The Youth Gap

It’s said that if you haven’t made it by the time you’re 30, you never will. Cruel perhaps, but there’s probably more than a little truth there. Keep that in mind while reading Steven Chapman’s panglossian prognostications of Europe’s demographic trends:

But rest easy: There will be a next generation of Europeans, and another one after that. To call a decline in population “suicide” is like referring to a diet as “starvation.” Europeans are not refusing to reproduce — they are just doing it at a slower pace than their parents and grandparents did.

This is not a sign of failure. It’s a sign of success. For millennia, parents had to produce babies in large numbers just to see some survive to adulthood. Today, thanks to better nutrition and medical care, people can bear fewer children but still count on having grandchildren.

Quite right – but Chapman has told you only half the story. The rest of the story is, Europe (and Japan) is getting older at an unprecedented rate. The problem isn’t merely that Europe’s populations are or soon will be shrinking; it’s that they’re aging.

For a country to stay rich, it needs to continue innovating and increasing productivity – the things which made it rich in the first place. With an aging population, productivity concerns become even more important. Even if Europe were to raze their welfare systems to the ground, somebody would still have to pay for the increasing health care needs of an aging people. An economic system that isn’t increasing productivity at a high rate won’t be able to cope.

The median age in Europe has already reached 40 in countries like Germany. It is expected to reach almost 50 by mid-century. In contrast, the median age of Americans is 35 and isn’t expected to increase to much over 38 in the next five decades.

Now then. If your most dynamic people are the under-30 crowd, what are the long-term prospects for your economy, when over half your population is almost 50 years of age or older?

The question isn’t, as Chapman argues, whether there will be Europeans in the future. The question is: will they be a part of the First World or the Third?