The Post told readers that South Korea and other East Asians governments are worried that their countries will become less polluted and that wages will rise in coming years. Of course that is not exactly how the Post described the situation. The Post said that "collapsing birthrates are alarming East Asian governments, which in coming years will face a demographic crunch as the proportion of pensioners rises and the number of working-age adults declines." In standard economic theory, a smaller labor force will lead to a higher capital to labor ratio, which will increase productivity. If productivity is higher, workers can both enjoy higher living standards and be able to support a larger population of retirees. A smaller population will also make over-crowded countries more affluent by reducing the stress on space. In addition, it will make it easier to meet goals for reducing greenhouse gas emissions. For example, a 10 percent reduction in population has the same effect on greenhouse gas emissions as reducing emissions by 10 percent per person. The latter would be costly, so a smaller population is a great asset for countries that are trying to be responsible in limiting the damage they do to the world.
--Dean Baker
