19 September 2007

Hiring baby ranchers

From Washington Profile, an interview with Nicholas Eberstadt on the demographic problems facing Russia. Read the whole interview to understand the Russian experience in a wider context.

Eberstadt is a political economy specialist at the American Enterprise Institute. It's a pretty stark appraisal from a purely economic perspective, but the ideas are worth considering.

But in light of the Progressive Conservative's procreation policy, take a look at this [emphasis added]:
Washington Profile: Russia is not the only country to attempt to increase birth rates through government policy and incentives. How effective have these kinds of policies been in other countries, for example, in western Europe?

Eberstadt: Birth incentive plans are almost always ineffective in the long run. The typical history of birth incentive plans in western Europe and elsewhere has been to elicit a small blip in birth rates followed by a bigger slump. The reason for the blip is that some parents “on the fence” about the timing of a second or a third child take advantage of the introduction of these incentives. And the subsequent slump takes place because the bonuses alter parents' timing of desired births, not desired birth totals. If one were to have a serious pronatalist economic plan, you’d be getting into some very big money. You would have to have vastly larger outlays than are currently accorded to social security, healthcare or any other existing programs. Basically, you’d have to be prepared to be hiring women to work as baby ranchers—and in a modern economy, given the opportunity cost of women’s labor, a program like that would be staggeringly expensive. That, I think, explains the limited success of pronatalist efforts in the western historical record. By the way, it also turns out to be very difficult to talk up the birth rate: the bully pulpit and the government usually can’t convince people to have extra children out of patriotism or civic duty.

Washington Profile: Russia has become a country with significant immigration flows. How is this likely to impact on its demographic situation?

Russia has the same problem that other European countries have, with the prospect of population decline, and the question of changing ethnic composition. Many of the prospective migrants to Russia are not of Russian ethnicity, and as you know, the government has increasingly indicated a nationalist, or a nativist, objection to immigration to the Russian Federation. There still are a number of millions of Russians in the near abroad, but the flow of Russian ethnic migration to the Russian Federation has declined almost to a trickle over the past decade. Barring some sort of awful political upheaval, I don’t know how realistic it would be to think that these ethnic Russians in the near abroad might want to pack up and head back to the Russian Federation. So Russia is facing the same kind of issues as the rest of Europe. Throughout Europe, the key question in this regard is: can the newcomers be turned into loyal and productive citizens? Some places have a better track record of this than others.
A discussion paper from the Max Plank Institute for the Study of Democratic Policy examines fertility policies in western European countries. Note that the paper discusses a range of policies aimed at supporting people raising children, not merely the performance bonus system for producing children.

While the Progressive Conservative policy announced on Tuesday includes components aimed at supporting parents during child-rearing, it remains to be seen if these measures will be effective. A significant program would involve reform of the federal government's parental leave program to provide larger benefits over a longer period of time versus the current scheme of providing 55% of income for a year. At the time when costs rise, the scheme actually reduces family net income.

There is also a question as to whether or not the longer-term policies are actually the impetus for the proposed program. The Premier's comment on a "dying race" suggest something closer to the sort of reactionary nationalist policies that have emerged in some states, such as Russia. "Race" in this case, is most definitely not synonymous with "province" as some may naively be tempted to argue. The provincial government's throne speech from the past spring, as well as the Progressive Conservative campaign contain clear expressions of nationalist sentiment if not outright ideology.