Transcript Population - Questrom Publish

SP 864 Managing Risk
Topic: Population & Migration
Spring 2007
Professor Jim Post
March 6, 2007
Fusing the ART, SCIENCE, and TECHNOLOGY of Business.
Population and Migration
 Population is both cause and effect
 Migration is both an effect, and a cause
 Population is shaping and driving three major
social, economic, political issues in U.S.A.
 Aging of the population
 Immigration – economics and politics
 Social Security, Medicare, pensions
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Carrying Capacity
 Population and resource use are related
 Since Thomas Malthus, there is a fear that there
are limits to growth (Donella Meadows)
 TM: food supply grows arithmetically, while population
grows geometrically; hence, crisis.
 The Earth has finite resources – therefore, limits
to the number of inhabitants it can support. This
is the idea of “Carrying Capacity.”
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Grains rise but no respite for hungry
In 2004, global grain production broke 2 billion tons for the first time in history, marking a 9-percent
increase from the 2003 level. Also in 2004, according to the U.N. Food and Agriculture Organization,
the number of hungry people around the world increased for the first time since 1970. Starvation
now kills more than 5 million children each year.
The biggest factor behind this record grain production in 2004 was an increase in average yields: with
the same amount of hectares for planting, farmers were able to harvest more crops. However, most
people go hungry not because of a global food shortage but because they are too poor to buy
food or to obtain the land, water, and other resources needed to produce it.
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National Wealth
Rank Order …
GDP per capita
J. Post 2007
Australia
Austria
Brazil
Canada
Denmark
Luxembourg
Maldives
Russia
Sweden
United States
Zambia
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Population is the denominator
 GDP divided by number of people in a nation
 Per capita GDP is the best gross indicator of
prosperity and well-being
 High GDP / high population = ?
 Medium GDP /small population = ?
 Low GDP / high population = ?
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The American Exception –
Eberstadt’s thesis
 UNDP points to four major trends to 2050
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Global aging …
Decline of the West
The eclipse of Russia
American exceptionalism
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The Economics of Aging –
According toThe Economist
Young
Rich
Population
Australia
New Zealand
Ireland
USA
Old
Japan
Germany
Wealth
China
Russia
Poor
Developing
Nations
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Eastern Europe
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Population Issues – US 2007
 Aging
 health care costs
 Males v. females
 Pensions – social welfare
 Who pays
 How much
 When do benefits begin?
 Think of US auto industry today
 … GM, Ford’s health care and pension costs
 Three variables: contributions … benefits … timing
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Some responses


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Organized elders … “The Grey Panthers”
Divisive politics … haves, have nots
Pressures on employers
New markets … new methods
 “Older people are an industry here.” (Florida)
 New kinds of jobs --“bridge jobs,” part time, etc.
 Structural facts: Ratio 5:1 versus 3:1
 “The contract between the generations needs renegotiating, not
ditching.” (The Economist)
 The Swedish model … (next slide)
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The Swedish Model
 WSJ 3-5-07
 Sweden’s incentive system is working …
 Pension payouts are tied to salaries, life
expectancy, and health of the economy
 Swedes are retiring later … formula averts
some political friction
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World Population Growth
Year
Population 000
•
Year
Population 000
•
2005
6 464 750
•
2010
6 842 923
•
2015
7 219 431
•
2020
7 577 889
•
2025
7 905 239
•
2030
8 199 104
1950
2 519 470
1955
2 757 399
1960
3 023 812
1965
3 337 974
1970
3 696 588
1975
4 073 740
1980
4 442 295
1985
4 843 947
•
2035
8 463 265
1990
5 279 519
•
2040
8 701 319
1995
5 692 353
•
2045
8 907 417
2000
6 085 572
•
2050
9 075 903
MBA
Peak
Retire
Source: Population Division of the Department of Economic and Social Affairs of the
United Nations Secretariat, World Population Prospects: The 2004 Revision and
Your birth
World Urbanization Prospects: The 2003 Revision, http://esa.un.org/unpp,
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World Population -Density
Year
Population density
1950
19
1960
22
1970
27
1980
33
1985
36
1990
39
1995
42
2000
45
2005
48
2010
50
2015
53
2020
56
2025
58
2030
60
2035
62
2040
64
2045
Your birth
Birth
MBA
Peak
65
2050
67
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Retire
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Migration (a natural phenomenon)
 USA: A Nation of Immigrants?
 David Kennedy’s Thesis:
 Why did people migrate to US in the past?
 Why do they do so today?
 What are the consequences for them, and for
the nation?
 The absorption thesis: small numbers,
diversity, and economic vitality.
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Migration …
 Greatest migration is rural to urban…true from
China to Europe to the U.S.
 Migration is a “push-pull” dynamic –
 attract and connect
 Melting pot myth
 Skilled v. unskilled labor
 Kennedy’s call for tolerance etc.
 “Chicano Quebec” in SW USA
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Borjas article
 “It’s about distribution stupid!”
 Who wins, who loses?
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Malthus lives
 Does population growth drive poverty?
or
 Does poverty drive population growth?
 “High birth rates are as much an effect of
poverty as they are a cause.” The Economist “A
Populous Planet” (1994)
 TM: food supply grows arithmetically, while
population grows geometrically; hence, crisis.
J. Post 2007
Fusing the ART, SCIENCE, and TECHNOLOGY of Business.
Grains rise but no respite for hungry
In 2004, global grain production broke 2 billion tons for the first time in history, marking a 9-percent
increase from the 2003 level. Also in 2004, according to the U.N. Food and Agriculture Organization,
the number of hungry people around the world increased for the first time since 1970. Starvation
now kills more than 5 million children each year.
The biggest factor behind this record grain production in 2004 was an increase in average yields: with
the same amount of hectares for planting, farmers were able to harvest more crops. However, most
people go hungry not because of a global food shortage but because they are too poor to buy
food or to obtain the land, water, and other resources needed to produce it.
J. Post 2007
Fusing the ART, SCIENCE, and TECHNOLOGY of Business.
Coal use leads to health costs
The rapid growth in coal use in China and India, where pollution controls are minimal, is adding to local
and long-distance pollution. More than 80 percent of Chinese cities in a recent World Bank survey had
sulfur dioxide or nitrogen dioxide emissions above the World Health Organization's threshold.
Scientists have concluded that growing up in a city with polluted air is about as harmful to a person's
health as growing up with a parent who smokes. Although air pollution is concentrated in cities, it can
move well beyond them: for example, acidic lakes in Scandinavia have been linked to pollution from
factories in the United States. The World Bank projected that on average 1.8 million people would die
prematurely each year between 2001 and 2020 because of air pollution.
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Population and health
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HIV/AIDS spreads
The number of people living with HIV/AIDS rose to 42 million at the end of 2002. Five million people became
infected with HIV in 2002, and another 3.1 million died of AIDS-related causes.
For the first time, women account for half the people living with HIV/AIDS. Heterosexual transmission,
particularly in Africa and the Caribbean, is the primary cause of infection among women, who are two to four
times more likely than men to become infected during unprotected sex.
Source: HIV/AIDS Pandemic Spreads Further , Vital Signs 2003, pp. 68-69.
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AIDs
Nearly 90 percent of AIDS-related fatalities occur among people of working age, making it the leading cause
of death worldwide for people ages 15-49. The seven most seriously AIDS-affected countries, all in
sub-Saharan Africa, now lose as much as 10-18 percent of their working-age adults ever five years,
mainly to this disease. (Industrial countries, in comparison, typically lose about 1 percent of this age group
to all death in five years.) Largely because of this rising pandemic, death rates have actually reversed
their decline in more than 30 countries.
The International Labour Organization predicts that in the absence of treatment, as many as 74 million
workers worldwide could die from AIDS-related causes by 2015. Between 1992 and 2002, the economy of
South Africa, home to the largest infected population, lost an estimated $7 billion annually due to
declines in its labor force.
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Millenium goals
According to the World Bank, less than one-fifth of all countries are currently on target to reduce child and maternal mortality
and provide access to water and sanitation, while even fewer are on course to contain HIV, malaria, and other major diseases
slated for reduction under the United Nations' Millennium Development Goals (MDGs). While some countries and regions have
made significant gains in poverty reduction and the world as a whole is generally believed to be on track for meeting the MDG
targets set for poverty reduction and clean drinking water, the situation is less hopeful for the other goals and targets, including
those on hunger, primary education, child mortality, and access to sanitation.
The World Health Organization estimates that to sustain a public health system, a minimum of $30-40 per person is
necessary, but in the world's poorest countries, where GPD per capita is typically in the low hundreds, even this rather
modest level of spending will be impossible without outside investment. In 2003, donor countries gave $68 billion in official
development assistance, or just 0.25 percent of their gross national incomes, far short of the 0.7 percent of national income
goal that was initially adopted at the 1970 U.N. andJ.broadly
reaffirmed in 2002 at major international conferences.
Post 2007
Only five countries have met the 0.7 percent target soGeneral Assembly far: Denmark,
Luxembourg,
the Netherlands,
Norway,
and Sw
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and TECHNOLOGY
of Business.
Millenium goals - progress
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Rich-poor gap still rising
The global economy has grown sevenfold since 1950. Meanwhile, the disparity in per capita
gross domestic product between the 20 richest and 20 poorest nations more than doubled
between 1960 and 1995.
Of all high-income nations, the United States has the most unequal distribution of income, with
over 30 percent of income in the hands of the richest 10 percent and only 1.8 percent going to
the poorest 10 percent.
Source: Rich-Poor Gap Growing, Vital Signs 2003, pp. 88-89.
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Wrap Up
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Facts
Values
Biases
Is there an optimal number for a nation, a
region, the globe? (carrying capacity)
 Does education change the relationship
between poverty and population?
 More is less; less is more.
J. Post 2007
Fusing the ART, SCIENCE, and TECHNOLOGY of Business.