Is Education the Work-Around for Low Fertility?

For the past several years, Wolfgang Lutz and his research colleagues at both IIASA's World Population Program in Austria and the Vienna Institute for Demography have been pushing the idea that we cannot understand our demographic future without taking education into account. I was easy to convince of this, and I was very pleased to see that this week's Economist has also bought into the idea.

In a recent study Erich Striessnig and Wolfgang Lutz, of the Vienna University of Economics and Business and the International Institute for Applied Systems Analysis in Laxenburg, Austria, argue that in predicting dependency ratios (the number of children and pensioners compared with people of working age), education should also be taken into account. And that makes optimal rates much lower than previously thought.

Not everyone of working age contributes equally to supporting the dependent population. Better-educated people are more productive and healthier, retire later and live longer. Education levels in most places have been rising and are likely to continue to do so. Using projections by age, sex and level of education for 195 countries, the demographers conclude that the highest welfare would follow from long-term fertility rates of 1.5-1.8. That excludes the effects of migration: for countries with many immigrants, the figure would be lower.

Educating more people to a higher level will be expensive, both because of the direct costs and because the better-educated start work later. But they will contribute more to the economy throughout their working lives and retire later, so the investment will pay off. Moreover, fewer people will help limit future climate change.

The Economist notes that this won't be an easy sell, however, no matter how hopeful it might sound for the future.