Babies and the Macroeconomy by Claudia Goldin
https://www.nber.org/papers/w33311
Abstract
Fertility levels have greatly decreased in virtually every nation in the world, but the timing of the decline has differed even among developed countries. In Europe, Asia, and North America, total fertility rates of some nations dipped below the magic replacement figure of 2.1 as early as the 1970s. But in other nations, fertility rates remained substantial until the 1990s but plummeted subsequently. This paper addresses why some countries in Europe and Asia with moderate fertility levels in 1980s, have become the “lowest-low” nations today (total fertility rates of less than 1.3), whereas those that decreased earlier have not. Also addressed is why the crossover point for the two groups of nations was around the 1980s and 1990s. An important factor that distinguishes the two groups is their economic growth in the 1960s and 1970s. Countries with “lowest low” fertility rates today experienced rapid growth in GNP per capita after a long period of stagnation or decline. They were catapulted into modernity, but the beliefs, values, and traditions of their citizens changed more slowly. Thus, swift economic change may lead to both generational and gendered conflicts that result in a rapid decrease in the total fertility rate.
Inequality hasn’t risen. Here’s why it feels like it has
https://www.ft.com/content/b325af8f-1864-448e-9b3e-bd1a18333a08
So we have seen no increase in aggregate inequality. The story for the lowest-paid is unambiguously good but for the bulk of people who sit somewhere in the middle, it could be argued that the two divergent trends combine for a decidedly uncomfortable situation.
If the middle class looks upwards, the rich are pulling further away. A top-tier life feels further out of reach than ever. But look down, and the floor is coming up fast. This simultaneous rise of resentment and precarity is a dangerous cocktail, and could certainly have fed into recent political undercurrents.
Things have to get worse to get better: Voters can’t be sold on change until their nation is in acute trouble
https://www.ft.com/content/c9a8d92a-0c1d-424e-83be-c3469c370c19
Janan Ganesh notes:
Things had to get worse to get better. Understand this, and you understand much about contemporary Europe. Britain and Germany are stuck with flawed economic models because, in the end, things aren’t so bad there. The status quo is uncomfortable, but not as uncomfortable as the upfront costs of change. And so the merest cut to pensioner benefits or inheritance tax exemptions incurs public wrath. Now contrast this with southern Europe. Much of the Mediterranean has reformed its way into economic growth (Spain), fiscal health (Greece) and high employment (Portugal) precisely because of the brush with doom that was the Eurozone crisis circa 2010. Essentialist arguments about the “character” of the south, about its work ethic and so on, turned out to be nonsense. Forced to change, it did.