Russia’s Demographic Resilience

In this post I look at the (surprisingly good) Russian demographic data for Jan-Mar 2009 and argue in more depth that the economic crisis is unlikely to have a very major negative impact on short-term fertility, or any but a very minor impact on long-term demographic trends. I make some falsifiable predictions, estimating a birth rate of 11.5 / 1000 and a death rate of 14.5 / 1000 this year, changed from 12.1 / 1000 and 14.8 / 1000 in 2008, respectively.

In my April article Rite of Spring: Russia’s Fertility Trends, I argued that in the next few years Russia is going to experience a minor demographic resurgence to fertility rates of around 1.7-2.1. This is based on a) relatively high fertility expectations, similar to those seen in the late Soviet Union and Western Europe (France, UK,…) which had / have near replacement-level total fertility rates, b) a little-known indicator called the “average birth sequence” implied the natural long-term fertility rate, absent birth postponement, is around 1.6-1.7 and c) a new spirit of confident conservatism. I also dismissed the idea that the current economic crisis is poised to derail these developments

Furthermore, the post-Soviet collapse was an unprecedented hyper-depression, surpassed only by the Civil War in its social costs. Though on paper recovery from the 1998 crisis was rapid, newly severe budget discipline undercut social spending that left many classes and regions destitute for years. It is telling that in the first six months of the 1998 recession, the proportion of people who could hardly afford even food rose from 29% to 40% of the population; in stark contrast, in the five months since the Russian economy began collapsing in October, this figure rose from 9%…to just 10%.

This is notwithstanding that the rate of decline from Q4 2008 to Q1 2009 was even sharper than during H2 1998. However this time round, both state and society have much bigger surpluses to fall back on during the lean times. As such, the probability that the crisis will have a significant longterm effect on Russian fertility is extremely low.

This is not a new idea – in my 2009 predictions, I forecast:

In Russia, the birth rate will be between 11.5 and 12.5 / 1000, the death rate at 14.5 and 15.5 / 1000 and net migration will fall substantially to 0.5 / 1000. For comparison, the figures for the first ten months of 2008 were 12.1, 14.8 and 1.7 respectively.

And even earlier, from The Importance of Self-Sufficiency in December 2008:

All vital demographic statistics, with the exception of the total fertility rate, improve during this period – the expanding social safety net checks mortality increases, but the confidence crisis temporarily dents the former. The overall humanitarian impact is insignificant compared to the Soviet collapse and even 1998.

(On a side note, I predicted GDP growth of 0-3% for 2009 in the above article. Ouch! It hurts to remember).

Now how do these forecasts stack up against reality?

Though the data for Jan and Feb was encouraging, I refrained from making any big observations since it was too small a sample, but I think it’s appropriate now that Rosstat demographic data for Q1 2009 is available. Relative to the same quarter of 2008, the birth rate increased from 11.5 to 12.1 / 1000; death rates fell from 15.5 to 15.0 / 1000; the infant mortality rate and divorces fell, and marriages remained constant. There are a number of good and bad caveats.

As frequently pointed out in the Western media abortions are going to increase and births are going to be postponed in light of the economic crisis. What will this mean in practice? They can only become statistically significant from around April, because abortions in Russia are only legal within the first twelve weeks of conception and the economy started imploding in October 2008. From then on we can expect to see intensifying downward pressures on fertility, especially as we enter the autumn months.

That said, I do not expect a very big drop – certainly no more than 10%, and probably closer to 5%. In 2008 there were 1,718k births in Russia, giving a crude birth rate of 12.1 / 1000. So in other words, there will be 1,546k births and a CBR of 10.9 / 1000 in the “low” scenario and 1,632k births and a CBR of 11.5 / 1000 in the “medium” or expected scenario. The high(ly unlikely) scenario is 12.0 / 1000. (I also expect 2010 to be similar to 2009, with further solid increases in the TFR starting from 2011). How did I reach this conclusion?

First, as I pointed out above the economic crisis is not (yet) translating into a humanitarian crisis (“It is telling that in the first six months of the 1998 recession, the proportion of people who could hardly afford even food rose from 29% to 40% of the population; in stark contrast, in the five months since the Russian economy began collapsing in October, this figure rose from 9%…to just 10%”).

Second, as I noted in the Rite of Spring article, since 2006 there has been a major sociological shift with sustained increases in the number of people who believe in Russia’s future (I believe this partly explains the fundamental upwards shift in fertility seen recently). It is telling that at no point during the crisis did the number of Russians who thought the country was on the wrong path, exceed those who thought it was on the right path. Though the Western media try to spin up the specter of an imminent socio-political crisis in Russia, frequently citing last year’s mafia-instigated Vladivostok riots for lack of anything better, it is relatively easy to point out their logical inconsistencies just by looking at the Levada polling data. Just as I did in a letter to the Moscow Times. The point I’m making is that national morale was high in 2008, relative to the pre-2006 period, and has been only moderately dented by the crisis.

Third, even during the 1998 crisis – when morale and living standards fell much faster than today – the drop in birth rates was not that huge (though admittedly it was close to its nadir anyhow back then). The number of births fell by just 5%, and almost fully recovered by 2000. However, this was due to the (relatively) rapidly growth in the number of women of reproductive age, for the TFR only caught back up in 2001. Today this age group is growing very slowly (and will start decreasing with accelerating speed from the early 2010’s).

That said, in conclusion it is very unlikely that the birth rate will fall by any more than 10% in 2009. I was certainly surprised by the magnitude of the fall in Q1 GDP (as was Ed Hughes) – my starry-eyed predictions of 0-3% growth for 2009 will haunt me for a long time now that Q1 saw a -9.5% decline and analysts are predicting anything between -4% and -8% for the year (I’m currently leaning towards -5% to -6%). However, I still stick by my initial assessment that 2010 will see a (moderately) strong recovery with GDP growth exceeding 3%. This will stave off any major cuts in budgetary social support and hold Russia in place against plummeting back into the death spiral.

It is highly encouraging that death rates continued falling in the midst of a near-depressionary contraction in economic output, easing from 15.5 / 1000 in Q1 2008 to 15.0 / 1000 in Q1 2009. Even more encouraging was the structure of the mortality decline. Deaths from alcohol poisoning fell by 13%, and overall deaths from non-medical causes fell by 9% (even the suicide rate remained steady). This is tentative evidence that Russians have finally kicked their habit of drinking themselves stupid when things don’t go their way.

There’s also a continuing shift from hard spirits to milder alcoholic drinks, a trend I first wrote about in Out of the Death Spiral. (This is significant because almost all of Russia’s abnormally high mortality can be attributed to excessive binge drinking of vodka). In Q1 2009 the share of vodka in alcohol consumption was 54.2% in pure alcohol terms, compared to 58.4% in all of 2006 (note Q1 is winter, when harder drinks are generally preferred). This bodes well for future improvements in the health of the nation.

However, here is also evidence of a slight shift towards illegal moonshine consumption – though registered production fell by 12%, overall consumption only fell by 4% (albeit part of the discrepancy can be attributed to Ukrainian imports, or drinking down accumulated stocks).

These positive drinking trends are coupled with continued government investment into the National Priority Project on health, which funds the construction of a network of hi-tech medical centers, acquisition of new oncological equipment and healthy lifestyle promotion. As such, we can be pretty certain that unlike in prior downturns – the mortality explosion during the post-Soviet hyperdepression and the mortality spike after the 1998 Crash – there will be no increase in the number of deaths, and quite possibly even a substantial decrease. The prediction? Relative to 14.8 / 1000 in 2008, the mortality rate for 2009 will not exceed 15.0 / 1000 (low scenario) and may be better than 14.5 / 1000 (the medium scenario). The best case is 14.0 / 1000. Subsequent years will see a general trend towards improvement.

I was surprised by the migration stats. Though a reduction in immigration was predictable, I did not expect the decline in emigration. I mean, the construction sector pretty much imploded – surely the Central Asian Gasterbeiter would be compelled to go home? But as it is both indicators fell but the net inflow of migrants remained unchanged at 0.17 / 1000.

So in conclusion, the overall rate of population decline eased from 80,900 in Q1 2008 to just 46,900 in Q1 2009, equivalent to 0.03% of the population. In other words, Russia has for all practical purposes halted its population crunch – at least for now.

Incidentally, the situation in Ukraine is also looking bright, despite the fact that the economic collapse there is much more comprehensive – its GDP declined by an estimated 20-25% in Q1 2009 and a third of Ukrainians can barely afford food. Nonetheless, in Jan-Mar birth rates increased from 10.2 to 11.1 / 1000, death rates fell from 18.0 to 17.0 / 1000 and nuptiality measures improved. Since Ukraine shares Russia’s predilection for excessive alcohol consumption, especially in times of economic hardship, it goes without saying that this too is an interesting and encouraging development.

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