R. F. Harrod on Reviving the Birth Rate

Continuing below‐replacement fertility and projected declines in population size are demographic features of many European countries and Japan. They are variously met with complacent acceptance, calls for higher rates of immigration, or—often last and least—proposals for increasing the birth rate. Fertility was also low in the 1930s, and some of the policy debate from that period resonates today. In England and Wales, fertility then had been declining for half a century. Over the decade 1931–40, it averaged 1.8 children per woman—moreover, with net emigration. Worries over this situation and its likely consequences led to the setting up in 1944 of a Royal Commission on Population, charged with considering “what measures, if any, should be taken in the national interest to influence the future trend in population.” In a memorandum submitted to the Commission in that year, the economist R. F. Harrod set out a detailed proposal to encourage childbearing through a scheme of family endowments. Part of the introductory section of Harrod's submission, arguing the case for state intervention and for material rather than ‘spiritual’ measures, is reproduced below. An evident problem in offering economic incentives for childbearing is that, to induce a given behavioral change, well‐off families would require much larger incentives than the poor. Hence child endowments that aspire to effectiveness across the income distribution have to be skewed toward the upper end. Harrod argues that this is as it should be, that policy should establish neutrality between large and small family sizes, and that this is a conceptually separate issue from poverty alleviation. ‘We should seek a re‐distribution of national income favourable to the parents of larger families and the plan should be put into effect whether or not another re‐distribution as between rich and poor is proceeding at the same time.’ He remarks on the implausibility of the government's being able to ‘talk up’ fertility— thereby generating some kind of costless ideational change, a ‘spiritual aufklärung.’ Later pans of the submission not reprinted here cover the specific details of the proposal. The proposed annual benefit per child (intended for every child after the second, with half‐rates payable for the second child) is paid for 18 years. It is substantial and increases with the child's age—at ages 13–18, for most of the income range it amounts to 20–30 percent of the father's income (or mother's, if hers is higher). Harrod also discusses further the rationale for making the endowments (and the compulsory contributions—a flat 5 percent of income—that finance them) proportional to income. To make his case Harrod draws on the dysgenic and population‐quality arguments popular at the time: worry about ‘race decline’ and ‘a general lowering of standards and of efficiency if the parents who are best equipped in experience, knowledge and culture are relatively infertile.’ In the event, the Commission recommended a flat schedule of family allowances, together with tax exemptions for dependent children calculated to provide some income‐based benefit. These were justified on population as well as equity and welfare grounds, ‘since the handicaps of parenthood have played a large part in the fall of average family size below replacement level.‘ Population quality issues—the subject of several other submissions—were sidestepped by calling for further research. By the time the Commission's report was finally published, in 1949, the baby boom was well underway: average fertility over 1946–50 was 2.4. Roy Forbes Harrod (1900–78) was one of the foremost economists of his day. His career was largely spent at Christ Church College, Oxford. A student and sometime colleague of Keynes, his best‐known early work was centered on identifying a dynamic equilibrium growth path for the economy—building on Keynes's static equilibrium analysis. As stylized (by others), this came to be called the Harrod‐Domar growth model, a formulation basic to growth theory. Harrod was editor of the Economic Journal for the period 1945–66. He was active in politics and as an economic adviser to both Labour and Conservative governments. He was knighted in 1959. The extract is reprinted from volume 5 of the Papers of the Royal Commission on Population (London: His Majesty's Stationery Office, 1950), pp. 80–85.     

Edward Alsworth Ross on Western Civilization and the Birth Rate

A declining trend in fertility had taken hold in Western Europe, North America, and Australia in the late nineteenth and early twentieth century, attracting much social scientific interest and public policy concern. Explanations advanced at the time—for example, in the writings of John S. Billings, Lujo Brentano, Arsène Dumont, Adolphe Landry, and F.W. Taussig—mostly posited multiple causes and in many respects anticipated the arguments subsequently made by the theorists of “demographic transition” in the 1940s and 1950s. A prominent figure who should be added to the names just mentioned is the American sociologist Edward Alsworth Ross (1866–1951). Ross's account of fertility decline is best captured in his article, “Western civilization and the birth‐rate,” American Journal of Sociology, volume 12, no. 5 (March 1907), pp. 607–632, which is excerpted below. Writing in a vigorous and fluid style, he gives weight to the lessening of class divisions offered by democracy, the “newly awakened wants” that crowd out children, the emancipation of women, the decay of religious authority, and the numerous elements of modern life that “enthrone reason over impulse” and hence make for enlightened foresight. In the parts of the article not reprinted, Ross discusses the then widespread worries about the implications of differential fertility—the possible dysgenic effects within nations and the prospective demographic marginalization of the West as a whole (requiring “the bristling frontiers between peoples and races” to remain in place until the economic gaps are narrowed). In an acute and prescient comment on Ross's article, published in the same issue of AJS, the demographer Walter F. Willcox (1861–1964) remarked on the prospect of the fertility decline going too far, with individual interests diverging from the interests of society:

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During the past quarter century fertility has dropped below replacement levels in many parts of the world. According to United Nations estimates, in 2005 this was the case in 65 countries, comprising 43 percent of the world's population. In many cases, most notably in Europe and East Asia, the shortfall of fertility from the level that would be necessary in the long run to sustain a stationary population is substantial. In Europe, for example, the average total fertility rate for the period 2000–2005 was 1.4. Indefinite maintenance of such a level implies a shrinkage of the total population by one‐third over a generation–roughly every 30 years. Accompanying that rapid decline of total numbers would be an age structure containing a preponderance of the elderly, posing extreme adjustment difficulties for the economic and social system. Societies that wish to avoid radical depopulation would have to engineer a substantial rise infertility–if not to full replacement level (slightly more than two children per woman), then at least to a level that would moderate the tempo of population decline and make population aging easier to cope with. An additional counter to declining numbers, if not significantly to population aging, could come from net immigration. This is the demographic future assumed in the UN medium‐variant projections for countries and regions currently of very low fertility. Thus, for example, in Europe over the period up to 2050 fertility is assumed to rise to 1.85 and net immigration to amount to some 32 million persons. The UN projections also anticipate further improvement in average life expectancy–from its current level of 74 years to 81 years. This factor slows the decline in population size but accelerates population aging. 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The Western world faces the opposite problem: population decline, a trend only temporarily masked by the effects of an age distribution that still has a relatively high proportion of women in the child‐bearing ages, reflecting the higher fertility level of the past. A stationary population, Glass cogently argues, is to be welcomed, and he considers the absolute size at which zero growth would be achieved relatively unimportant. In contrast, a continuous population decline would have “thoroughly disastrous” results in an individualist civilization and in “an unplanned economic system.” And, he concedes, somewhat quaintly, that sustained below‐replacement fertility would pose a great problem “even in a country in which the means of production were owned communally.” Glass's conclusions about the reversibility of low fertility are as pessimistic as those of most informed observers today. 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