s and 1940s.
This is all behind closed doors and twitching curtains. That's the best place to have sex, John.
Yeah.
John is a little bit of a dogger. He goes dogging down to Learie Pier. I didn't realize this until we just had this podcast. I came across you. Until I saw him.
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Chapter 3: How have societal changes affected young people's relationships?
He's got a little small online community of like-minded individuals. And we will give you the details at the end of the podcast. Anyway, we are now going to go. Enough of your dogging. Hang on a second. You're saying about television that kind of took off in the 50s. And really into the 60s and 70s when it became absolutely ubiquitous. So in the 30s and 40s, that was the time when radio took off.
Yeah. So radio was the, could you say that radio was the... The fluffer. The fluffer.
i don't know where this is going ladies and gentlemen the podcast has lost its way but we're going to come back hold on a second we are on the economics of fertility but we are going to talk to a really sensible person we're going to talk to john byrne murdoch of the ft because he's written a fascinating piece on fertility and why fertility is collapsing around the world
why in terms of timing it has collapsed in various different countries at a certain stage and what the long-term implications of that are. So let us go to John Byrne Murdoch and talk about babies. How are you? Great to see you there, John. What's the crack? All good? Wonderful. Yeah.
Thanks for having me as always, David.
Not at all. Not at all. Now, John, Tell me, we want to talk about global fertility. I want to get to your conclusion because I think your conclusion will surprise many, many people who haven't thought about it. And then for people of the generation affected, we'll actually stand to reason.
But it's a kind of what I like about your, you're taking a lot of the economic reasons for a fall in fertility and the ones that we talk about in academia and all that sort of stuff and conferences. And you say, hold on a second, there's something else going on. So explain what is your observation? What are the observation about global fertility? And then let's go through the reasons.
Yes. So the observation is for a long, long, long time, birth rates were falling in most of the world. So we're talking here like the 1800s and a lot of the 1900s. And there's fairly strong consensus on what was happening there. So... You had child mortality getting much lower. So in effect, you didn't need to have as many kids to end up with as many children.
You had this shift from farming to manufacturing and services, which changed the number of kids you needed to sort of support the family business, as it were.
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Chapter 4: What is the impact of smartphones on dating and relationships?
That also came with urbanization, which generally meant fewer kids. And you had increasing female education, all these very slow moving trends. We have good evidence that that was what was explaining the shift from, say, four kids to three kids to two kids per woman. Then, late 20th century and the start of this century, things were fairly stable.
They're pretty stable in high income countries, but they even started to stabilize in middle income countries, places like Latin America. But then suddenly, around 2010, in some places slightly before, some places closer to sort of 2015, you get a new decline.
And here we're going down from about two or sort of 1.8 kids per woman down to the sort of 1.5, 1.4, or even as some of your listeners I'm sure will be aware in places like Korea, down to an average of less than one.
And so explain to me, again, before we go on to the reasons, why is this in economics regarded as a bad thing or a thing we should worry about or something that will have downstream consequences? Explain that to the listeners. Why, for example, lots of people say, well, you know, you have less kids, not a big deal. In fact, maybe there's more to go around, etc. So why is it a bad thing?
Yeah, the more to go around point is a nice one because the evidence is that it's almost the opposite. Now, obviously, in some senses, there's more to go around. If we say that there are a fixed amount of natural resources on the planet, then fewer people competing for those resources, that's reducing pressure.
But in terms of the things to go around that we're mainly concerned about in our daily lives, which is the things produced in an economy, those things are produced by workers. And if you have fewer young people, that means with each generation, you have fewer workers and the people producing the stuff are a smaller and smaller and smaller share of the population.
So Japan is a fascinating example of this, right? So people have looked at Japan for the last 30 years and said, you know, what happened to those guys? They used to be on top of the world. Things are stagnated. The size of their economy, their living standards have not really moved since like the 90s. And... Some people sort of think, oh, did they just become less innovative, less productive?
When you actually look at what the Japanese economy is producing per worker, it's kept going up. It's right up there with America, with the richest countries in the world. It's just that... workers as a share of the population are way lower. So they're still working hard, producing as much as ever, but that is now being shared out. Less is being shared out over a much larger, older population.
So when you don't have enough young people, you don't have enough workers, and it puts downward pressure on everyone's living standards.
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Chapter 5: How do economic factors influence fertility decisions?
coming in from overseas to keep it that way.
And that's not really sustainable culturally or politically. It's just we know that immigration is probably the big issue culturally of our time. So the idea that you're saying to people, well, you know what, over the course of the next 20-odd years, 10% of your population will be people who look different to you, speak different to you, have different culture.
I think that just will not fly in most Western countries.
Yeah, and again, that's not in total, that's every year. You get to the point where the population, yeah.
Then you're into the Tommy Robinson replacement theory there.
Exactly. If numbers got that low and you tried to keep things stable, that essentially is what you'd be talking about. And one other thing just to mention at this point as well is Historically, we thought about low birth rates as being a high income thing. You get them in the West, you get them in rich East Asia countries like Japan.
But now we're seeing steep declines to very low numbers, even in developing countries. So Mexico now has a lower birth rate than America. Tunisia has a lower birth rate than America. Turkey has a lower birth rate than the UK. So that's a big change as well, that these very low numbers are showing up in countries that are not actually rich in the first place.
And the other thing is that what your piece shows is that when you ask people, do they want to have children, younger people, there's a gap emerging between what people say they want to have and what people are actually having.
Yeah, so this is an interesting one because there are lots of different questions that try to get at this and it's hard to know exactly what we're looking at when we look at these numbers. So there's a question which asks people, what is the ideal number of children you would end up having? And generally, again, in most countries, people say on average two.
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Chapter 6: What are the surprising statistics about sexual activity across generations?
Yeah, so I think one thing to say here as well is there are lots of things going on here. There are many overlapping factors and the exact mix in the pan, as it were, will be slightly different in different countries. Now, I came into this expecting that housing would be a big one, right? Especially, you know, I'm here in London, you're there in Ireland.
two of the countries in the world that have had the roughest time for housing for young people. And housing does seem to have an impact, right? So in countries like ours that really elevate the importance of homeownership, you basically think, well, if I'm going to have kids and a family, I need to own my home.
And so what we saw obviously between the 90s and early 2000s and then the 2010s was this big decline in young people in their 20s and even 30s owning homes. And what I did was you can calculate what we call a counterfactual where you say, right, given that we know people who own their homes have more kids than those who rent.
If young people owned their homes at the same rate as they did tail end of the 90s, early 2000s, what would birth rates have looked like? And the answer is they would be higher, but they would still have then declined over the last 10 to 15 years. So you would have been sort of shifting up the level
But people who own their homes today, young people who own their homes today are still having fewer kids than they were in the past. Young people who rent their homes today are still having fewer in the past. So housing is definitely a factor, especially in the English speaking world with our crazy housing markets. But it's not the definitive thing for this recent trend.
And some people always say, like, well, maybe it's got to do with the fact that relative to men, girls are now more educated, they're doing better. Basically, they can choose differently because they have cash in the way that their grannies didn't have, their grandparents didn't have, their grandparents had to, their grandmother had to kind of settle with the bloke down the road, right?
Because they didn't have any autonomy. How much does that factor into things?
Exactly. So that, again, is definitely part of what's going on here, right? That is part of this slow-moving process that's been playing out over decades. You've had the feminist movement, which was in part actually based on concrete... Well, it was pushing for and then championing these real material changes in the world.
So the ratio of young women's to men's earnings has been closing and closing. Many young women now earn more than their male counterparts. So that is, again, a real part of this. Because I think, you know... It feels a bit icky sometimes talking about this, but the relative sort of socioeconomic dynamics of a prospective couple do matter.
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Chapter 7: How does social media shape modern dating dynamics?
And it's, well, you know, sure, this guy seems cool, but... Is he critical? Do I need him? Do I need that? But again, the issue here is that these are very slow moving trends. Plot any of these things on a chart in terms of relative earnings gaps, employment gaps, that kind of thing. And they have been unfolding slowly for a very, very, very long time. So again, almost certainly part of this.
But what we're trying to explain is something that has happened in Mexico, in the US, in Ireland, in Tunisia over the last 20 years.
So let's look at the culprit, okay? Because what you've concluded is, I think, something really, really fascinating.
Yeah. So the beautiful thing about this was, as I was working on this piece, I was really just trying to cast the net wide here. And, you know, I had theories for what we're going to talk about now potentially playing a role. But as I was starting to work on this piece, a new study was published by a couple of researchers who,
at the University of Cincinnati in the US, Nathan Hudson and Hernan Moscoso Boedo. And what they did was they said, we think something that might be going on here is smartphones. And smartphones here, I should say for this whole conversation, it's smartphones in everything they've enabled. So we're not just talking about that piece of metal and plastic and glass. It's
Smartphones mean ever-present digital media, social media, all these things. So what they did, they said, we think this is playing a role here, especially in younger people, so teens and the very youngest adults in their 20s. So they said, right, what do we know about smartphones and mobile connectivity in general is that people didn't get it at the same time everywhere.
So certain parts of the country, that 4G mast went up later than others. And so they looked at this in the US and the UK. And they found that places that got high-speed mobile connectivity first saw their birth rates fall earlier and more steeply. That I think we should pause just for a second as well. That's a really striking thing. Yes. It's remarkable.
And it's a classic study design that people have used to test for causality. Because that's the key thing here, right? Is this just something that's happened at the same time or is there something causing it? You can also do that internationally.
So I then extended some of the work they'd done and said, well, what you notice about this most recent decline in fertility is that in places like UK, US, Ireland, Australia, the turning point comes in around sort of 2007, 2008. Then in places like Indonesia or Mexico, these sort of developing but relatively high income countries, it comes around sort of 2012.
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Chapter 8: What does the future hold for family formation and childbearing?
But if you try and get at this by using statistics on smartphone usage rates or another thing I looked at was when did people start searching Google for mobile apps?
And what you see is that there's a pretty striking amount of overlap between when the use of these technologies seems to take off and when those birth rates, especially among teens and people in their early 20s, ticked over and sort of started falling faster than they were before.
So let's look at this, because this is the fascinating thing. So the suggestion is that there's a serious correlation between the falloff in birth rates and the ubiquity of smartphones. And it's also smartphone adjacent things like all your dating apps and all your, what I would call your options.
And the conclusion is that people are just not socializing in the real world anymore in the same way as they used to do.
Exactly. There seems to be several things. People have proposed several mechanisms here. So one, and I think the easiest to understand, is that straight socializing one.
So all across the world, if you look at questions about how often people meet up with friends, how much time they spend with their friends, even in these detailed time use diary studies that get done, you see a really substantial drop off in the time young people spend hanging out face to face
outside of, say, school or university, starting again exactly around that point of sort of 2010, 2012, depending on where you're looking. And it's a really dramatic decline. So in South Korea, for example, again, the sort of poster child of falling birth rates, the amount of time young people spend hanging out face to face has halved in about 10 years.
So that's the most straightforward mechanism. And one of the demographers I spoke to for this piece, a guy called Lyman Stone, He had this great line that relationships are fundamentally the end of this filtering process. You keep meeting people, you keep hanging out. Some of them you like, some of them you don't. Some of them you like more, you maybe hang out a bit more.
And so if you just start hanging out about half as much, that massively extends the amount of time it will take for you to have hung out with someone enough to know that they could be the one. So that I think is this most straightforward mechanism.
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