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Targeting ZPG

Australian fertility rates of around 1.88 babies per woman are quite high by developed country standards but still well below replacement fertility which many claim is around 2.1. Thus Australia could achieve ZPG simply by controlling the migration intake. The intake would still be non-negligible because Australia exports many residents each year who seek to return to their country of origin. The building industry claim that we need high rates of immigration to boost private investment in housing but this has always seemed to me to be a “tail wagging the dog” policy – housing investment should not be needed to keep the economy afloat. Housing should provide a place to live. The resources devoted to housing could instead be directed to education, leisure, improving the stock of existing housing and helping to deal with a population of existing people who will live longer.

There would be transitional costs in making this shift since so much private investment is housing investment. But the intent of macroeconomic policy should be high living standards not growth for its own sake. It would be better if we became unhooked from dependence on an ever-expanding population which drives housing which drives incomes.

This seems a better way of thinking about the future than planning to double our current population to 50 million by 2100 with planned populations in Sydney and Melbourne of over 8 million.

The argument that this fails to address humanitarian concerns of overpopulation elsewhere is not strong. Taking an extra 25 million will have no discernible impact on a world population of 8 billion but will leave Australia with a less attractive environment and resource (specifically water) shortages.

10 comments to Targeting ZPG

  • Taking an extra 25 million people coming to Australia from much worse places will have a discernible effect on the lives of those 25 million people—doesn’t that count? Does nothing matter unless it helps billions?

    If immigrants buy or rent housing, they have to get money to pay for it. If the Australian government doesn’t choose to subsidize them, they will get it by working–which is to say by producing for other people value sufficient to pay for building that housing. So they aren’t consuming resources that “could instead be directed to education, leisure, … .”

    Why do you consider zero population growth desirable?

  • hc

    Hi David

    On the first point I partially agree with your comment. Its a nationalistic bias I have.

    On the second point I used to teach this line – and I have read your own work in this area – it is essentially a “gains-from-trade” argument. I now longer am interested in exploiting the tiny triangle of surplus we might get from immigrants – it is likely to be offset by other public sector costs anyway. I am much more interested in maintaining an attractive environment and in defending biodiversity values. I just don’t see as an ideal society one that is heavily populated.

    Measured economic gains are important but not everything.

  • Uncle Milton

    Harry

    how do you know that 25 million people is all the environment can handle? I’m not saying you’re wrong, but on what basis are you right?

  • hc

    Uncle Milton, I don’t know but already the human impact seems enormous. Why risk it? What is the point of pushing the limits? Crowded cities, congestion, increasingly expensive basic commodities such as water. Must it be the case that every part of the country is fully developed?

  • Jim Rose

    Hc, are the gains from immigration any different from those from a natural increases in population from people having babies.

  • hc

    The direct gains (or losses) to you and me differ depending on the age of entry of migrants – if they have been schooled elsewhere at public expense we save tax dol;lars here with migrants. If they have many kids here or are sicker than we are when they arrive or if they are unemployed then public costs rise. Nationalism means there are gains from having kids of your own rather than migrants.

  • Uncle Milton

    “Nationalism means there are gains from having kids of your own rather than migrants.”

    Migrants bring cultural diversity which is on the whole good. Not always, of course, but in retrospect Australia benefited hugely, in a cultural sense, from post war European migration. This is indisputable. The only negative was Croats and Serbs at at other’s throats at soccer games.

  • rog

    There was also the easy access by Italian criminals (Trimboli et al) and Asian criminals.

  • rog

    Putting the issue of criminality in perspective it was once a requirement to be a criminal to enter the country. Somehow the place allowed them to be better people.

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