Are India's Demographics Better Than China's?

The Economist this week leads with a story that India's demographics are better than China's for the foreseeable future and therefore investors ought to line up their money accordingly. The Economist is one of the fairest news sources that I know, but this article pushes that envelope. 

Several factors weigh in India’s favour. The first is demography. Indians are young (see chart 1). “An ageing world needs workers; a young country has workers,” says Mr Nilekani [of the investment banking firm Morgan Stanley]. Previous Asian booms have been powered by a surge in the working-age population. Now it is India’s turn. The proportion of Indians aged under 15 or over 64 has declined from 69% in 1995 to 56% this year, says the UN. India’s working-age population will increase by 136m by 2020; China’s will grow by a mere 23m, says Morgan Stanley.

The first problem with the article is that the demographic data, drawn originally from the United Nations Population Division, have been interpreted not by demographers, but by investment bankers, who are likely to have a vested (if not invested) interest in their interpretation. It is true that fertility is declining in India and that the age structure is more favorable to economic development than it used to be. But that decline in fertility is MUCH slower than in China (which almost certainly would have had a rapid fertility decline even without the one-child policy), and so the demographic dividend is not going to be anything like that experienced by China.


The second problem relates to the interpretation of the demographic dividend. The Economist seems to think that any improvement in the ratio of workers to non-workers will produce a demographic dividend. Perhaps, but a very modest demographic dividend, as we can project for India, will likely produce very modest economic gains for the average Indian (three-fourths of whom currently live on less than $2/day). And even the Economist has to admit that improving the daily life of Indians is not going to be easy or cheap:

Indian businesses face several bottlenecks on the uneven road to growth. The most obvious of these bottlenecks is lousy infrastructure. Indian roads are awful. Potholes gape; traffic lights don’t work. Rural roads are largely unpaved; in cities traffic often snarls to a halt. Cyrus Guzder, who runs a distribution business, complains that long-distance trucks average only about 20kph (12mph). Crossing the border between two Indian states can be more troublesome than crossing an international boundary. Between Kolkata and Mumbai (a distance of 2,000km), a truck must negotiate a couple of dozen checkpoints. Delays and shakedowns by grasping officials add 30% to the cost of road freight, estimates Mr Guzder.

The other worrying bottleneck is a shortage of skills. The workforce may be young and growing, but 40% are illiterate and another 40% failed to complete school. The Boston Consulting Group sees a shortfall of 200,000 engineers, 400,000 other graduates and 150,000 vocationally trained workers in the coming years. Meanwhile, there are 62m surplus workers in agriculture, most of them barely skilled.

And the third problem with the overall analysis is that the demographic dividend is a temporary phenomenon--an artifact of the age transition. If you use it well to invest in the future, you can string out its impact, as China seems now to be doing by investing its money in other developing nations, on top of owning much of the debt of the richer countries. But the bigger the dividend, the more there will be to invest in the future, and India has a lot of catching up to do precisely because its fertility has been declining slowly, rather than rapidly.

What is the Differential Undercount in the Census of Marine Life?

The first ever census of marine life has recently been completed, more than a decade after it was first conceptualized, and after the expenditure of $600 million and the participation of nearly 3,000 scientists. 

With sound, satellites, and electronics, some- times carried by marine life itself, the Census tracking of thousands of animals mapped migratory routes of scores of species and charted their meeting places and blue highways across the interconnected ocean. The tracking measured animals’ surroundings as they swam and dove and revealed where they succeed and where they die. The Census found temperature zones favored by animals and saw the immigration into new conditions such as melting ice.

The results remind us that we are not that dramatically different from other animals in many respects. Two things stand out among the findings. The first is that marine species have migrated all over the global waterways, and have populated all corners of the sea, just as humans have spread around to find the habitable portions of land. Indeed, some species are very nomadic:

The census also highlighted marine life that makes commutes that put a suburban worker's daily grind to shame. Before the census started, the migration of the Pacific bluefin tuna had not been monitored much. But by tagging a 33-pound tuna, scientists found that it crossed the Pacific three times in just 600 days, according to Stanford University's Barbara Block. A different species of tuna, the Atlantic bluefin, migrates about 3,700 miles between North America and Europe. Humpback whales do a nearly 5,000 mile north-south migration.

The second really interesting finding has to do with the genetic similarity of marine life:

The census found another more basic connection in the genetic blueprint of life. Just as chimps and humans share more than 95 percent of their DNA, the species of the oceans have most of their DNA in common, too. Among fish in general, the snippets of genetic code that scientists have analyzed suggest only about a 2 to 15 percent difference, said Dirk Steinke, lead scientist for marine barcoding at the University of Guelph in Canada.

As is true with censuses of humans, not every marine creature could be counted:

After all its work, the Census still could not reli- ably estimate the total number of species, the kinds of life, known and unknown, in the ocean. 

But that is hardly a criticism of an effort that has generated so much new information:

Now anyone can see the distribution of a species by entering its name at iobis.org, a Web site that accesses the names and “addresses” of species compiled in the Census’s global marine life database.

Calorie Restriction: Prescription for a Long Life or a Short One?

The idea that restricting your calories will lengthen your life is an increasingly popular one--unless of course you are among the one billion people who go to bed hungry every night and can look forward to a shortened life expectancy as a consequence. The research on caloric restriction is taking place in the richer countries with high life expectancy, and so ignores the fact that for most of human history people were struggling to increase their caloric intake. Indeed, the evidence suggests that improved diets (more calories) helped Europeans to lead the way to lower mortality because better nutrition increases the body's chances of fending off disease. However, the nutrition transition, first put forward by Barry Popkin of UNC Chapel Hill, suggest that as societies modernize, their diet and exercise patterns change and we become prone to obesity as a result of, among other things, excessive caloric intake:

Citizens of the world's richest countries are getting fatter and fatter and the United States is leading the charge, an organization of leading economies said Thursday in its first ever obesity forecast.

Three out of four Americans will be overweight or obese by 2020, and disease rates and health care spending will balloon, unless governments, individuals and industry cooperate on a comprehensive strategy to combat the epidemic, the study by the Organization for Economic Cooperation and Development said.

The Paris-based organization, which brings together 33 of the world's leading economies, is better known for forecasting deficit and employment levels than for measuring waistlines. But the economic cost of excess weight — in health care, and in lives cut short and resources wasted — is a growing concern for many governments.

In my view, this is where the value of caloric restriction comes in. Rather than concerning ourselves with a few months of extra life that might be possible with severe caloric restriction (and never mind the potentially diminished quality of life that might accompany that lifestyle), we should be more concerned with everyday limitation of calories and with everyday exercise as a way of trying to keep evolution and modernization in balance.

Waiting for Superman, or Should it be Superwoman?

The movie "Waiting for Superman" has stirred up the debate about how to improve the quality of education. Almost completely lost in the discussion has been the impact of the changing demographics of both teachers and students on the American educational system. For several decades in the twentieth century--up until about the 1970s--school districts were able to hire the best and the brightest among women because there were relatively few other really attractive career options (one of the other being nursing--which as also been dramatically affected by changing demographics). As labor force discrimination eased (even if we still have a long way to go), many of those women who previously would have become teachers have gone on to be physicians, lawyers, college professors, and CEOs. But, because we had it in our collective minds that we could get good teachers without having to pay them much, the public has not stepped up to change the system in order to recruit those highest quality people in the face of stiff competition from other jobs.


At quite literally the same time, the demographics of the "public" have changed. Beginning with the loosening in the mid-1960s of the restrictive immigration laws, we have witnessed an increasing fraction of students who are children of immigrants and whose parents are not in a good position to help their children with school because they themselves do not know much about the US educational system and are unaware of how important the role of parents is in the educational success of children. This is compounded by the increasing family and household diversity which has raised the fraction of young Americans who are not growing up in a two-parent family and for that reason may have a diminished support system for their schooling.


Unless we own up to the demographically more complex society that now exists--a complexity that almost certainly raises the overall cost of education--we stand no chance anytime soon of improving our educational system.

The Recession Has Not Improved Job Discrimination Against Women

The U.S. Government Accounting Office (GAO) has analyzed the American Community Survey data for 2000 through 2007 to see if there was any noticeable effect from the recession on gender inequity in the labor market. Several conclusions emerge from this analysis: (1) women continue to be paid less than men for doing the same work, but the recession did not seem to affect this one way or the other; (2) women continue to be less likely than men to be in management positions than men, but the recession did not seem to affect this one or another; (3) children are "to blame" for some, but not most, of the disadvantage of women in the labor force, but the recession did not seem to affect this one way or the other; and (4) the recession hit men harder than women, so the income of women in households has been disproportionately important during the recession. It seems obvious that the recession hit men harder than women precisely because they make more money than women. Thus, the discrimination (largely by men) against women in the labor force turns out to lead to an implicit discrimination (probably also by men) against men when it comes time for layoffs.