At a press conference last November, as Vladimir Putin was massing troops along the border with Ukraine, he was asked what keeps him up at night. Putin answered that one of the main problems Russia faces today was its population decline and its threat to the country’s economy. He added: “From a humanitarian point of view and from the perspective of strengthening our statehood, and from the economic point of view, the demographic problem is one of the most important.”
Seen from the perspective of the current war in Ukraine, Putin’s words can be read in a broader light. For a totalitarian ruler like him, a military expansive state needs people for that expansion.
Russia is not doing well in this regard. At present, the rate of change of the Russian population is very close to 0 per cent. The outlook shows a declining population (see chart below).
“Russia has one of the lowest fertility rates in the world of 1.58 births per woman, which is also below the replacement rate of 2.1 births per woman. Russia also has one of the oldest populations in the world with an average age of 40.3 years. Further contributing to Russia’s population decline is a low level of immigration.”
Until the beginning of the 20th century, women had many children (e.g. on average 7 in Russia). Since then, birth rates have fallen fairly steadily.
Why is that?
A falling birth rate is surprising from a fundamental economic perspective since demand increases as income increases. And in the 20th century, the standard of living for many people increased significantly. So why has the birth rate fallen?
There are at least two reasons.
The Ukrainian-born American economist Harvey Leibenstein (1922-1994) was the first to view fertility behaviour within the choice-theoretic framework of neoclassical economics. He emphasized that children were an old age security in earlier times (and still are today in some parts of the world). The more children, the greater the probability that the parents were cared for (by these children) in old age.
With the introduction of social insurance, this personal reason for having children became increasingly obsolete.
A second reason. The opportunity cost of raising children has steadily increased. Opportunity cost is the potential loss from a missed opportunity – the result of choosing one alternative and forgoing another.
The opportunity cost of raising children lies in (mainly) women’s ability to participate in the workforce, earn money and become financially autonomous.
The introduction of the welfare state and the increasing opportunity costs of having children are probably the main reasons for the sharp drop in birth rates in almost all industrialized countries.
States have only recently begun to take countermeasures. Mainly by promoting the compatibility of family and career of women (lowers the opportunity cost).
Social security remains a “problem” in the sense that social security itself requires a premise (a roughly constant size population) that is undermined by its existence.
Therefore most industrialized countries continue to have a problem achieving a birth rate that keeps the population constant over the long term.
So does Russia.
In the case of Russia, there are also some more negative factors.
Primarily because of Covid, between October 2020 and September 2021 natural population fell by almost one million, analysis found.
Moreover, the war has sparked an exodus of educated professionals and is likely to yield maybe ten thousands of casualties, many of them young men who would have been expected to contribute to the economy for decades to come.
The imposed sanctions may push Russia into its deepest recession since the early 1990s, threatening to create a long-lasting economic upheaval that may encourage people to have fewer children.
On the other side: A Ukraine integrated into Russia would suddenly increase the population of Russia – and it would, above all, increase the proportion of well-educated workers in Russia. Russia’s population problem is maybe not at the heart of Moscow’s strategy with its war, but possibly an important reason.