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Demography - declining birth rates / falling population


Sweet
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The birth rates in the West are about 1.5 - 1.6.  The rest of the world is following.

 

If this results into a declining population, which is already the case in some developed countries, it could become a major secular headwind.

 

Is it a predicator of future economic performance?  Should investors consider it?  

 

 

Edited by Sweet
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Great trend to consider long term.

 

In the declining population scenario housing is particularly at risk outside of urban centres. Just look at Japan https://www.vice.com/en/article/88nxkx/japan-abandoned-homes-akiya.

 

On the other hand, there is good reason to believe life expectancy could dramatically increase in the years ahead which would soften the effect of declining birthrates (https://www.youtube.com/watch?v=nnnXVUWlTkI).

 

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34 minutes ago, maplevalue said:

Great trend to consider long term.

 

In the declining population scenario housing is particularly at risk outside of urban centres. Just look at Japan https://www.vice.com/en/article/88nxkx/japan-abandoned-homes-akiya.

 

On the other hand, there is good reason to believe life expectancy could dramatically increase in the years ahead which would soften the effect of declining birthrates (https://www.youtube.com/watch?v=nnnXVUWlTkI).

 

You dont have to go to Japan- same is true in many rural areas in Europe. You can buy houses there dirt cheap.

The village I grew up with had population of 1200 when I was born and has below 900 now. The same thing happens in many places, countries in Europe and even in the US. This is due to compounding effect of demographics and people (like me) moving away.

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On 6/11/2022 at 7:43 AM, Spekulatius said:

You dont have to go to Japan- same is true in many rural areas in Europe. You can buy houses there dirt cheap.

The village I grew up with had population of 1200 when I was born and has below 900 now. The same thing happens in many places, countries in Europe and even in the US. This is due to compounding effect of demographics and people (like me) moving away.

 

I wonder if there will be a tipping point on stuff like that though? A row house in the biggest Canadian cities goes for $1MM, whereas in small towns a detached house is 1/10th of that.

 

Once everyone has Fibre internet it seems like the career advantage of the cities might be smaller, and some people might think saving 10x their salary on house prices is a good deal.

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59 minutes ago, bizaro86 said:

 

I wonder if there will be a tipping point on stuff like that though? A row house in the biggest Canadian cities goes for $1MM, whereas in small towns a detached house is 1/10th of that.

 

Once everyone has Fibre internet it seems like the career advantage of the cities might be smaller, and some people might think saving 10x their salary on house prices is a good deal.

I would sure think so but the reality it just hasn't happened yet despite making a lot of sense for years. I know in my case, despite having a job that is very easy to do remotely, there are still requirements about in office work that make moving to a small town not practical.  I think too, that kind of lifestyle is a huge change and while there will be some who will go for it, most prefer the amenities of the larger centers.

 

Regarding the post in general, I think it is indeed a huge problem.  However, there are mitigating factors as well.  Countries such as the US and Canada are going to do better than others due to the larger amount of immigration we have.  There is also going to be a shift in retirement age to later, there will just have to be.  I don't know exactly how that all plays out but the market will find a way to push aging workers back in.  Could be via inflation hitting the value of government benefits, stock / real estate crash hurting those who have saved, pension defaults, there are many possibilities.   At any rate, in this day and age, while 65 is a great retirement age and is something I aspire to (or earlier), I also know people who have worked to 80.  With white collar work retiring at 65 doesn't make as much as sense as it used to.  Even less so if there is a shortage of workers.

Edited by no_free_lunch
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If it's a problem, we will selectively allow more immigrants. Poor places get poorer from brain drain. 

 

It could get worse though considering 20% of gen z identifies are various genders that aren't as likely to

produce offspring. 

 

 

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On 5/20/2022 at 6:27 PM, Blugolds11 said:

 

Assuming investors gender...Oh here we go.....

 

David Allsopp ar Twitter: "Reminder that the "triggered feminist" meme,  much loved by internet arseholes everywhere, comes from a video where the  lady is actually making pretty calm, rational arguments in a

 

2 hours ago, flesh said:

If it's a problem, we will selectively allow more immigrants. Poor places get poorer from brain drain. 

 

It could get worse though considering 20% of gen z identifies are various genders that aren't as likely to

produce offspring. 

 

 


I just learned over the weekend what a Fury was. My son has a couple that go to his school. The demographics looking forward look dismal. 

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Posted (edited)
2 hours ago, flesh said:

If it's a problem, we will selectively allow more immigrants. Poor places get poorer from brain drain. 

 

It could get worse though considering 20% of gen z identifies are various genders that aren't as likely to

produce offspring. 

 

 


Worrying trend, not only for demographics, but in terms of being able to have a conservation with people around facts.

 

Factually there is no basis for this gender nonsense.  An ideology riddled with contradictions and refuted by basic observable biology.

Edited by Sweet
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This is a topic I'm very interested in. Musk has also been vocal about it recently. In the US at least, based everything I've read, we're probably still 20-30 years out from it becoming very noticable. Immigration is still high enough to keep growth positive albeit not by much. 

 

I believe the labor shortages we're seeing now are a glimpse of what we can expect in the future. I won't be surprised to see these problems temporarily wane as the pandemic fades and the Fed purposely pushes unemployment up. But it is a FACT that the population is aging which will continue to create labor shortages at a gradually increasing rate. 

 

Long-term (say 50+ years out), declining population growth seems like an economic time bomb. As mentioned by others, just go to towns in rural areas that have lost people over the years. What do you find? Loads of empty houses, buildings and storefronts (and therefore cheap real estate). Imagine the strain this will put on retirement plans, entitlements and local government revenues (which fund infrastructure, etc.). It looks like a very tough picture. I think this is why the Chinese leadership have basically panicked with respect to their family planning policies. 

 

Everything I've read about countries that have tried to incentivize more births has concluded these polices don't work. The impact is at the margins. 

 

As a parent with two kids under 6, I can see why this is an unstoppable trend particularly in advanced economies. My kids are great. I'm lucky they are healthy. But raising kids is extremely time consuming and expensive. Child bearing has gone from being a necessity in an agrarian society to what amounts to an economic burden in an advanced economy. For women in particular, having kids is not a recipe for career advancement. It's just a brutal reality. 

 

The one upside to peak population is it probably helps some of the environment challenges the world faces. 

 

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As a father of three, if society wants people to have more children, it should make it easier.  There should be high quality public schools for starters.  NYC spends $40K per pupil per year and schools are awful.   Similarly, we need good trade schools and good public universities that are are cheap.  Not like University of Maryland today at $50K per annum.  Also, change colleges/universities as well as school calendar to five weeks vacation and 47 weeks of school.  Very big problem of what to do with kids during the summer and winter breaks.  Also, university should not be 12 week autumn and 12 week spring semester.  Do 4 12 week quarters per year, and condense college to two rather than four years.   Cut welfare and social programs, in many areas of the country, like NYC, a single mother needs to make $150K per annum before she makes more money working rather than sitting on welfare.  The higher the taxes to support the welfare state, the fewer kids normal taxpayers will have.

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"a single mother needs to make $150K per annum before she makes more money working rather than sitting on welfare"

 

Elaborate, this is news/surprising to me. 

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18 minutes ago, flesh said:

"a single mother needs to make $150K per annum before she makes more money working rather than sitting on welfare"

 

Elaborate, this is news/surprising to me. 

There was  an article in the Economist about a decade or so ago based on a study done by a think tank.  Basically, if you do not work you get: free housing, free healthcare - Medicaid, free food, free/subsidized internet + utilities, welfare.   Add it all up.  I am sure some basic googling will get you there.  Also, if you work you need to pay for childcare.

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23 hours ago, Dinar said:

There was  an article in the Economist about a decade or so ago based on a study done by a think tank.  Basically, if you do not work you get: free housing, free healthcare - Medicaid, free food, free/subsidized internet + utilities, welfare.   Add it all up.  I am sure some basic googling will get you there.  Also, if you work you need to pay for childcare.

 

Yea. I remember seeing a case study or something talking about "cliffs" that provide  disincentive for you to try to better your economic position also 7-10 years ago. 

 

It focused on single mothers in Pennsylvania. IIRC, they would have to be paid $75k+ to have an economic incentive that exceeded their current welfare benefits (post-tax) and I don't think it considered the cost of childcare if the mothers went to work. 

 

How many single mothers are going to be qualified enough to land a job that is the median INCOME for two-earner families? 

 

The whole point of the case study was to point out various "cliffs" that provide disincentive to get off welfare because the moment you earn $1k more you lose like $5-10k worth of benefits. 

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