I’ve never understood why a declining population is in itself a bad thing (for individuals).
Everywhere there seems to be labor shortages it’s almost always the low-end jobs that can’t fill vacancies (that’s a good thing for living standards). Plus benefits like less inheritance splitting, greater capital per person (roads, houses, etc.). And at the far extreme, developing countries often have high growth rates and widespread poverty as a result. On the flip side, if I’m an only child and inherit my parent’s house, that is a huge increase to my living standards to never have to carry a mortgage.
The argument usually seems to be that old people consume resources without working, but isn’t that true of both children and the elderly? The elderly need a lot of hospitals, doctors, nurses, etc., but kids need teachers, doctors, school bus drivers, universities, daycares, etc. Both groups might pull family members out of the workforce for years to care for them. But the elderly often have their own assets to draw from to pay for some/all of this, whereas kids come into the world with nothing.
What am I missing?
In: Economics
You seem to have the basics but perhaps haven’t though through the scale and secondary impacts properly.
Yes, both children and old people are “non-productive” in that they can’t work, but children take 18-25 years to enter the workforce and they live in the same home as their parents during that time. Retired people can go as long as 40 years while also needing a separate place to live.
Lets take your house inheritance as an example:
Yes, you will eventually inherit from your parents but by the time you do, it’s usually quite late in life – Does inheriting their house when you are 50 or older really make up for not having one before that? And if the population declines rapidly, that house might not be worth much as everyone already has one and there are spares sitting around unused. This alone will have a massive impact on society as a lot of people have the vast majority of their net worth tied up in their house and their retirement plan often depends on being able to sell it and downsize. This only works if there is someone else who wants the old house and will pay for it – now imagine if there are more houses than people who want to buy…
If the transition is slow enough, we can transition from building more homes to maintaining the ones we have and getting used to the idea that land for housing is no-longer something that increases in value in a significant way but this is a huge change.
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