Sunday, 27 December 2020

Putting demography back into economics

As a population economist, I am receptive to the idea that population concepts like migration, population growth and decline, population ageing and the age distribution, etc. are important things for economics students to understand. So, I read with interest this 2018 article by Humberto Barreto (DePauw University), published in the Journal of Economic Education (sorry, I don't see an ungated version online).

In the article, Barreto uses an interactive Excel spreadsheet that creates population pyramids from dummy or live data, to illustrate population concepts for students. The spreadsheet is available freely online here. It's mostly reasonably intuitive, but to get full value from it you probably need to read the full gated article and work through a couple of the exercises Barreto describes. As far as putting demography back into economics is concerned, Barreto quotes 1982 Nobel Prize winner George Stigler (from this 1960 article):

"In 1830, no general work in economics would omit a discussion of population, and in 1930, hardly any general work said anything about population.”

However, the key problem with using a tool like this is not the tool itself, it is the opportunity cost of including population concepts into an economics paper - what will be left out in order to accommodate the population concepts? Barreto does acknowledge this point in the concluding paragraph to his article. In an already crowded curriculum, it is difficult to see where population concepts could best fit. It would be challenging to squeeze it into an introductory economics paper, for instance. In the overall programme of study for an economics student, encountering population concepts would probably make most sense as part of macroeconomics where there are strong complementarities, and where the Solow model already appears (but where population change is treated as exogenous). On the other hand, in universities that already have a demography or population studies programme, teaching population concepts might create an uncomfortable situation with economists teaching in an area of expertise for another discipline. However, I've never been one to respect disciplinary boundaries, with various bits of political science, psychology, and marketing appearing in my papers (albeit through an economics lens).

Anyway, coming back to the topic of this post, Barreto's spreadsheet is interesting and may be of value in helping to understand population concepts that are important for economics students. Enjoy!

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