Econ_May_05_2018

69 / 100

0 to -0.9 -1.0 to -1.9 -2.0 to -2.9 -3.0 to -3.9
-4.0 to -4.9 -5.0 to -5.9 -6.0 to -7.9 Growing
Source: United Nations Population Division *Aged 15-64
Working-age population*, % change, 2015-20 forecast
The Economist May 5th 2018 57
1
MANY developed countries have anti-
immigration political parties, which
terrify the incumbents and sometimes
break into government. Lithuania is un-
usual in having an anti-emigration party.
The small Baltic country, with a popula-
tion of 2.8m (and falling), voted heavily in
2016 for the LithuanianFarmer andGreens’
Union, which pledged to do something to
stem the outward tide. As with some
promises made elsewhere to cut immigra-
tion, not much has happened as a result.
“Lithuanians are gypsies, like the
Dutch,” says Andrius Francas of the Alli-
ance for Recruitment, a jobs agency in Vil-
nius, the capital. Workers began to drift
away almost as soon as Lithuania declared
independence from the Soviet Union in
1990. The exodus picked up in the newcen-
tury, when Lithuanians became eligible to
worknormally in the EU. Formany, Britain
is the promised land. In the Pegasas book-
shop just north oftheNeris river inVilnius,
four shelves are devoted to English-lan-
guage tuition. Noother language—not even
German or Russian—getsmore than one.
Mostly because of emigration, the
number of Lithuanians aged between 15
and 64 fell from 2.5m in 1990 to 2m in 2015.
The country is now being pinched in an-
other way. Because its birth rate crashed in
the early 1990s, few are entering the work-
force. The number of 18-year-olds has
dropped by 33% since 2011. In 2030, if Un-
itedNations projections are correct, Lithua-
nia will have just 1.6m people of working
2020. In1990 therewere just17.
Some countries face gentle downward
slopes; others are on cliff-edges. Both Chi-
na and France are gradually losing work-
ing-age people. But, whereas numbers in
France are expected to fall slowly over the
next few decades, China’s will soon
plunge—a consequence, in part, of its one-
child policy. The number of Chinese 15- to
64-year-olds, which peaked at just over1bn
in 2014, is expected to fall by 19m between
2015 and 2025, by another 68m in the fol-
lowing decade, and by 76m in the one after
that (see chart1on next page).
Jörg Peschner, an economist at the Euro-
pean Commission, says that many coun-
tries face demographic constraints that
they either cannot orwill not see. He hears
much debate about how to divide the eco-
nomic cake—should pensions be made
more or less generous?—and little about
how to prevent the cake from shrinking.
Yet countries are hardlypowerless. Even ig-
noring the mysterious business of raising
existing workers’ productivity, three poli-
cies can greatly alleviate the effects of a
shrinkingworking-age population.
Never done
The first is to encouragemorewomen to do
paid work. University-educated women
of working age outnumber men in all but
three EU countries, as well as America and
(among the young) SouthKorea. Yet female
participation in the labour market lags be-
hindmen’s inall but three countriesworld-
wide. Among rich countries, the gap is es-
pecially wide in Greece, Italy, Japan—and
South Korea, where 59% of working-age
womenwork comparedwith 79% ofmen.
Governments can help by mandating
generous parental leave—with a portion
fenced off for fathers—to ensure that wom-
en do not drop out after the birth of a child.
And state elderly care helps keep women
working in their 50s, when parents often
age—back towhere it was in1950.
Lithuania was an early member of a
growing club. Forty countries now have
shrinking working-age populations, de-
fined as 15- to 64-year-olds, up from nine in
the late 1980s. China, Russia and Spain
joined recently; Thailand and Sri Lanka
soon will. You can now drive from Vilnius
to Lisbon (or eastward to Beijing, border
guards permitting) across only countries
with fallingworking-age populations.
It need not always be disastrous for a
country to lose people in their most pro-
ductive years. But it is a problem. A place
with fewer workers must raise productivi-
ty evenmore to keep growing economical-
ly. It will struggle to sustain spending on
public goods such as defence. The national
debt will be borne on fewer shoulders.
Fewer people will be around to come up
with the sort of brilliant ideas that can en-
rich a nation. Businesses might be loth to
invest. In fast-shrinking Japan, even do-
mestic firms focus on foreignmarkets.
The old will weigh more heavily on
society, too. The balance between people
over 65 and those of working age, known
as the old-age dependency ratio, can tip
even in countries where the working-age
population is growing: just look at Austra-
lia or Britain. But it is likely to deteriorate
faster if the ranks of the employable are
thinning. In Japan, where young people
are few and lives are long, demographers
expect there to be 48 people over the age of
65 for every 100 people of working age in
Demography and its consequences
Small isn’t beautiful
VILNIUS
Theworking-age population is already shrinking inmanycountries, and the
declinewill accelerate. But demography is not quite destiny
International
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