Solving the population problem Estonian-style

So I already knew that Newfoundland and Labrador’s population is shrinking. Indeed, despite the eloquent dismissal of the numbers by their premier emeritus, this PC government has used scarce public funds to appoint a minister to tackle this very issue. The prestigious Harris Institute acknowledges the undeniable truth put out by the Conference Board of Canada: deaths exceed births, and immigration doesn’t cover the difference.

Newfoundland and Labrador is not alone in facing such trends; similar cresting of the population wave is happening here in Estonia.

In Newfoundland and Labrador, the decline of the fishery — culminating in the cod moratorium in 1992 — set in motion two demographic challenges. The first was an exodus of displaced workers leaving home to seek employment elsewhere. The second? Those left in the turbulent waters of home had fewer children, as is often the case in tight economic times.

The '90s brought a different series of upheavals for Estonians. Leaving the Soviet Union, establishing a new currency and institutions, battling with inflation, unemployment, and a whole host of economic problems had a similar effect on the baby-making mood here. As the anti-boom moves into working age, Estonia faces population decline and a smaller number of workers to support an aging population.

So then, what is to become of us? Does a downward trend in population mean a downward direction for a society? There are many that say it does not.

Economist Jeffrey Rubin, in his bestselling book, “The End of Growth (But Is That All Bad?),” has argued that the unmitigated pursuit of such growth is a root cause of the economic crises that plague our societies. As the potential growth rate for an economy equals the sum of its productivity growth rate plus the rate of labour force growth, an economy only has potential for growth if the sum of these keeps increasing. Many scholars, such as anthropologist Jared Diamond, have outlined unchecked population growth as a cause of societal collapse throughout history, as higher population numbers strain resources.

Perhaps a society does not need continuous population growth to continue to prosper. “Population decline [in developed countries] is inevitable,” says Dr. Luule Sakkeus of the Estonian Institute for Population Studies, “but this doesn’t matter.”

In Rubin’s recipe, we see that if the labour force isn’t growing, then productivity must be the only road to growth. It's in this spirit that Estonia has sought to maximize the productive potential of the numbers it has available.

There are many policies through which this maximization is pursued. Estonia offers one and a half years of fully compensated maternity leave, with the option of the job being held available for another 18 months without salary, if the parent so desires. The time spent on parental leave also accrues pension eligibility. From there, the government subsidizes full day kindergarten/day care, in order to facilitate a return to work. 

There is also a much-needed nascent effort to encourage more flex-time and part-time work, so as to ensure that the economy is flexible enough to find a space for all who can contribute.

Higher education is also free. Removing financial barriers to skill development allows a person to maximize their productive potential, and the higher wages earned by the university and trade-specialized increase the overall output of any modern economy.

Moreover, as life expectancy continues to rise, many are choosing to work later into life. Here again, it's important that part-time and flex-time options are available so as to ensure that workers can adjust their schedules to their capabilities and lifestyle desires. 

It is in such dynamic policies that people are given opportunity to maximize their lifetime contributions to an economy and to a society.

Population decline is not, then, a death knell for a society. Denying the numbers, or a government’s failure to enact legislation in response to such trends, however, is not how the problem will be solved. N.L. has made baby steps in this regard, with the $1,000 birth cheque, and $100 per month offered to parents for the first year of a child’s life. If the situation is to be tackled in earnest, perhaps the Estonian example would be a good place to start.

@Terry_McD