India, China and the 4-2-1 problem

On 1 July, that is expected to change with India becoming the most populous country in the world – the population will touch 1,428.6 million. The population of China is estimated at 1,425.7 million. Other estimates suggest that the population of China is still higher than that of India. But these estimates also show that the population of India will soon overtake that of China.

So, sticking to the UN projection, let’s take a look at Chart 1, which shows the Indian and Chinese populations. In fact, until the early 1990s there was a considerable difference between the populations of the two countries. China’s population growth rate has slowed since the mid-1990s and is expected to shrink from 2023 onwards. This has not happened with India.

In this piece, we will explain how the Indian population has overtaken that of China; Why this may not be as much of a cause for concern as many are thinking, and finally, what this means for both India and China.

children per woman

Technically, babies per woman are referred to as the total fertility rate or the number of children born per woman during childbearing years. “The most obvious physiological constraint on this is the length of the fertile period (from menarche to menopause). The age of first menstruation has decreased from about 17 years in pre-industrial societies to less than 13 years in today’s Western world, while the age of menopause has Average starts hovered slightly above 50,” wrote Vaclav Smil in Numbers Dawn. t lie.

Take a look at Chart 2, which plots the metric of children per woman for both India and China.

By the 1960s, the average Chinese woman was producing more children than the average Indian woman. However, at the time, both Indian and Chinese couples were having too many children due to extreme poverty in both countries. Take the year 1970. World Bank data shows that China’s per capita income was $113.2 (GDP per capita in current US dollars). The per capita income of Indians was almost the same at $112. In 1970, the child per woman metric for India was 5.62 compared to 6.09 for China. So on an average there were 562 children per 100 Indian women. The same number was 609 for China.

As Hans Rosling, Ola Rosling and Anna Rosling write in Ronlund Factfulness: “Parents in extreme poverty need many children … [Not just] for child labor but also to produce extra children in case some die.” Furthermore, as Charlie Robertson writes in The Time-Traveling Economist: “When families have a lot of children, the child mothers – become the “savings” of the father. until they’re teenagers [they] Hopefully earning an income…eventually, they become your pension and can provide housing when you are old.” Therefore, when families are poor, they see children as future savings. Are.

The question is how did things turn so quickly for China.

one child policy?

In drawing room and social media discussions in India, it is widely believed that China was able to control its population growth through its one-child policy implemented since the 1980s. According to a recent news report from The Economist, this policy “allowed most Han Chinese couples to have one child (the rules were slightly more relaxed for ethnic minorities).”

At the same time, this policy was implemented in urban areas on a large scale. It is said that this allowed China to ensure that women had fewer children and, therefore, slowed down population growth. The problem is that the data doesn’t bear it out, at least not completely.

Let’s consider 1979, the year before the one child policy came into existence. The metric for children per woman stood at 2.75 for China, down from 6.09 in 1970. So, clearly, even before the policy was in place, Chinese women were having fewer children. What does this explain? Now, take a look at Chart 3, which shows the infant mortality rate, or the number of infant deaths per 1,000 live births of children under one year of age.

In 1960, the infant mortality rate in China was 197.5. In India it was 158.2. By 1970, China’s figure had dropped significantly to 78. For India it had dropped marginally to 141.7. In 1979, China’s infant mortality rate was 48.9 and India’s was 118.4. So, basically, fewer Chinese babies were dying before the age of one.

The authors of Factfulness explain, “Once parents see children alive … both men and women begin to dream of younger, well-educated children.”

Couples have fewer children because women get better education. “Data show that half of the increase in child survival in the world is because mothers can read and write.” It leads to “educated mothers” [deciding] have fewer children and more children live” and “more energy and time is invested in the education of each child.”

This is exactly what has happened in China. Data from a research paper titled Women’s Education in China: Past and Present, authored by Yujing Lu and Wei Du, show that in 1950, only 10% of Chinese women were literate. This had increased to 51.4% by 1980, the year the one child policy came into force. Compare this to India which had a female literacy rate of 9% at the time of independence. In 1981 it was 24.8%. This explains why by the 1980s, the number of babies per woman declined more rapidly in China than in India. In 1979, children per woman in China were 2.75 as against 4.81 in India.

The big point here is that a decline in the babies per woman metric eventually slows population growth and it was already falling before the one-child policy was implemented in China.

4-2-1 event

In 1989, a Hindi film titled Ram Lakhan was released. Actor Anil Kapoor played the character named Lakhan. And he sings a song where the words, for some random reason, as often happens in Hindi cinema, go: “Ek do ka chaar, chaar do ka ek, mera naam Lakhan hai”. Clearly, it doesn’t make any sense. The idiom four is two is one here. But the same cannot be said about the Chinese phenomenon of 4-2-1, which is a clear result of the one-child policy that the country followed from 1980 to 2015.

The number of births per woman continued to decline even after the policy and stood at 1.93 in 1991, below the replacement rate of 2.1. As Smail writes: “The replacement level of fertility is that which maintains the population at a stable level. It is approximately 2.1, with the additional fraction needed for girls who will not survive to fertile age.”

This implies that if an average of 100 women has 210 children and this continues, the population will eventually stabilize. The Chinese fertility rate continues to decline and is expected to be 1.19 in 2023. This means that most couples have only one child and that one child, once he grows up, will be responsible for two parents and four grandparents. , This is a 4-2-1 phenomenon and it is already having an effect.

China’s population is expected to decrease from 2023 onwards. In fact, the proportion of the working-age population, or the population aged 15 to 64, has already been shrinking for more than a decade. This can be seen in Chart 4.

The average age of a Chinese is expected to be 39 in 2023. This means that China is aging rapidly as its working-age population and its overall population are shrinking. As The Economist puts it: “Its people over 65 will outnumber those under 25 within about 15 years.” When it comes to India, the working age population is still on the rise. The median age is 28.2 and the population is expected to start shrinking only after 2065. In the Indian case, people over the age of 65 will be only under 25 in about 60 years.

All these will have an impact on future economic development.

As Ruchir Sharma writes in The 10 Rules of Successful Nations: “If more workers are entering the labor force, they boost the economy’s potential for growth, while fewer will reduce that potential … If For a country with a working-age population growth rate not above 2%, the country is unlikely to enjoy a long economic boom.”

The reason behind this is simple. As young people enter the workforce, find jobs, earn money and spend it, it drives consumer demand. When these people spend money, someone else earns that money. Over time, the increased demand causes entrepreneurs to start new enterprises, creating more jobs, fueling more demand, and hence, the virtuous cycle works.

China has done a great job over the years of promoting economic growth, lifting millions of people out of poverty. However, it is still a middle income country. Its per capita income in 2021 (constant 2015 US$) was $11,188. With its 4-2-1 population structure, China is, in theory, likely to fall into the middle-income trap as its economic growth slows in the coming years as the working-age population and the overall population contract. continues to do

India still has some headwinds on this front and needs that headwind as its per capita income in 2021 is projected to be $1,937. The median age of the population is still about a decade younger than in China. Also, the working-age population will remain lower than that of the older group for some time.

Furthermore, while the Indian fertility rate in 2023 is at 2, which is below the replacement rate of 2.1, the population will not begin to decline immediately due to the population momentum effect or the fact that the number of females will continue to enter. Given the high total fertility rate in the past, the fertile age will increase. These women would have more children, which would keep the population growing for a few decades. Eventually, the number of females entering fertile age will begin to decline, leading to a population decline.

In short, India still has an opportunity to capitalize on its demographic dividend. But to do this, youth need to be skilled and enough jobs need to be created, something that is not happening at present.

Bad Money is written by Vivek Kaul.