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Family, Population, and Sustainable Development

Dr. Maria Sophia Aguirre Department of Business and Economics

The Catholic University of America

International Congress on Family and Society Universitat Internacional de Catalunya (UIC)

May 15-17, 2008

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Is the Family Relevant for Economic Development?

§  Some would argue that the family is key because:

Ø The earth is limited Ø The family is a hostile place for women and children Ø Large families threaten countries’ stability

§  Others argue that the family is key because:

Ø Healthy families are needed for the economy to fulfill its purpose. Therefore it is a reference point for policy

Ø Growth of the population does not equal poverty Ø The aging population “trap” threatens sustainable

economic growth and development

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How Does the Family Fit in the Economy?

Basic Activities Means Used Role of the Family

Purpose

Production Resources Human Capital Basic Needs

Exchange Market Human, Moral, Social Capital

Profit

Consumption Optimization and Distribution

Appropriate distribution

Wellbeing (welfare)

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Ø There is a positive correlation between ü human capital, infrastructure and economic growth ü healthy institutions and economic development ü health and income per capita

Ø These positive correlations reflect an essential causal link running from human capital to ü healthy institutions (social capital) ü infrastructure and technology

Ø Life expectancy is a significant predictor of economic growth

We know from economic analysis that in economic development

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Life Expectancy at Birth

Source: Human Development Report, 2007, Table 1

Sub-Saharan Africa

South Asia

Arab States

Central, Eastern Europe

& CIS

East Asia & Pacif ic

Latin America & Caribbean

High Income OECD

0

20

40

60

80

10029.8 years

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Socioeconomic Relevance Ø Children develop best within a family that is functional, i.e., with their

biological parents in a stable marriage

ü Marriage Increases likelihood of father having good relations with children.

ü Marriage reduces the probability of children divorcing themselves or becoming unwed parents.

Ø  The academic and social performance of a child is very closely related to the structure of the family in which he lives and this is important for the quality of human and social capital

ü Divorce reduces the likelihood of children graduating from college and high school.

ü Divorce increases risk of course failure.

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•  The psychological stability and health of a child is closely related to healthy families and this is important for worker productivity and government finances

ü Children enjoy better physical health, on average, than other family forms.

ü  Sharply reduces infant mortality. ü  Increases life expectancy, especially for men ü Associated with reduce abuse of alcohol, and substance abuse for

adults and teens. ü Associated with better health and lower probability of injuries for both

men and women. ü  Lower levels of physiological distress and mental illness. ü Mothers have lower levels of depression than single or co-habiting

mothers.

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Ø The breakdown of the family is a symptom of a sick and weak society

ü  Abuse of women is 25 times more likely to occur in an irregular family. ü  Men who have witnessed domestic violence are three times more likely to

abuse their own wives and children. ü  Substance abuse and teen-age pregnancy is higher in broken families. ü  Women and children of broken families have a higher probability of living in

poverty. ü  Increase of the social welfare expenditures burden. ü  Higher levels of suicide. ü  Boys from single parents have are more likely to engaged in delinquent and

criminal behavior

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Percentage of Families that are in Poverty by Family Structure and Ethnicity, 2006

Source: Annual Demographic Survey, Poverty in the U.S.: US Census Bureau, August 2007, Table POVO2.

5.2

26.5

9.1

39.1

9.4

39.1

14.4

36.9

0

10

20

30

40

50

60

70

Married Single Married Single Married Single Married Single

White Asian and Pacific Black Hispanic

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Percentage of Women who are in Poverty by Family Structure and Ethnicity, 2006

Source: Annual Demographic Survey, Poverty in the U.S.: US Census Bureau, August 2007, Table POVO3.

Percentage of Women who are in Poverty by Family Structure and Ethnicity

6.6

33.5

11.5

44.3

16.7

42.1

7.6

25.3

05

101520253035404550

Married Single Married Single Married Single Married Single

White Black Hispanic Asian

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Percentage of Children who are in Poverty by Family Structure and Ethnicity, 2006

Source: Annual Demographic Survey, Poverty in the U.S.: US Census Bureau, August 2007, Table POV21.

Percentage of Women who are in Poverty by Family Structure and Ethnicity

7.5

37.8

12

49.7

18.5

47.2

9.2

36.2

0102030405060

Married Single Married Single Married Single Married Single

White Black Hispanic Asian

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Developed Countries Welfare Expenditures vs. Developing Countries Debt in 2007

Source: CIA World Handbook, 2008

1250

867

404

433

89.9

221

140

3416

70235

0 200 400 600 800 1000 1200 1400

US

Germany

France

UK

Spain

Brazil

Mexico

Nigeria

Million of Dolalrs

DebtWelfare Expenditures

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The family faces serious health and poverty problems, especially in the developing world

•  Lack of income and assets to attain basic needs: ü Human assets ü Natural assets ü Physical assets ü Financial assets ü Social assets ü Aging security

•  Vulnerability to adverse shocks are linked to an inability to cope with them

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Environmental Health, Welfare and Living Conditions in Low Income vs Developed Countries

Indicator % access House Connection: water 48 / 99 House Connection: sewerage 46 / 99

House Connection: electricity 62 / 100 Access to Improve Water Sources 61 / 100 Access to Sanitation 43 / 100 Solid waste disposal: landfill or incinerated 31 / 78 Solid waste disposal: other (dump,recycled,etc.) 66 / 22 Paved Road 19 / 94 Literacy 53.6 / 100 Under-five mortality (per 1000) 153 / 6 Public Expenditures on Health (%GDP) 1.5/ 6.2

Sources: World Bank, UN, 2006

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Causes of Death in Women and Men, 2005

WHO, World Health Report, 2007 , Projected deaths by region, sex and cause for 2005, 2015, 2030.

5 million new cases per year

8 million new cases per year

300-500 million new cases per year

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One-Year-Olds Fully Immunized

Source: Human Development Report, 2007, Table 6

Latin America

& Caribbean

South Asia

Central, Eastern Europe & CIS

East Asia & Pacific

Arab States

Sub-Saharan Africa

0

20

40

60

80

100

120

TuberculosisMeasles

20% Decrease Tuberculosis Immunizations

33% Decrease Measles Immunizations

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Infant Mortality Rates

Source: Human Development Report, 2007; Table 10

Sub-Saharan Africa

South Asia

Arab States

East Asia & Pacif ic

Latin America

& Caribbean

Cental, Eastern Europe

& CIS

High-income OECD

0

20

40

60

80

100

120

95.9% Decrease

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Low Cost Effective Interventions Cost of Treatment and (annual cost per capita)

US Dollars

Treatment Costs Effectiveness

Chemotherapy for TB (6 months ) $20.00 ($0.60)

95%

Contraceptives (HIV) $14.00 ($1.90)

99% (85%-95%)

Hydration salts for Diarrhea

$0.33 ($1.60)

95%

Pneumonia Antibiotics (5 days antibiotics) $0.27 High

Measles (1 dose of vaccine) $0.26 ($0.50)

98%

Malaria Pills / Nets

$1 / $0.5 ($0.05/$4.5)

100%

Sources: CDS, WHO

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Ø  Cost of malaria to African countries is 1.3% of GDP per year, productivity of the worker is reduced by 60%. Direct and indirect costs of malaria in sub-Saharan Africa in term of overall GDP is equivalent to a loss of $100 billion annually.

Ø  75% of TB infections and deaths occur in the 15-54 year age group (the most productive group). 20%-30% of Income is lost due to TB.

Ø  AIDS places seventh among the leading causes of death. The main mode of transmission are homosexual and heterosexual promiscuity and injected-drug-use (IDU) (all high risk behavior).

Ø  Majority of maternal deaths are due to poor access to health care (1.9% of female death)

Sources: Scaling Up the Response to infectious Diseases, 2002 and RBM 38, WHO, 2005

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Solutions often Proposed

Ø Outlined in the 8 UN Millennium Development Goals.

Ø Population control ü Aging population trap

Ø “Safe sex” and antiretroviral drugs. ü Condoms are not the answer to HIV and increases the

risk of contracting AIDS (British Medical Journal (2008), Chin (2007)

ü Not a solution for IUD and Heterosexual transmission ü Access to family planning increases sexual promiscuity

(Kaiser 2000, Paton 2002, USAID 2002)

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The Population Control Argument

§  First: rapid growth in population means the spread of poverty and aggravates conditions such as as poor health, malnutrition, illiteracy, and unemployment (Bucharest, 1974)

§  Second: population threatens government stability in developing countries, and encourages confrontation between developed and developing countries (Memorandum 200)

§  Third: it pushes future generations to scarcity, and an unsustainable environment carrying capacity (Rio, 1992)

§  Fourth: it sees population growth to be symptomatic of the larger problem of women's oppression—the more children a woman has, the less opportunity she has for her own self-actualization and development (Cairo, 1994 and Beijing, 1995)

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Aging Trap Ø  Social security system funding: the family cannot support

the elderly Ø Competition between the younger and older people Ø  Early retirement Ø  To provide for the economic needs of the elderly, there is a

reduction of funding allocated to training new generations Ø  The transmission of cultural, scientific, technical, artistic,

moral, and religious goods is endangered: "moroseness” results. Add to this immigration.

Ø  Saving rates are affected by a society's age structure, mirroring the change in an individual's saving rate over the life cycle.

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Speed of Population Aging

Number of years for % of population aged 65 and over to rise from 7% to 14%

115

85

73

69

65

53

47

45

45

41

26

27

27

25

24

23

23

22

21

20

France

Sweden

Australia

United States

Canada

Hungary

Poland

United Kingdom

Spain

Azerbaijan

Japan

China

Singapore

Chile

Jamaica

Sri Lanka

Tunisia

Thailand

Brazil

Colombia

Source: US Census Bureau, 2000

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Expenditure on Grant-Financed Development Activities of the United Nations System by Sector

(Percentage of Total)

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0

5

10

15

20

25

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Year

Per

centa

ge

of

Tota

l

Population Education

Expenditures on Grant-Financed Development Activities of the United Nations System by Sector

Source: Compiled from Comprehensive Statistical Data on Operational Activities for Development, years 1990-2006.

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SUSTAINABLE GROWTH REQUIRES

ü Savings ü Wealth ü Investment: Physical and Human Capital

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0

5000000

10000000

15000000

20000000

25000000

Less than high school High school Some College College

Married Single-parent Co-habiting

Average of NETWORTH

EDCL

MARRIED

Average Net Worth within the USA per Education Level

Sources: Aguirre (2007)

253%

333%

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Average Net Worth in USA per Age Classification

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

Married Single-parents Co-habiting

<3535-4445-5455-6465-74>75

Average of NETWORTH

MARRIED

AGECL

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Average Net Wealth in Canada

per Family Structure

Wealth in Canada

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Married Co-Habiting Single-Parent

Marital Status

Can

adia

n D

olla

rs

WealthHousing

155% 250%

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0

50,000

100,000

150,000

200,000

250,000

Less HS HS Terciary College

Level of Education

Ca

na

dia

n D

olla

rs

MarriedNot-Married 242%

Net Wealth in Canada

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Percentage of Head of Households that Report Owning Property and Holding Savings

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Unions Married Separated Divorced Widowed

Own HomeHold Savings

Source: ENEI (2004)

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Level of Education of the Head of Household per Race and Family Structure

0102030405060708090

LAD INDIG LAD INDIG LAD INDIG LAD INDIG LAD INDIG LRACE INDIG

Unions Married Separated Divorce Widows Single Parents

Family Structure

Per

cent

age

of H

ouse

hold

s

No-education Grade School High School

Terciary College Graduate

Sources: ENEI (2004)

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Children School Attendance by Family Structure

0

1000

2000

3000

4000

5000

6000

7000

8000

Unions Marriage Separated Divorce Widows

Family Structure

Head

Cou

nt

IndigenousLadino

Sources: ENEI (2004)

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How Government Policies Can Help: Some Examples

Ø Legislation that supports families vis a vis other types of living styles

Ø Programs that support and promote healthy marriages and stable families

Ø Changes in family subsidies/penalties for children

Ø Parental leaves, work structure

Ø Promotion and protection of the family as a means to eradicate poverty, especially the feminization of poverty

Ø Programs directed towards fostering functional societies and markets, where corruption is not a fundamental part of governmental operations.

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Education •  Transfer all government aid throughout voucher system

•  Differentiate voucher, targeting more resources to the most needed (with higher cost of education)

•  Spread out info about the key role of family within society and effect on educational outcomes

•  Enhance parents’ owes and rights to educate their children (e.g areas such as sexual education)

•  Allow parents (and or teachers) to get engage in municipal school management

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Competitive Funds

•  Prevent domestic violence and enhance health family relationships

•  Sexual education programs designed and chosen at school level by parents and teachers

•  Pre-marriage orientation •  Support programs for couple in crisis •  Programs aim to prevent alcoholism and

drug abuse

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Conclusion Ø  The family is a necessary good for economic

development: it should be promoted and protected if poverty reduction wants to be achieved.

ü Children develop in the best way within a family that is functional, i.e., with his biological parents in a stable marriage.

ü The breakdown of the family: damages the economy and the society since human, moral, and social capital is reduced and social costs increased.

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Ø The Neo-Malthusian approach is seriously flawed on many levels and policy actions based on such assumptions are inefficient and damage real sustainable development. They lead to:

ü Aging trap: one child policy ü Weakening of the family ü Health problems ü Financial burden for government

Ø Some of the recent reevaluations of family policies in developed countries seem to point in the right direction.

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Ø  Family structure is relevant for wealth. This happens to be the case after other characteristics are controlled by.

Ø  The impact of children on family wealth is best within marriage.

Ø  Evidence seems to hold across countries. In socialized market economies the negative impacts seem to be mitigated but not eliminated.

Ø  Life-cycle theory of savings seems to be supported by empirical evidence.

Ø Healthy family structures support private property.