NEWSWIRE: 1/27/20

  • In 2019, the birthrate in China fell to 10.48 births per 1,000 women: the lowest rate since the PRC was founded 70 years ago. The country’s demographic challenges are only getting tougher and are threatening to completely rewrite the social contract between the old and the young. (The New York Times)
    • NH: China's birthrate--the average number of births per 1,000 women--has dropped to an all-time low. By "all time" we mean the lowest since the People's Republic of China began issuing statistics in 1949. It may in fact be the lowest rate going back many centuries.
    • Ditto for the total fertility rate (TFR)--the single-year estimate of the number of children a woman will have over her lifetime. China's TFR continues to slog along at 1.6, conspicuously below the replacement rate of 2.1. Meanwhile, the total number of births continues to fall (to 14.6 million). Since the founding of the PRC, only the year 1961 had fewer births, but this occurred under extreme conditions: It was the last year of the Great Famine. And of course back then China’s population was considerably smaller.
    • Why are total births falling even though the TFR remains unchanged? Simple. As China's population pyramid hollows out at the base, there are ever-fewer women in high-fertility age brackets. So even unchanged age-related fertility is generating fewer births.
    • Five years after lifting its one-child policy, China is mired in a demographic conundrum that feels like a slow-motion car accident. Though it’s hardly alone in facing the challenge of low fertility, it is one of a handful of countries where kids are expected to take care of their aging parents and grandparents in lieu of a strong social safety net. At this rate, there just won’t be enough young people to look after the elderly or support the economy. The main state pension system is on track to run out of money as soon as 2035.
    • That the birthrate continues to tick downward despite the government’s best efforts (see “China's One-Child Policy is Over but Chinese Fertility Rates Still Low” and “China Embraces Pronatalism—Decades Too Late”) speaks to the larger forces that are persuading young people in China to delay or opt out of parenthood. It’s not just that having a child is too expensive or too time-consuming, that the economic case for marriage is not as strong, or that more women prefer to focus on their careers. It’s all of these things. The government may succeed in making child-rearing more permissable, but they desperately need a long-term strategy to make it more appealing.

China's Birthrate: Lowest in 70 Years. NewsWire - Jan27 Chart1

China's Birthrate: Lowest in 70 Years. NewsWire - Jan27 Chart2

  • In his annual state-of-the-nation address, Vladimir Putin announced a series of new policies to boost the birthrate in Russia, including monetary payments for first-time mothers. These measures aggressively expand the “baby bonuses” already in place and are expected to cost $6.5 billion this year alone. (BBC News)
    • NH: It has long been known that Russia has a demographic problem. A crushing birth dearth that bottomed out in the 1990s has created a sparse generation of 20- and 30-somethings in Russia (see “Russia’s Demographics are Anomalous”). Even with a rising fertility rate, the dwindling number of young adults is resulting in fewer birth year over year. (See “Russia Enters Negative Population Growth Territory.”) Russia and other countries which face similar population challenges have long offered incentives for women to give birth (see "Bold New Policies to Encourage More Births.") While Russia already provides funds for mothers with two or more kids, Putin's new proposal will provide money for all new mothers. The country will also provide free school lunch and welfare for low-income mothers.
    • While Putin's new policy measures are a logical extension of his past pro-natalism initiatives, the fertility statistics he cited were attention-grabbing. Putin claimed in his speech that Russia’s fertility rate is 1.48 and he wants to raise it to 1.7. But most western researchers put the current number closer to 1.7 or 1.8, including the United Nations Population Division database (the gold standard for fertility statistics.) Why the discrepancy? If asked, Putin would probably say that he derived his numbers from cutting-edge data that were calculated and just-released from Rosstat, his state-run statistical service. Nothing amiss there. But a cynic could say that Putin was shrewdly using the bad news to his own advantage.
    • When it comes to reports about what's happening in a county, political leaders can take one of two approaches. On the one hand, they can inflate the good news and minimize the bad--the usual approach. Or they can dismiss the good and inflate the bad in order to mobilize the country to act on an agenda the leader has long advocated. That's what Putin seems to be doing here--putting a catastrophic spin on the numbers in order to get the Duma and the Russian public to go along with his plans. I'm sure new mothers won’t be complaining about the extra cash.
  • Job aspirations among teenagers worldwide have narrowed since 2000, according to a new OECD report. Despite major changes in the world of work, roughly half of 15-year-olds from 41 countries said they want to work in one of just 10 jobs. (Bloomberg)
    • NH: Gone are the days when kids dreamed of being astronauts or paleontologists. Now they dream of being lawyers and business managers. For today’s Millennial and Homelander children, economic reality has hit early. Instead of dreaming of working in some "dream job" as adults, a rising share of kids--now just over 46%--say they want to work in one of the same ten most popular occupations. See the OECD report itself and the first chart below.
    • IMO, this trend follows an age-old archetypal shift. Young Boomers and Xers, after being told to pick safe careers, chose to "follow their bliss" and pursue whatever creative niche pleased them. Young Millennials and Homelanders, after being told to take creative risks, are crowding into increasingly safe and conventional options. For nearly two decades now, the share of college freshmen who say they want to be "well rounded people" has been rising.
    • Gender differences in these numbers are also interesting. Dream careers for girls--but not for boys--are showing a marked shift toward careers that pay. Back in 2000, about 11% of girls said they wanted to be teachers, and nearly the same share said they wanted to be doctors. But in 2018, only 9% said they wanted to be teachers, while about 16% said they wanted to be doctors. Across the board, girls are now preferring jobs with better pay. Boys show no such shift. From 2000 to 2018, the number of boys who wanted to become police officers doubled, and the amount who wanted to be teachers slightly increased as well.
    • My advice to girls? Be careful what you wish for. If you're dream job happens to pay more, fine. But if you're choosing your dream job because it pays more, you may be on course to a lifetime of disappointment. (See “Would Better Jobs Solve Millennial Burnout?”)

China's Birthrate: Lowest in 70 Years. NewsWire - Jan27 Chart3

  • At a median age of 31, Millennials’ share of the U.S. housing wealth is a mere 4%. When Boomers and Gen Xers were at a median age of 35, they owned 31% and 9%, respectively—figures suggesting that Millennials aren’t likely to catch up to anytime soon. (The Washington Post)
    • NH: Consider this an update to our earlier story about generational differences in wealth ownership. (See "The Graying of Wealth... in One Picture.") That earlier story looked, by generation, at ownership of all wealth (total net worth by household). This story looks just at real-estate wealth--valued owned, not netting out mortgage liens on property.
    • Important: These Fed numbers may be flawed. But if they are anywhere close to the truth, the bottom line is stunning.
    • This story is so important that we are going to release an in-depth report on these numbers later this week. Stay tuned for further analysis. 

China's Birthrate: Lowest in 70 Years. NewsWire - Jan27 chart4

  • Gen Xers are redefining the midlife crisis: Instead of going wild, they’re focusing on getting healthy. Many are motivated by the desire to be around for their children in old age, and they’re finding plenty of outlets in the booming wellness industry to help them. (The Wall Street Journal)
    • NH: Gen Xers are being pushed into this new sobriety by a number of forces. One, clearly, is their economic fear of downward mobility--not just of falling beneath the living standard of their parents, but also of being unable to provide for their own security in retirement. (See "Xers Want to Retire Early--Good Luck.") The familiar behavioral symptoms of a midlife crisis--working and saving less while spending more (and on crazier things)--is simply not an option.
    • Another force is their growing awareness of mortality and how careless living habits may cut short their lifespan. As Gen-Xers learn about rising midlife mortality from cardiovascular disease (see "Why U.S. Death Rate from Heart Failure Is Surging"), a growing number are overhauling their diet and adopting strict exercise regimens. Midlife is not a time to let go. It's a time to tighten up.
    • There's also a broader generational pattern at work here. How people approach midlife is strongly shaped by how they have come of age and experienced young adulthood. Generations that were required to "play by the rules" and take no chances in their early years are very likely to approach midlife as a chance to break free and "live a little." This was basically the collective life story of the Silent Generation. So when the Silent began reaching their 40s and 50s in the 1970s, their leading lights (like Gail Sheehy, who first coined the term "midlife passage") defined midlife in those terms. For Sheehy, the challenge of midlife was coping with suffocating claustrophobia, that is, finding yourself lost in a world of secure affluence in which you never had any options for taking risks or making choices.The solution to this challenge was famously (for men) the divorce, the toupee, and the sportscar.
    • Gen-Xers, coming along at the opposite end of the cycle, are experiencing midlife very differently. Most Gen-Xers have taken a lot more risks and experienced a lot more freakish life experiences than their parents had at the same age. So for Gen Xers, midlife is more like disorienting agoraphobia: You've experienced little security; your affluence is under siege; and you have a haunting sense that you've been able to make a lot of big choices--and that they've mostly been mistakes.
    • So Gen-Xers are dealing with midlife not so much like Woody Allen's generation (which was still trying to escape the Eisenhower '50s), but more like F. Scott Fitzgerald's generation (the Lost Generation, which was trying live down the Roaring Twenties). Fitzgerald believed his generation faced a "crack up" in midlife. Near the end of his life, cut short at age 43 from a heart attack, Fitzgerald wrote, "Now once more the belt is tight and we summon the proper expression of horror as we look back at our wasted youth."
  • In a dramatic step, Hungary is going to start offering free in-vitro fertilization treatments to counter its population decline. The government has taken over six fertility clinics around the country as it doubles down on its “procreation, not immigration” strategy. (NPR)
    • NH: Well, this is a first. Hungary is making the leap from tax benefits and subsidized loans (see “Hungary’s Incentives Mean More Marriages But Not Necessarily More Babies”) to the offer of free IVF for apparently all heterosexual couples, starting in February. This is a first for Europe. Throughout the rest of the EU, IVF is available at little or no cost only to those mothers who meet strict criteria. The least restrictive countries are Denmark and Spain, which offer it to all women regardless of sexual orientation or relationship status. But there you have to pay.
    • All this is welcome news for the estimated 150,000 couples in Hungary who struggle with infertility. Removing barriers to fertility treatment will undoubtedly boost births among those who want kids but can’t have them. But should prospective moms worry that Hungary's IVF clinics will now favor multiple embryo impants--and thus multiple births? (See "After a Long Rise, Rate of Twin Births is Dropping?") Hard to say. While the newly acquired clinics have said that nothing will change about their treatments, Prime Minister Viktor Orban insists he wants more babies at all costs.
  • Fully 72% of China’s 12- to 14-year-olds have myopia, up from 58% in 2010. Officials are starting to worry that military recruiting will suffer because not enough people will be able to meet the vision requirements. (The Economist)
    • NH: Rates of myopia are increasing rapidly in every economically developing society. In the United States, the prevalence of myopia in young adults has roughly doubled since the 1970s. Yes, heritability does play a role. The likelihood of developing myopia is partly inherited from parents. And the likelihood also varies by race and ethnicity: It is much higher among East Asians, for example, than among Caucasians. In China and Taiwan, for example, over 80% of young people are now being diagnosed as near-sighted by age 20.
    • But clearly something else must explain why myopia has been rising so fast in so many countries over the last century. One or more powerful environmental drivers must be at work around the world.
    • What might those drivers be? Many have been suggested: Diet, exercise, stress, too much reading, too many smartphones, and too much time spent indoors. Mounting evidence suggests that this last explanation--too much time indoors--is closest to the mark. (See "Focusing on the Eye-Care Industry.") Specifically, the growing eye needs sun exposure. According to this theory, light stimulates the release of dopamine in the retina. This neurotrans­mitter in turn blocks the elongation of the eye during development. (In an elongated eye, the lens focuses light before it reaches the retina.) In 2009, German researchers showed that high illumination levels—comparable to those encountered outside—slowed the development of experimentally-induced myopia in chicks by 60 percent. Similar results have since been documented in human children. Schools in China, as noted in the Economist article, are starting to require that kids spend time outdoors.
    • So what's the new wisdom regarding myopia? For children, the best eye-care is lots of sunshine

China's Birthrate: Lowest in 70 Years. NewsWire - Jan27 chart5

  • According to a recent study, genetics play a major role in determining whether kids end up being bullies or victims of bullying. Research with twins indicates that the heritability of perpetration and victimization are around 70% and 65%, respectively, among both boys and girls. (Behavior Genetics)
    • NH: Most surveys show that the prevalence of youth bullying in K-12 schools has gone down over the past 15 or 20 years--even as kids, parents, and teachers worry about it a lot more. With the advent of mobile phones, everyone agrees that "cyber-bulling" opens up a whole new dimension to the problem.
    • What do we know about bullying? Well, we know that there's a strong (0.6 to 0.7) correlation between the bullyers and the bullied. Yes, they're often the same people. We know that bullyers tend to exhibit poor impulse control, whereas the bullied suffer low esteem and are sometimes at risk of suicide. And we know that bullying is somewhat more common among boys (where it usually takes the form of physical or verbal abuse) than among girls (where it more often takes the form of social exclusion).
    • Yet here's a question that's less often discussed: Is bullying or being bullied an inherited trait? Or is it learned from the environment? As it turns out, there is a long research literature on this topic since many investigators over the years have noticed a tendency of bullying to run in families. Only recently have they been able to use identical twin and sibshib samples to analyze this question statistically. The study described here here is the largest yet--involving over 20,000 boys and girls in the Netherlands. Teacher survey were used to identify bullying behavior or victimization (for which the incidence rate was roughly 25% to 33% of all kids, roughly in line with other surveys).
    • The results were remarkable. The population variability in bully perpetration and bully victimization was 70% and 65% (respectively) due to heredity. Only 10 to 15% was due to the environment alone. The rest was mixed effects. This research adds further depth to the wide variety of personality traits (like extraversion or anxiety) and physical phenotypes (like adult weight) which are known to be at least 50% heritable. For a comprehensive and readable survey of this research, I recommend Robert Plomen's The Blueprint.
    • I should caution. To "explain" bullying by saying that most of its variation can be explained by heredity does not mean that environment does not matter. Better schools, better teachers, or just a better culture in general might dramatically reduce the prevalence of bullying. It simply means that, given the environment we have, most of the variation you see in youth bullying lines up with biological parentage--regardless of the home or classroom in which the child is raised.
  • Lego is going after a new demographic: stressed-out adults. Faced with slowing sales growth, the company is pitching Lego-building as a form of mindfulness and releasing new sets catering to nostalgic Xers. (The Washington Post)
    • NH: In recent years, Lego sales have declined because people are having fewer kids (see “Lego Sales Slump.”) Now, Lego is trying to sidestep their demographic challenge by advertising the toy to both kids and adults. The toy company is now selling its playsets as a way for adults to unwind after work.
    • Give Lego props for re-branding its product to a high-income world besieged by rising stress levels. In particular, Millennials and Gen Xers have increasingly been prone to high levels of anxiety (see “Millennials and Homelanders Have One Thing in Common...Stress!,” “Xers are Stressed in the Workplace,” and “The Young and the Anxious.”) So Lego is now packaging its product as a stress cure.  
    • To add greater appeal for for today's 40- and 50-somethings, Lego is also developing Lego themes that resonate with key coming-of-age moments for Gen Xers. With playsets that replicate the Friends coffee shop and the entrance to Jurassic Park, Lego is selling Gen-X nostalgia. What's next? Maybe a Lego version of Ready Player One?
    • Lego will continue to targets kids, of course. (And target kids and parents together.) Lego may find Homelanders even better suited than Millennials for their product. As the article points out, part of the appeal of Lego is the step-by-step instructions, which allow you to create a perfect model every time. If you don't want to, you don't have to take any creative risks. For Homelanders, any activity that can promise professional-looking results every time is right up their alley.

      DID YOU KNOW?

      Sin City No More. Everybody knows that what happens in Vegas, stays in Vegas. But for the first time since 2003, the classic slogan is no more: The Las Vegas Convention and Visitors Authority is updating the city’s main promotional campaign to “What happens here, only happens here.” The new slogan debuted in a glitzy commercial during this year’s Grammys, which showcased tourists enjoying a wide range of activities in Vegas: UFC, Cirque du Soleil, clubbing, fine dining, and concerts from stars like Christina Aguilera and Aerosmith. There are plenty of bright lights—but conspicuously, no gambling. While the new slogan doesn’t ditch Vegas’s “Sin City” reputation entirely, it’s clear that officials want to frame the city as a place for unique experiences (Millennial-friendly) instead of a place to escape past indiscretions (Xer-friendly), as they continue to branch out beyond the casinos and bars that were once its bread and butter (see: “Winners and Losers in the Casino Industry”).