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The Demographic Nightmare Caused by Gender Selection

Politics / Demographics Dec 01, 2015 - 03:54 PM GMT

By: Rodney_Johnson

Politics I took a year off after college. I don’t remember it having a cool name like “gap year” back then. Most people considered it goofing off. I spent the summer and fall on the coast in Florida waiting tables, then moved out west to Jackson Hole, WY for the ski season. I worked at a hotel at night and skied during the day. It was a modest existence, no doubt, but it was also just as awesome as it sounds.

Back then Jackson Hole was still a hole. The airport had not been expanded, so there was no large jet service. However, changes were already happening. It was clear the place was about to explode. The owner of the hotel at which I worked called me into his office at the end of season. He offered me a job as a real estate agent, working with him selling vacation properties to tourists.

I thought about it for a few seconds, and then told him there were 65 guys for each girl in that town, and the one girl wasn’t that pretty. I’d be leaving for New York as soon as the season was over.

I’m certain he made another fortune in real estate, and I’m also certain that the girl/boy ratio did not change nearly fast enough to suit me.

Luckily, I had the option to move, but for millions of people, there’s no escaping the fact that there aren’t enough women for each man to marry.

Much has been written about the imbalance between the number of boys and girls in China, where roughly 118 boys are born for each 100 girls.

What gets less attention is that India has the same issue, although not as bad.

Given the desire for male children in Chinese culture, the Chinese one-child policy led many couples to abort their pregnancy if they found out the child was a girl. Indian couples also prefer male children, but it was a desire for smaller families that led them to terminate pregnancies if the child was a girl.

The end result is that the two countries on the planet that house one-third of our population are missing about 100 million women.

Houston, we have a problem.

The imbalance grew from the 1980s through the 2000s, so only now are large numbers of young men reaching marriage age and finding no likely brides. The problem will only get worse over the next several decades and will hit India harder than China.

China’s fertility rate has been low, but steady, for many years. They have a constant, but unequal, stream of men and women joining the marriageable age group.

India’s fertility rate meanwhile has been dropping rapidly, so the flow of women into the group is slowing dramatically compared to the number of men that are already there. This makes the gender imbalance worse in India, even though the absolute numbers look worse in China.

The question on everyone’s mind is: “What happens next?”

There are some historical examples of big gender imbalances, like in Europe after WWI. But typically society quickly rebalanced. Today, China and India are in uncharted territory because they have engaged in gender selection for so long and the numbers are now so out of whack.

We don’t know exactly what will happen over the next several decades, but there are some signs of what might lie ahead. Unfortunately, none of it is good.

The biggest issue in China is savings. The domestic population saves roughly 30% of its income. They limit what they spend, thereby slowing economic growth. Many people save for retirement and health issues, but those with boys must put away extra cash to make their little prince attractive to prospective mates. This involves paying for education as well as helping the young man buy property, which is a big mark of success.

Both China and India will have to contend with a potential rise in crime and social unrest.

According to a study from the Australian Centre on China in the World, unmarried men of working age are much more likely to turn to crime than married men, especially if they lack education. Women tend to marry up on the social ladder, so at the bottom of the ladder there will be millions of uneducated, unsuccessful men with no wife and nothing to do.

It’s easy to see how this might lead to problems.

Some solutions have been suggested, like wife-sharing. To my Western mind, the thought is so foreign it’s a non-starter. It might be more plausible in Asia, but judging from the backlash to the Chinese professor who brought it up, I don’t think so.

The good news is that the real problems from this imbalance are still two decades away. India has tremendous growth potential during that time, while China’s labor force will start to decline. Let’s hope both countries use some of those years to come up with a better solution than more prisons.

Follow me on Twitter ;@RJHSDent

By Rodney Johnson, Senior Editor of Economy & Markets

Copyright © 2015 Rodney Johnson - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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