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An early though superficial view at the onset of the covid pandemic two years ago might have suggested that couples locked in around the world would cause a global baby boom. In actuality, the story has been quite mixed, with a baby bust visible in many parts of the world and a pregnancy boom in others.

In the US, parts of Western Europe and China, data suggests a pattern of births that has not only kept these countries on the path of their long-declining birth rates, but on a trend that has accelerated in a significant way. This trend appears to have been bucked in Nordic countries and in the Netherlands. In emerging markets like India and the Philippines, there has been a pregnancy boom, but whether that has resulted in a baby boom or not has partly been a function of the availability of cheap and safe abortions.

The first rigorous economics-based work on fertility was done by Nobel Laureate Gary Becker in 1960. The most important phenomenon that needed explanation at that time was the large and persistent decline in fertility rates over the course of an economic and demographic transformation that had begun after the Industrial Revolution.

Since that time, as economies around the world have become more prosperous, their fertility rates have declined. This negative income-fertility relationship has resulted in fertility rates in the developed world falling from above 5 in 1850 to 2 or less today. Among newly prosperous countries, South Korea’s births per 1,000 people has declined from well over 10 to under 5 today, which is even lower than that of Japan or Singapore. On this metric, the US is at about 11, and India’s rate has declined from about 45 births per 1,000 people at Independence in 1947 to approximately 17 now.

Becker proposed a “quantity-quality" trade-off in having children, where parents would “invest" in their children, primarily through education, and this investment would pay off with higher incomes and standard of living for the next generation. Another explanation for the declining fertility rates is the opportunity cost for women. Over the last century, as more females became employed and their wages caught up with males, this phenomenon came into play. While these effects are still playing out in developing countries like India, we are in the early stages of what appears to be a secular reversal—or if not a reversal, at least a flattening out of fertility rates among rich countries. Surprisingly, some higher income-per- capita countries like the US and Norway today have higher fertility rates than less prosperous countries like Spain. An excellent new working paper (#29948) from the National Bureau of Economic Research (NBER) that brings us up to date on academic arguments has posited an evolving preference-based model to fertility.

Enter the pandemic: Two contrasting effects have been at play. On one hand, leisure, proximity and diminished availability of contraception methods would naturally result in more babies. On the other, the uncertainty caused by the pandemic, both emotional and economic, would result in couples electing to postpone conception. A distorting factor has been the legality, access and safety of abortions. Broadly speaking, the world has sorted itself out during the pandemic into those with a baby bust (attributable to the uncertainty factor), with a baby boom (led by proximity and a mitigation of uncertainty), or those with a pregnancy boom where actual births have been limited by abortion. One explanation offered for the boom in Norway, for instance, is confidence in the protection offered by the welfare state. The data is still preliminary, and some effects may be transient, while others more enduring.

India’s demographic transformation continues apace. Since the country’s 2011 census, births per 1,000 have declined from about 22 to 17. Approximately 24 million children were born in 2020 (India is adding one Australia per year), a figure that is still growing each year but at a declining rate. India’s total fertility rate (TFR) has been dropping gradually and is now 2.16, possibly lower. According to the 2019 Sample Registration System, 13 states and 2 Union Territories are now at a replacement fertility rate or lower. On this trend, India’s population will likely peak at around the time of ‘India@100’ years of Independence and will then decline meaningfully towards the end of this century.

India’s gradually maturing demographic profile presents challenges and opportunities. The solid support that our working-age population in their thirties and forties (“thorties") offers the rest of society is still bankable for another 20 years or so.

At first glance, the pandemic shock has not dramatically impacted our demographic profile. More data in coming years will complete this picture. In the absence of 2021 census data, analysts estimate that India has about 138 million people over the age of 60 (significantly impacted by covid fatalities), and that is expected to rise to nearly 200 million by the time of the next census.

So, for a period of decades, India will be both a ‘young’ and an ‘old’ country. This will mean that we must remain focused on the issues of youth, education and employment, and at the same time of the elderly, namely healthcare, elderly care and pensions. This bar-belling of requirements will require skilful political navigation.

P.S. “Luck is what happens when preparation meets opportunity," said the Roman philosopher Seneca.

Narayan Ramachandran is chairman, InKlude Labs. Read Narayan’s Mint columns at www.livemint.com/avisiblehand

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