Links to Consider, 10/13/2024

Lorenzo Warby on declining fertility; David Friedman on same; David Deming on job churn; me on economic misconceptions

Lorenzo Warby writes,

Cities are profoundly antipathetic to large families, and have always been so. This is particularly true of apartment cities—suburbs are somewhat more amenable to large families, though not enough to make up for the urbanisation effect.

He goes on,

We are currently doing two things that historically led to collapses of civilisational orders:

1. becoming so urbanised that fertility collapses; and

2. systematically wearing away the topsoil that grows our food.

There are many plausible causes of the decline in fertility. I claim that nearly all of them are self-reversing. If population falls, cities will become less dense, and a drop in the productivity of agricultural land (which I doubt will take place in any event) will not matter so much.

David Friedman writes,

Being an unmarried adult woman used to be, in most contexts, low status, on the presumption that if she could have caught a man she would have. At present, in much of western society, that has reversed — being a married housewife is lower status than being an employed single woman.

In a follow-up post, Friedman speculates,

There are several ways in which technological change might make it less expensive to produce and rear children. One is artificial wombs.

That would be a big change.

Describing a paper he co-authored with Chris Ong and Larry Summers, David Deming writes,

STEM employment declined slightly between 2000 and 2012. At the time I argued that this was due to an increased emphasis on social interaction in professional work. I still think that’s true, but STEM has come back with a vengeance.

I tend to be skeptical of this sort of paper, for two reasons: job classification ambiguity; and cyclical effects.

Someone who hands you a sandwich over the counter at the deli in a grocery store is classified as being in retail. Someone who delivers your tray in a hospital is classified as being a health care worker.

You can hope that all of this classification ambiguity comes out in the wash, but I have my doubts. In the late 1980s, personal computers entered the office and became networked. Everybody worked differently, but titles did not change. I think that the official job classification system understated the rate of change.

The other issue is cyclical effects. When “animal spirits” were high in early 2000, everybody wanted software developers in order to add new products and features. When animal spirits are lower, as they were in 2012, firms were more cautious about new ventures and more interested in trying to squeeze more sales out of existing products and services. I’m not confident that one can easily identify trends when there are also cyclical effects.

Deming concludes, correctly in my opinion, that we are about to experience a lot of job churn due to AI. My guess is that the official statistics will understate the amount of churn.

In an essay on economic misconceptions, I write,

One natural misconception is that jobs are created by specific businesses. Hence, people complain about firms “sending jobs overseas.”

…Since American budget deficits contribute to our low national saving, a Congressman who blames a business for “sending jobs to China” should instead be looking in the mirror. It is the budget deficit that leads to the trade deficit, not any one individual business.

Ordinary intuition looks for individual villains. Economic reasoning looks for systemic causes.

substacks referenced above: @

A data-driven case that AI has already changed the U.S. labor market

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What Might Push Fertility Back Up?

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Explaining Falling Birth Rates

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Collapsing fertility is not so mysterious