Human Capital Memo

Topics: Demography, Economic growth, Population Pages: 4 (869 words) Published: April 7, 2014

SUBJECT: Should Slumping Fertility Rates in Developing Countries Spark Labor Worries?

A new study published in the Wall Street Journal shows that most of the developing countries are now facing low fertility rates, which was more familiar with developed countries before. Low fertility rates could raise labor worries such as shrinking young labor forces and increasing aging problems. However, this also can be seen as an opportunity. Since there is less children and more working force relatively, the situation would optimize the structure of labor market. Moreover, the children will be given more attention and education that they could be more skilled human capital in the future.

Reasons of Low Fertility Rates

The reasons behind the slumping birth rates in developing countries are complex to identify. Here are some possible causes:

Economic development

Demographic research shows that the economics development is tied to decreasing fertility rate in developing countries. Based on the data from the World Bank, GDP has grown by 38.78% from 2009 to 2012 in Thailand. Mexico also continuously increased its GDP by 31.58% in the last three years. The rapid economical growth also happened in a lot of developing countries that facing low fertility rates currently such as Brazil, India and Southeast Asia.

Urbanization development

Young working forces tend to go to big cities now. Although there are more high paying opportunities in big cities, the living cost also much higher than rural areas. The extreme expensive housing and education cost discouraged young migrators to have more children. Cultural impact

Enjoying own value and being independent had become a new fashion among young people in developed countries before. Nowadays, this fashion also influences the young generation in developing countries. The environmental and cultural impacts aggravate the fertility rate to fall continuously.

The Threat of Low Fertility Rates

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