This article is a transcript of Episode 3 of Conceivable with Noor, featuring Robin Hanson. Robin is an associate professor of economics at George Mason University, an author, and writes his personal blog called Overcoming Bias.
Robin joins us today to discuss how dramatically worldwide fertility rates are falling, the leading cultural causes affecting fertility rates, and what impact declining fertility rates will have on the world and economy of the future. In addition, he shares results of a X poll he ran, revealing what cultural factors the poll respondents are most willing to change in order to reverse falling fertility rates. You can read more from Robin on his blog, Overcoming Bias.
You can find the original episode here:
Transcript
Noor Siddiqui: Robin Hanson. It's amazing to have you on the podcast. How's it going?
Robin Hanson: Nice to meet you.
Noor Siddiqui: Yeah. Great to have you. Cool. I think we should just jump right in and start talking about, the fertility collapse and fertility decline. You've written a lot of really cool things on the topic. Do you want to just start by just giving folks who have no idea, don't understand at all what's going on, you know, could you just define what's going on?
Robin Hanson: So most of you know that people are having fewer kids than they used to. And many of you probably know that worldwide, this is now fallen below replacement. That is most places in the world are below replacement. You can probably guess that the places that are above replacement are mainly because they're poor and on the trajectory to be like the rest of the world. And so demographers can forecast the consequences of future population very clearly for people who already exist because, you know at what ages people die is, is pretty well known. The only question is, what is future fertility? That is, how many babies will there be? But over the last century or two, we've actually had a pretty consistent trend worldwide toward lower fertility as places get rich, there's variation, but worldwide it looks pretty predictable.
Once upon a time, people said, “Oh, well, what happened was first, you know, mortality declined, and so then fertility is declining to match it. And so it wouldn't fall below replacement.” And in the last few decades, what we found is, yes, it does fall below replacement. So, there isn't some, you know, magic matching process that's going to ensure that the population doesn't decline.
It's part of much larger, complicated, cultural changes we've seen, and those cultural changes are pretty, pretty deeply entrenched. So many people, when they come to this and say, “oh, well, it's a complicated thing, but surely we can fill some knobs and, you know, things will change.” It doesn't look so easy.
So we can go into what are all these forces that are preserving and pushing in this direction. But even then you might still not to be concerned. So there are two things that I learned that really made me focus on this.
One is the fact that I think economic theorists of growth understand, which is:
In a declining population, the economy will also decline, and in a declining economy, innovation grinds to a halt. That is, if once the population, say, is one tenth the previous peak, the innovation rate will be less than one tenth that peak, and you go farther down and it gets even smaller. So, the straightforward prediction is that within 30 years or so, the world population will peak, world economy will peak around then, or even earlier. World population economy will fall and then it'll just keep falling for centuries and during that centuries long period, innovation will just stop.
And the other big thing I realized is we actually see a few exceptions in the world of insular, highly fertile cultures, like the Amish, like the Haredi Jews, and a few others. And they are succeeding in growing almost double every 20 years for a century. They're on track to eventually dominate the world if the rest of the world just keeps falling in population and they don't. Some of them will probably fail as they try to adapt to various changes, and that may risk their high fertility status, but probably not all of them will fail.
So then the future looks like something like the Amish take over the world in a few centuries. For example, in the United States, there are now 300,000 Amish people. They were 5,000 people a century ago. And if they keep doubling every 20 years and another two centuries, they become 300 million and dominate the U. S.
Noor Siddiqui: They're going to inherit the earth.
Robin Hanson: So I think part of, um, the framing for this tends to get, I think, lost on people. So the fertility rate drops over the last 8 years for France is 1.68. Those numbers seem small, but if you frame that in terms of how does that actually change the demographics, I think that then it's become a little bit more compelling.
Noor Siddiqui: So just to give a little bit more on, uh, just some other countries: This is comparing 2023 fertility rates to 2015 fertility rates. So it was 1.85. Now it's 1.42 in Sweden. In America it was 1.84. Now it's 1.64. For the UK it was 1.78 now it's 1.45 China, pretty dramatic one. It was 1.75. Now it's 1.05.
So if you put this in the context of what are the actual population changes for South Korea? You're going to see 50 percent fewer people in 50 years. China, you're going to see 30 percent fewer people. Europe 25 percent fewer people and America 20 percent fewer people.
I think maybe that framing also helps people understand how dramatic these fertility changes are over, you know, just the last 8 years.
Robin Hanson: The key things to notice is we fell below replacement and still going down. So there wasn't this magic “Everything will stop at replacement” thing. And the other thing is just to understand what processes are behind this. I mean, so just saying there's these numbers on a graph, you might say, well, maybe they could reverse.
And I think if you see the processes that are that are behind this, you'll realize how hard these will be to reverse. Maybe one of the biggest ones is just gender equality. In societies with less gender equality, they’ve had higher fertility. And so the more we've made sure that women have the same opportunities as men to do all the same things men have, some of them choose that. And that's often at odds with higher fertility.
Another trend is our longer, less flexible career paths. Young women who want to be as good as men at whatever men are good at, they follow a career path. And that means many years of schooling and then early career jobs, which don't offer much time off. And the idea that you can just take five years off and then jump back in the career… these career paths just aren't very tolerant of that. Once you're off, they're not that eager to let you back on. And that's another thing that's in the way of fertility in order to stop that you somehow have to shorten these career paths or make them more flexible.
And there's very little inclination for that a third trend is we've swapped out what they've called cornerstone marriage for capstone marriage. Once upon a time, you would just get married early. You weren’t successful yet. You weren't even very well formed. You were plastic. And then the two of you would try to succeed, and try to form in the context of each other. And that would be who you became.
Noor Siddiqui: Startup versus like a merger or acquisition situation, you're kind of doing the seed stage then.
Robin Hanson: Right. So now the norm is instead of, you know, you're supposed to wait until you have a secure career and also wait till you figure out who you are, then find someone else who matches who you are, who you've become, and then get married and have kids. And that just leaves a lot less time for having kids after that long preparation process, and you're just much pickier, of course.
So previously, when you were marrying at 18 or something, you weren't being very picky
Noor Siddiqui: Well, maybe let's just jump into the first two, right? Because basically the first one, what you said was just gender equality, and then two is inflexible careers, right? So I don't think anyone's really willing to basically reverse gender equality. I think that was probably here to stay.
So maybe for career flexibility, what do you think, because this isn't just restricted to the U.S., this is literally a worldwide fertility collapse problem.
Do you think that one's likely to change?
Robin Hanson: So remember the context here is there's two ways to solve the problem. Somehow we change world culture, or world culture continues as it is. And these small insular groups on the side just slowly grow until they take over. Those groups are tolerating enormous gender inequality. The career thing, honestly, I mean, it's really hard to induce careers to make people who are hiring to consider someone who's taken a long pause.
Because they are uncertain whether this person, you know, is randomly selected. That is, if people were randomly choosing pauses, okay, but if people are choosing pauses correlated with some other feature that's not desirable, then they are right to be suspicious of them. And so how can you, how could they convince people not to be suspicious of that?
An extreme thing I considered at one point was just having a rule that basically everybody had to take a 10 year career pause that is just make everybody quit work or school and say, third kid, then you can go back to your career path. So if you can do that in less than 10 years, you get to be off.
Until you have enough kids, you have to stop going to school and preparing for a career, and everybody has to do that. And if everybody has to do it, there's, there's no particular signal. The fact that you didn't do it, and that's really expensive for society.
I mean, the fundamental question is. Can you make it so that having a child doesn't actually get in the way of your career? So if you can go so far as to like, you know, give them so much support that they can push on an intensive career path and suffer very little for having kids? You know, that's a really high bar because at the moment, you know, I know kids are a lot of work, even if you get some help.
There's still a lot of work and they, they definitely do cut back on your career. But it's, it's just really hard to make kids that easy.
In order to do that, you basically need pretty full time daycare of kids. Right. And that's expensive. Right. So, so then we can talk about how could we make people be able to afford that? So there's a literature on, like, offering incentive to parents, and what we see is small incentives don't do that much.
Noor Siddiqui: I think it just rationally, it sounds like it's not that useful, right? I mean, the point is, are you gonna lose a career that's making you $250,000 a year whatever that person's salary is, if it’s on the binary difference between, are they able to keep that job or they're not able to keep that job. Then of course, these benefits on the margins wouldn't really make a difference in someone's choice whether or not to have kids.
Robin Hanson: Well, I think, I think there are many margins, but I think just what we've seen is people really want to compete and succeed in careers. And they want that strongly enough that offering modest incentives to lose a lot on careers doesn't do it for them. I think we economists are pretty confident that there is a price you could offer people enough, and then they would make a difference.
So, one way you can think about it is you can offer them so much money that they can pay somebody else to be the parents and then they could focus on their careers, but it's similar to draw for them enough. Maybe they just want to have parenting be their career. Either way works like somebody has to do the parenting.
Noor Siddiqui: So what do you think that number is in the U. S.?
Robin Hanson: I think I would start out trying, say $300,000 per kid. But I have a reason for picking that number,
Noor Siddiqui: Okay.
Robin Hanson: So, you know, I've seen people say that, like, that might have a substantial effect on fertility, maybe 30 percent increase or something. But my reason for picking that number is it matches our estimates of the unfunded liabilities per citizen in the U.S.
Noor Siddiqui: Okay. Explain.
Robin Hanson: So, one solution fertility is thinking the abstract is if you could endow your kids with debt, they had to repay and then it would be a profit making enterprise to have and raise kids because they would then owe you a lot of money. You could sell this debt to other people to pay for your expenses early.
And then investing in kids would be a profit making enterprise. Now, most people are horrified at this description because what we like to imagine is, you know, you give a gift of life to your kids and you're not then profiting off of their life later so much, right? So people are horrified at this at the individual level, but it turns out at the national level, we don't mind.
In the United States basically we've promised citizens a bunch of benefits in the future that we haven't arranged to pay for yet.
The way we arrange to pay for them is we plan to tax people in the future. And that means every U.S. citizen is on the hook to pay a bunch of debt that we've arranged for them.
And so that's just like the individual level endowing your kids with debt, which we find horrifying, but at the national level, that's exactly what we're doing. We're endowing every new kid with debt. And the actual, the sort of the direct debt that we have is like 30 trillion total, which is about $100,000 a person.
If you look at the unfunded liabilities, the debt we've things we promised to pay the smallest estimate of that I've saw was $100 trillion, which is about $300,000 a person.
If we're actually going to raise taxes in the future to pay for all these things we promised, we basically then doing that by taxing each citizen $300,000, which means that's the financial benefit we, the whole nation gets from every new kid. Every new kid on average is going to pay that $300,000, so we should be willing to pay up to $300,000 to get that new kid to exist, to pay the rest of us.
Noor Siddiqui: So $300,000 to be born, or $300,000 per year?
Robin Hanson: To be born and raised. That is to become the citizen who pays all these taxes.
Noor Siddiqui: So basically for 18 years of existence, they get $300,000?
Robin Hanson: So there's the question of how you spread those payments out over time. And there's also the question of how you adjust the payments for, you know, the quality of the kid. So a common complaint about just paying parents $300,000 per kid is that's going to induce the lower quality parents to induce a lot of low quality kids who are not worth the average kid of $300,000. They'd be worth less.
Noor Siddiqui: When you're saying worth less, you're talking about in terms of what is the amount of tax?
Robin Hanson: Well, how much will they pay in the future?
Noor Siddiqui: Yeah. So basically it sounds like that's one way to think about it. Is there, is there other, other sort of competing ways about, because basically the other way that you can think about it is just what is the economic loss to the family, right?
Robin Hanson: So, so there's two ways to do it. In general, you could try to estimate costs or you could estimate value. So I think it's simpler to try to estimate value, because the cost will vary a lot. So that's why this value, the one value kids get is just they'll pay future taxes that we've set them up to so that I like that because it's easy to calculate and easy to justify. So, and in particular, when you have a house and you take a loan on your house, if you took out an extra loan on your house to pay for your living expenses, that would seem unsustainable because eventually you're going to run out of the value of the house and then you won't have a house and you'll have to find some other source of income, right?
But if you borrow money on a house to make an addition to the house, that can make more sense because the money you borrow could increase the value of the house. And then you're not, you know, wasting money of the value of the house by spending it off. You're making a good investment in the house, right?
So similarly, uh, if we spend money to create kids, that's not just spending money to get some consumption. It's an investment. that's why you could fund it with debt. So if we pay $300,000 per kid to parents to have a kid, we could fund that by debt. We could just borrow another $300,000 to pay for that.
And then the rest of us don't have to pay for it. You see, we give the parents the $300,000, and then we borrow the money from investors. And then later on the taxes pay the investors and we're not losing out. Right? So that that's because it's a good investment.
Noor Siddiqui: That's so interesting. When you say $300,000 that way, it seems actually quite low. It seems low that it would be that much for an entire lifetime worth of tax contributions, right? You're talking about basically from age 18 to age, whatever,
Robin Hanson: Well, it's going to be a fraction of their tax contributions. Of course, we're thinking about the present value of a future discounted sum,
Noor Siddiqui: I see. Okay. So you're saying basically because those, those valuable dollars will increase. Is that, is that we're talking about?
Robin Hanson: Right. I mean, you know, the economy will grow and the tax base will grow and future income will be higher and they'll pay a higher percentage of that as far as taxes.
Noor Siddiqui: Yeah, got it.
Robin Hanson: Now, I mean, I think kids are worth more than just the fact that they'll pay future taxes, but that's more of a value.
Noor Siddiqui: Let's roll back and just talk to all of the causes. So basically we talked one cause was of infertility kind of was career sacrifice. And then what were the other, other candidates?
Robin Hanson: Okay. So there was a long and flexible careers. Third was the cornerstone versus capstone marriage.
Noor Siddiqui: Okay.
Robin Hanson: Right. So because people have changed their standards for what it is to get married and what you should ask demand of your marriage partner and yourself at that point, we just wait a lot longer to get married.
Noor Siddiqui: So basically, because people wait longer to get married, then they're going to have fewer kids.
Robin Hanson: They wait longer because they have new standards for what an appropriate marriage is. And unfortunately, that's also pretty deeply embedded. It’s hard to imagine people willing to let go of that just to get married at 18 with whoever they can find and figure things out later. That's pretty at odds with our current norms about marriage.
Noor Siddiqui: Okay. That's number three. Do we have other candidates for those?
Robin Hanson: Yes. So another one is that in traditional societies, one of the reasons it was feasible for young people to have kids is they were integrated in their larger families. That is families might arrange the marriage. They might live with their parents. They would maybe get a job from their parents.
And the grandparents were basically much more involved in children.
Noor Siddiqui: And they were also younger, right?
Robin Hanson: They were younger at the time too. Sure. Sure. So our norms have changed. That is, that we want the parents to, you know, maybe help, but to stay out of things. You know, children move away from their parents and they match up with somebody who lives far away.
And then they don't expect parents to have much say in who they marry or when they have kids or what their job is. And then they also don't expect parents to help that much in the parenting. And that all makes it harder to parent because all that extra grandparent help used to matter a lot. That's also a trend that's hard to imagine changing.
Noor Siddiqui: That's also the, the built in low cost childcare too, right? That's sort of around the clock, around the fringes and it, you don't feel bad about it because you don't have to interview these people. You've kind of already lived with them your whole life. You kind of know they're pretty good because they made you, right?
Robin Hanson: Right. And two other trends that go against fertility. First, we're much more urban. So it's, you know, very consistent trend worldwide that denser city, urban living people have fewer kids. And then the other one is religion. Religion has promoted fertility pretty consistently, and we just are becoming…
Noor Siddiqui: Oh, wait, why is being more urban? Why does that go against people having more kids?
Robin Hanson: So I'm not clear we understand it. People often talk about how the kids don't have so much space and how housing is expensive. I'm not sure if that's the main thing, but it also goes along with urban parents just have a lot more fun things to do instead of having kids around in their world around them.
So that's another story that we've made the world more fun for adults. Offered Disneyland for adults of activities and places to go and things they can do in their career and their side and that adults are more motivated and energized by all these other things.
Noor Siddiqui: Okay. So basically, it's a combination of them being more distracted and then basically maybe not having enough space for the kids when they do arrive. Okay, religion.
Robin Hanson: Right. Religion. A lot of people in the last months, et cetera, have talked about fertility and how to promote it. And they talked about some of these trends I've talked about, and they talked about ways to maybe counter it. And I think the biggest thing they're missing in those discussions is that if you have a small group in our society that counters some of these trends in their friends and family, say, when they have kids, these kids are just going to go mix with the larger culture and get assimilated and your deviation will fade away.
Noor Siddiqui: hmm.
Robin Hanson: So the Amish and Haredi Jews, et cetera, who have higher fertility, they don't, they not only have cultural elements to promote fertility, but just as important, they have a high degree of cultural insularity that allows them to continue to be different from the larger culture.
So that's why another one of the key trends is over centuries, we have become a more integrated world culture. And cities are more integrated culture. You are part of this citywide culture and you will be very influenced by what people all over the city you're doing. And that makes it harder to have a deviation where a group, smaller group of people has a different culture and sees things different.
In a rural place, you can have an area that just has a different local rural culture and they are mostly seeing each other and they are less influenced by global culture. And so that's something that would allow them to be different in any ways. So another key feature about history is that the world has become more online.
You know, culture is definitely part of that. You know, if you just lived in a small town a century ago, it was mostly the other people in that small town you interact with and their culture and behavior. And so if that small town had higher fertility, then you might too, because you would just be going along with what other people are doing there.
And you would maybe read a newspaper about far away things, but it wouldn't really impress you in the way that today you watch television, you're on the internet chatting, you're immersed in this world culture and having a lot of contact with them. And that means you're influenced by what people elsewhere are doing, and you're comparing yourself to them. You're comparing yourself to your career, yourself, your money, your children, et cetera, your vacations. And that's meaning it's hard for you to deviate from this culture you're immersed in.
Noor Siddiqui: Yeah. Okay. Cool. Do you think there’s other causes that you think are in the top five or top 10 that should be considered beyond the ones that, that we discussed?
Robin Hanson: I guess in particular, you know, in terms of when people do studies, female education is especially strong correlated with fertility. And so, in part of that's just education gets longer for career paths, but it's also partly education is where young people assimilate. And so when education is dominated by people who are deeply immersed in larger world culture of a low fertility culture, that's when young girls and women assimilate that culture and become low fertility.
So education is both something that takes a long time and delays fertility, but it's also a thing, a channel by which world culture takes hold of people.
And then we also have these interesting studies where like TV shows and radio shows, when different places started to like watch TV from outside their village or radio from outside their village, fertility went down at the times when they got exposed to that, because that tends to expose them to this larger world culture of lower fertility.
These TV and radio shows showed families with lower fertility, and they were seen as high status and exemplary. And then people wanted to copy those. So transmission of culture is really important as part of this process.
Noor Siddiqui: Oh, so could you assign values to what percentage you would say each of these factors weighs into declining fertility?
Robin Hanson: Well, I have a related answer that is, I did a poll recently on Twitter. I have 85,000 followers, so that let me ask lots of questions and I usually get a few hundred people to answer. So I got 2000 answers, roughly. And so I picked 8 of these trends and I asked people, which were they most willing to try to reverse in order to reduce increased fertility. How willing are people to accept that reversal?
Noor Siddiqui: Okay, so I agree. That’s the best next question. But first, before we get into that, can you just tell us what you think are the real contributors? And then let's get into what people are, are, would be willing to…
Robin Hanson: I mean, clearly the sort of sharing culture is enormously important at a metal level. The world was fragmented into a million little villages doing things separately. Then some of them would have high fertility and the world wouldn't have this problem. So certainly at this meta level, the fact that we're all part of the shared culture is the central fact causing fertility decline.
I'm not sure I can give you percentages. But certainly the most consistent trend we've seen is increasing wealth.
Over time, and that's obviously one of the trends. We're not very willing to reverse. We're not willing to get desperately poor to increase fertility.
Noor Siddiqui: hmm.
Robin Hanson: Sorry. The thing I didn't mention in this list was higher parenting effort and that's pretty top on the list. So my son just had a daughter and I can see that my son is putting a lot more effort into parenting his daughter than we did in him.
Over time, there's just increasing standards for how much effort parents should put into kids.
And I even saw a statistic recently that like the number of clothes that parents are getting their kids are just twice as much now as they were 25 years ago. So basically we've just greatly raised our standards and that discourages fertility because you know, when my son has one kid and they're putting a lot of effort and they think do we have time for a second kid? Put it off because it seems so much effort for this kid?
Noor Siddiqui: Mhm. Well, because it is, right? It's twice as much effort as their parents put in.
Robin Hanson: Right, but that that's discouraging fertility in a pretty direct way.
Noor Siddiqui: Got it, got it. Okay, so basically, so it sounds like for you, your personal stack ranking for like the top three, number one is connected global culture, number two is higher parenting effort, and then what's number three?
Robin Hanson: The capstone versus cornerstone marriage is a pretty big deal, but it's probably similar with the long career paths, long schooling paths. I mean, those are both pretty big things.
Noor Siddiqui: okay, cool, alright, so those are your top three, and then what, what do people think are the ones that they’re…
Robin Hanson: So the thing people were most willing. So I asked them to talk about willingness to do, you know, calibrated in terms of how effective that is. And so you should only say something is your top priority if you think by doing this, we could have the biggest effect on fertility relative to sort of the costs of letting this trend reverse.
And their top pick was about grandparents involvement.
Now, I suspect that's because these people aren't imagining themselves being the grandparents. I suspect most respondents to the poll were thinking of themselves as the potential parents now and saying, yeah, I'd like a lot more help from my grandparents.
But I don't think they were imagining the grandparents picking their spouse for them and say, and arrange marriage. I think they were just imagining parents coming and giving help
You see, but I don't think they're really thinking through how much compromises do you have to make with your grandparents to get them to help by living near them, et cetera. And so I'm not sure I believe that, but that was the top result.
Noor Siddiqui: They want the benefits of having more parental support, but not the costs. And they didn't think through the costs, maybe. Okay. Fair.
Robin Hanson: Right. Okay. The second one was the long stiff career career career paths.
I think, you know, many people do realize that we don't actually need to go to school for this long in order to be qualified for jobs. We're in a rat race where if other people get a graduate degree, we have to, if we're going to be competitive with them.
We know that this isn't very efficient, but, you know, the question is, how can we stop it?
The only thing I can think of is some sort of law that prevents everybody from getting more schooling or more things. But that's a pretty dramatic response. It's pretty hard to sort of imagine how exactly to do that, but I think there's sympathy for it in the sense that I think people realize we're just going to school too long.
Noor Siddiqui: Yeah. I feel like the most canonical example of that is medical school, right? Because you could just cut out undergrad. If you want to be a doctor, just go start on that.
Robin Hanson: Right. Sure.
Noor Siddiqui: Yeah, I mean, they do that in other countries.
That one's not super rare. Okay, cool. That's number two. What was number three that people are most willing to change?
Robin Hanson: But it was the parenting effort. So, in the abstract, I think maybe people realize they're doing it. So, there's actually a lot of literature on over parenting.
Noor Siddiqui: Mm hmm. Mm
Robin Hanson: And many people realize that looks like a lot of people are over parented, but again, it's this thing you're stuck into. If other parents are paying a lot of attention to their kids, you feel like you're a louse if you don't.
You're an uncaring parent if you're not putting in as much effort as they are. And you don't want to look bad to yourself and your kids, so we're all stuck. But again, it's hard to imagine how to limit that. I don't know how we would set limits on parenting effort exactly.
Noor Siddiqui: Yeah. Yeah,
Robin Hanson: And so again, it's this thing we're all stuck in together.
Noor Siddiqui: Mm. Yeah, I mean, it's almost like the solution to that is just to have more kids, right? Because if you have more kids, then by definition, you don't have a choice.
Robin Hanson: Right, but then you're still going to feel bad that you're neglecting the kids.
Noor Siddiqui: Yeah, yeah,
Robin Hanson: And so the number four was the capstone marriage.
But again, it's an equilibrium thing. If other people are very picky about who they partner with, and you're less picky, it feels like you're admitting that you're just less worthy of a good partner.
And so I think it's hard for someone to pick a partner at age 20 or something when everybody else waits till 30, because they feel like they're lowering their standards.
And that's somehow admitting, you know, they just aren't worth as much. They're not worthy of as good a partner.
Noor Siddiqui: Yeah. Okay. So these are kind of some of the causes, right? They're sort of like deeply ingrained cultural decisions that society has emerged on over the last couple of decades.
What are the impacts of this?
Robin Hanson: So one of the things lots of people have noticed is that many nations have set up a retirement plan where instead of saving to pay for retirement, we just plan to tax the workers at the same time people retire in order to pay for retirement. And that's worked in the past when there's been a lot fewer retirees than workers.
But as population ages because of lower fertility, then it flips and we might have a lot more retirees than workers. And now it doesn't work so well to try to tax the workers to pay for the retirees. And that's just something we're facing. And, you know, it's pretty stark, but we basically will just have to tax workers more and give retirees less.
Noor Siddiqui: Yeah. Okay. So basically a collapse of social security. And then what's your kind of prediction on when that's going to happen?
Robin Hanson: Well, it's happening now in the countries that are hitting this decline first. So South Korea, Japan, China. They are now facing these things and they are looming problems in the near future.
Noor Siddiqui: Okay. That's, that's a big one. What are some of the other sort of big economic consequences of less people being born.
Robin Hanson: Innovation tends to be done by younger folks. And so, as the population ages, innovation is declining already. We get less innovation per person, and so that just means growth becomes slower. And so that probably means the economy might peak and decline before population peaks.
Noor Siddiqui: Mm hmm. That's really interesting. So you don't think there's a chance with people's health spans increasing, with all these different types of AI tools that people will actually be economically productive, innovative, making new things later in life? Or do you think it's still going to be the case that nope, people are always going to do cool stuff that contribute when they're young?
Robin Hanson: Consider a set of like radical technology change scenarios and ask how that changes the analysis. Many people I know are imagining super AI is coming soon, and therefore it won't matter what human workers there are, because the AIs will do everything. I'm skeptical, but yeah, that could happen. Some people imagine some sort of life extension or ways that people would live longer and healthier. But honestly, if you look at the trends on, you know, life and health, they're pretty consistent and not so great. So I got to say, I'm not buying it. I think you got to project the trends forward and assume, yeah, that's roughly what it's going to be.
We have not seen radical life extension, radical improvements in healthy life, and probably not going to.
Noor Siddiqui: Got it. So basically when you're saying young people are the ones who are innovating. What is the window that you're assuming? You're like, okay, people are going to make new things from like this age to..?
Robin Hanson: Well, it's a decline, but, you know, and we've already seen, for example, young people make maybe more fundamental innovations and old people make smaller variations, maybe more of them. And we've already seen a decline of fundamental innovation compared to other innovation. So, we're seeing the trend now.
Say, the fertility is 1.4, then that means if population falls by a factor of 2 every 2 generations. And so it falls by a factor of 4 in a century. And then, you know, that's a slow decline. Because, you know, we're at 8 billion now, so a century falling by a factor of 4 goes to a 2 billion. And then another factor of 4 goes to a half a billion, right?
And so you're looking at many centuries of a slow decline. But the key point is, you know, innovation declines proportionally, and so you're going to have these many centuries where not much improvement happens. Not much technology is invented or improved.
Noor Siddiqui: That's sad time. Okay. Basically it’s we can't really support retirees, and basically young people are taxed at a really high rate. Not much innovation. What are some of the other consequences? Is there any positive consequences or all the consequences negative?
Robin Hanson: Well, if you were worried about impact on nature, then as the economy gets smaller, it has a smaller impact will be pumping less carbon into the atmosphere. We’ll be encroaching less on nature, you know, reserves, et cetera. So if you don't like humans impact on the universe, then you will be happy to see fewer humans having act on the Earth.
So today in a city, if you have a whole city, that's full, then each person pays a modest fraction of their income for city services. If a city empties out, but the city services costs the same, then each person has to pay a larger and larger cost to for water and sewer and all those sorts of things.
And so the likely way that we'll deal with that is just some cities will completely empty out and people will crowd into the remaining cities.
Noor Siddiqui: Yeah, it's actually kind of crazy because what you're describing actually sounds like a doom loop. Right? Because basically it's like more of your salary is taken away for taxes and more of your salary is taken away for, you know, expensive city services. Now, it crushes young families or young people even more so that they would want to have even less kids.
Robin Hanson: Right. So, but they can solve it by just leaving some cities entirely and then crowding into the remaining cities. So whether your real estate investments go well, or that will depend a lot on whether you bet on the right cities. You know, the right cities will still do well because their real estate will be valuable, but most of the others will just be empty. And it might even be that the world concentrates on a smaller place in the world, like Europe or somewhere else where people move there so they can be near each other. And then other parts of the world just empty out.
Noor Siddiqui: So what do you think the chances are of basically reversing this global culture, reversing some of these sort of ingrained priorities that people have? It sounds like those are the three that people who are considering becoming parents think are possible. What's your personal thoughts on what we could?
Robin Hanson: What we could do is try to figure out how we think culture should change and then try to engineer that, but I don't recommend that. I recommend using capitalism that let capitalists figure it out.
Noor Siddiqui: Okay.
Robin Hanson: I would say, let's just commit to paying say $300,000 per parent. And then other people will try to figure out how to get that money.
And they will then search in the space of cultural changes to make it work. So I think, you know, towns and religions and culture groups of all sorts. Well, even employers, they will be trying to find ways to allow people there to have more kids while still doing the other things they want in order to get that $300,000.
It would be this, you know, a dollar sign in people's eyes. They'd be really trying to do it. So they would just search in the space of different ways to do it. And that's what we need is because I don't know the answer. And I don't think you do. And I don't think anybody does. What we want to do is just induce a bunch of experimentation to see what can work. So if you just offer enough money, then people will try to search, find ways. And then some places will succeed. And then other places will copy them. Once some places figure out how to do it, then other people go, “yeah, that's how we get the money,” and then they'll start to do it.
Noor Siddiqui: Interesting though, but I mean, if you look historically at some of the trends that you think are breaking down, it basically like the idea of people relying on their parents, and their parents being more involved in their marriage and things like that. It's not really economic, right?
It's more sort of like the social fabric has changed, right? If you, if you induce people back then with $300,000, they would, you know what I mean? Their parents wouldn't just leave.
Robin Hanson: So I think people incorrectly separate in their minds, money and culture.
Noor Siddiqui: Oh, okay.
Robin Hanson: Money affects money and culture affects culture, but they don't affect each other. And that's just not true.
Noor Siddiqui: Okay.
Robin Hanson: In the history of capitalism, a lot of cultural change has been driven by people with material incentives.
Noor Siddiqui: So basically these parents were drawn to leave their hometown for a bigger city so that they could get a better job and get a better partner and that led them to leave. Basically you're saying that economic pull drove them to leave.
Robin Hanson: Even workplaces have experimented with different workplace cultures exactly in order to attract workers. You know, firms have experimented with different consumer cultures in order to attract consumers. A lot of our culture is wrapped up in our work and our consumption patterns. And those have been heavily shaped by capitalism. And so because capitalists had incentives…
Noor Siddiqui: But basically the capitalist force is fewer kids, right?
Robin Hanson: What if you offer $300,000 per kid?
Noor Siddiqui: Where does that come from?
Robin Hanson: Because you can borrow it, like I said, because it's like adding an addition to the house. It's adding to future value. So in fact, you can borrow against it and pay for it that way.
Noor Siddiqui: But the only entity that would potentially be interested in that would be the government, but the government is sort of too myopic to really see that.
Robin Hanson: The government right now pays lots of its things by borrowing. That's why we have this $300,000 debt per person, right? So far, investors are willing to pay for that debt. So as long as investors are willing to pay for the debt to borrow, then we can borrow more. And so we can pay for kids by borrowing if we aren't willing to do it direct.
Noor Siddiqui: Oh, yeah. Sorry. I guess what I'm saying is capitalism has gotten us into the situation where women are like, well, I'd rather just compete and make more money, have a longer career. And all basically all of these consequences led women and their partners to choose to have fewer kids.
Right. So I guess I'm not seeing it. Very practically, who is going to be incentivized to offer this $300,000 loan?
Robin Hanson: So, the plan is the government borrows the money the way it's been doing.
Noor Siddiqui: Yeah. Okay.
Robin Hanson: It gets $300,000 that it pays per parent. I suggest to do that in a certain tax break way, but we could go into that if you want. But the key idea is: Potential parents now see this $300,000 and other people help them find a way to make that work.
So, for example, say you're an employer who has a bunch of female workers and you see that you're having trouble attracting female workers. You have to pay them more. And you say, ah, if I could make my workplace more baby friendly, then a lot of these mothers could get a baby, get this $300,000 and then be working, willing to work for me for a lower wage.
And they might find a way to set up a career path in their firm to make that work. So, why? Because they want the money. That is, because the women who might get the $300,000, they're willing to go to a job that pays them less if it allows them the possibility is still to get to pursue their career and get this money.
And so the employers would be matching that to try to make that work.
Noor Siddiqui: So have there been any countries so far on the more aggressive side of the spectrum who thought of this or just who just said, “Hey, let's just give parents X dollars?”
Robin Hanson: We have seen that the countries that have paid the most have had the biggest effects on fertility. So,
I think like Hungary is one of them. They paid a lot and they've had a big boost. In times in history, we've seen some boosts. So, for example, there was the baby boom in the United States from the 1930s through the 50s. And that also happened in Europe, and apparently the main explanation for that was lower housing costs.
The period of lower housing costs, and that seems so it definitely shows how simple material. Effects and have a big effect on
Noor Siddiqui: Change culture. Cheaper housing is actually a really good point
Robin Hanson: Right. But if you pay people $300,000, that lets them pay more for housing.
Noor Siddiqui: But if you do it to a bunch of people at the same time, then it just makes housing more expensive?
Robin Hanson: Unless they decide to go away from other people like to be more rural, right?
So if, if everybody bids up the urban housing, but not the rural housing, then they will find a way to go rural in order to get the money.
Noor Siddiqui: Yeah, cool. So if you were in charge, you would focus on the, $300,000 over affordable housing or any other?
Robin Hanson: I would love for people to reduce housing costs, but, you know, that's because we were crazy regulating housing and we seem to be stuck wanting to crazy regulate housing. But if we could somehow get ourselves out of that, I would love for us to stop.
But, you know, the money is the simplest direct knob to turn to make things happen. Um, honestly, the, the other thing I might say is maybe we, like most civilizations in history who noticed they had a problem of fertility with their elites or everybody, they failed to solve it. So we're up against a problem.
Lots of civilizations have seen and failed to do much better. And so that's not a good track record. So I think you should also consider the possibility. We will just fail at this and the Amish will win or something like the Amish will win. Let's really take that possibility seriously, really engage it.
Deeply that is try to see, well, how could I join them some way or ally with them or help them or something to take seriously the possibility that that's just how this is going to end.
Noor Siddiqui: Yeah. And then it, you know, on the, on the route of, you know, trying to make this $300,000 incentive happen, what do you think is the fastest path?
Robin Hanson: In some sense, people have to want it. So, I mean, we're not going to do a big policy like that unless some place is concerned like, say, Hungary or something that they're concerned enough about it to do a lot.
Noor Siddiqui: Yeah.
Robin Hanson: Um, And the question is, will that happen? And I'm not sure that is, I think there's already a lot of people adjusting their expectations and saying, well, it's not so bad of population declines.
And maybe that's what people really want. And we shouldn't really be pushing changes because that would go against gender equality, et cetera. And I think that may win many places, even most places, people will just say, because that's kind of what happened in most of history, right? Through most of these other civilizations that had declines.
They just accepted it and they accepted the decline and it just happened
Noor Siddiqui: Yeah, I see. Basically, it's sort of the quickest path is there has to be broad public outrage and support for it. And that seems like you have to change culture or change people. Basically, you have to show the negatives more clearly.
Robin Hanson: And in the US, it’s becoming somewhat of a politically oriented thing. But the question is whether that's good or bad. If it's seen as a thing of equal concern on left and the right, then it loses energy and interest. If it becomes seen as on one side, I guess, more on the right, then the people on the other side fight it. And I'm not sure which is the best way to actually succeed.
Noor Siddiqui: Yeah. Got it. Um, well, that's a pretty intense picture. It's basically, it's either we accept it or we fight it pretty intensely. Well, it was so amazing to get the chance to chat with you. I feel like this was a incredibly important topic. That's a little bit, unfortunately under hyped or under discussed.
So it was amazing to have you
Robin Hanson: And, and unfortunately, this is just going to be around for many, many decades. You know, 30 years from now, you might look back and remember, oh, yeah, people are talking about it. And it won't be that much worse 30 years from now. It'll be somewhat worse. Unfortunately, this is a problem that just slowly gets worse over centuries, and which is a reason why people may just not get very energized by it.
Noor Siddiqui: Yeah. Boiling a frog. Well, amazing to get a chance to chat with you Robin and have an amazing weekend.
Robin Hanson: Nice to talk.
.svg){kind=small}
