The Shape of the Future: No More Population Pyramid

As a student of child labor and child welfare programs, I have long thought that most of us underestimate the dramatic changes associated with ending child labor. Since most of us in the U.S. grew up in a country that effectively banned child labor, we think it is normal that children go to school, play, and do their homework. It is tough to realize that this now ordinary pattern really wasn't the rule in the U.S. until the Progressive Era. In poor regions of the world like Africa and South America, this pattern has still not completely taken hold.

One of the most interesting articles that help illustrate the breathtaking changes caused by child labor laws crossed my desk this week. John Parker, the environmental editor of one of my favorite magazines, The Economist, wrote  "The World Reshaped: The End of the Population Pyramid," back in November 2014. The most interesting part of this article, for me, is how the famous population pyramid is predicted to change over the next half century. See, below: 

In Parker's view, the declining fertility rate is largely responsible for the changes we see in the population pyramid between 1970 and 2015. The column shape of the pyramid that scholars anticipate for 2060 is largely the result of improved longevity in his view. 

I have been fascinated with this chart all week. I think that Parker is misinterpreting this information because, like most social scientists, he does not appreciate the impact of child labor laws on fertility, increased intellectual capital, and wealth accumulation. In the first place, child labor laws are unlikely to change and thus we will never see increases in fertility rates again. (Unless, of course, the Muslims take over completely and drag us into their dysfunctional world view.) In fact, I would predict that the fertility rate will eventually decrease everywhere as child labor laws are enacted and fully enforced. If parents cannot benefit from their children's labor, then we are taking away what has traditionally been one of the most important reasons to have children in the first place. 

I do, of course, anticipate that improvements in medicine will result in longer life spans. It makes sense to me that the column will continue to get higher for that reason. Nevertheless, I also expect that the base of the column -- the number of children in the world -- will continue to decrease until major (even dramatic) efforts are made to encourage increased fertility rates. 

I am still thinking through the implications of this new column shaped population pyramid. At the very least, it give us a more accurate image of what the world will look like for many generations to come. Those of us alive today will be among the first to think through the predictable trials and tribulations of this brave new world. 

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New Study Shows Microlending Increases Child Labor and Fails to Reduce Poverty

I ran across this interesting article in the Journal of Philanthropy. It is worth reprinting here, in full. I have always through that microlending programs would have the unintended consequence of encouraging child labor. I'm glad to see that there is finally some evidence to support this fact. In my view, the only real solution to poverty is stopping child labor. Simple as that. The article is worth reading in greater detail, below:

Dr. Drew painting en plein air at
San Clemente beach in San Clemente, CA. 

New studies suggesting that microlending programs fail to raise borrowers' income levels have reignited the debate over the effectiveness of the model in alleviating poverty, the Wall Street Journal reports.

Under the microfinance model, very small loans are made to help the poor start businesses and boost their incomes. As borrowers repay the principle and interest on those loans, the growing pool of money is lent out to other poor people. But independent studies published in the January issue of American Economic Journal: Applied Economics that examined microloan proigrams in Ethiopia, India, Mexico, Mongolia, Morocco, and Bosnia and Herzegovina found that while the loans did give borrowers better access to credit, they tended not to increase borrowers' incomes or consumption. Nor did the studies find much evidence of significant social dividends, such as empowering women or improving educational opportunities for their children. Indeed, one study cited evidence suggesting that microloans encouraged families to pull their children out of school to work in the family business.

"This is kind of a defining moment," said Abhijit Banerjee, an economics professor at the Massachusetts Institute of Technology who co-wrote the study on microlending in India, during a debate at a World Bank conference in February. "The big question that we would like to answer is: [W]hat is the right product [for the poor] to have? What is missing?"

Defenders of microlending argue that the model was never expected to end poverty quickly but rather to give more choices to poor people who had been largely ignored by banks and other lenders. Alex Counts, president and CEO of the Grameen Foundation, an international arm of Grameen Bank, which pioneered microlending at scale in Bangladesh, said even the most negative reports show that up to 10 percent of microloan recipients see a big rise in income, while the rest typically do not experience a decline. And Counts suspects other microfinance programs, especially those in Bangladesh, which were not surveyed by the latest studies, would show a higher success rate. Still, he said, the reports should be "a call to action for researchers, practitioners, and policy makers to roll up their sleeves and work collaboratively to develop successive waves of better credit products for the poor."

"The theme of financial inclusion does not have the same shine as it once had, and this kind of study certainly contributes to that," said Vikram Akula, the founder of SKS Microfinance, one of India’s largest microlenders, who left SKS in 2011 and recently launched a for-profit financing firm that targets people without bank accounts. "It is part of a broader narrative that microfinance isn't a panacea, which we all knew."

Eric Bellman. "Calls Grow for a New Microloans Model." Wall Street Journal 03/17/2015.