Weak Population Growth is Common Throughout Much of the Region
I write a lot about Puerto Rico. This post will talk a lot about Puerto Rico. But I also write about other islands, like Hawaii, or the Northern Marianas. I have a thing for islands. I think they’re neat.
And recently, I got curious about the other islands in the Caribbean. Many of them are, one way or another, part of or associated with various European countries. Others are independent. So my question is: what have their population trajectories looked like?
I track a large number of entities for the region. Some are quite small: the island of Saba, a Dutch island, barely has 2000 people. Sint Eustatius is not much bigger at 3200. The British overseas territory of Montserrat has just 5000 people.
Other islands are rather big. Cuba has almost 11.5 million people. Haiti has almost 11 million. The Dominican Republic has 10.8.
All told, I track 30 different territorial entities and their populations at least back to 1960. And below, you’ll see the basic problem.
Caribbean Population Growth is Slow Given its Income Level
The Caribbean’s population has risen far less than anywhere else south of the United States. Now granted, it has outperformed North America… but that’s not saying much given the income gaps. Poor, high-fertility countries like those in the Caribbean should be growing very rapidly.
Plus, the Caribbean growth deficit is getting worse over time.
While the Caribbean had lower population growth than other developing parts of the western hemisphere as far back as the 1960s at least, in the late 1980s, population growth picked up in North America. Pushed up by a burst of immigration (legal and illegal) into the US and Canada, as well as a temporary rise in fertility, North American growth matched Caribbean growth until the early 2000s, and since then has outperformed it.
But is this just Puerto Rico? Maybe Puerto Rico’s 8% of Caribbean population is experiencing such severe depopulation, it drags the region down?
And voila! Dropping out Puerto Rico, the Caribbean closely tracks North American population growth.
But… why? That’s actually really odd. The Caribbean is far poorer than the North American mainland, and far less developed, with many high-fertility countries. Why is growth comparable to much-richer countries?
Breaking Down the Caribbean
Population Trends Vary Widely by Region and Country, and Are Very Volatile
One way we can get at this is to look at groups of similar countries and see their growth rates.
First of all, notice that the “overseas U.S.” (Puerto Rico and US Virgin Islands; so like 95% Puerto Rico) is not the only place to experience population decline! Population is falling in Caribbean Franch territories as well! In both Guadaloupe and Martinique, the two largest French territories in the Caribbean, population has been falling for some time. In Martinique it peaked in 2005 at 398,000 people, while in Guadaloupe it peaked in 2011 at 405,000 people. Both are now experiencing steady decline. The two smaller French territories, Saint Martin and Saint Barthelemy, are still growing, though Saint Martin had a major depopulation episode during the 1990s, and the two islands together only amount to 48,000 people.
We can also look at the Dutch Caribbean. Although growing now, the various islands associated with the Kingdom of the Netherlands have experienced extremely erratic population growth trends. But for this group, I want to look in greater detail. Here are the four major territorial groups (although note that the Caribbean Netherlands actually includes 3 “special municipalities” of the Kingdom of the Netherlands: Bonaire, Saba, and Sint Eustatius):
So here you can see the steep volatility of growth these areas experience. Also, note the x-axis: I’m taking this back to 1845. You may wonder what happened in the 1920s in Curacao and Aruba. The answer is they struck oil and big oil companies opened refineries… which by the 1980s had fallen on hard times (though oil production does continue today). But by the late 1980s and 1990s, the growth of international tourism, cruises, and cheap air passage to the Caribbean enabled a new tourism sector to flourish. Sint Maarten became a duty-free port in 1939 but got hammered by WWII… but then really turned things around by expanding its tourism infrastructure aggressively in the late 1950s and early 1960s. And beyond! Population boomed, largely from low-skill immigration from nearby Caribbean locations looking for work.
The key thing that the Dutch Caribbean, the American Caribbean, and the French Caribbean have in common is essentially free movement between them and their metropoles. Given that the French, American, and Dutch Caribbean all have far lower incomes than their respective metropoles, we might reasonably expect, therefore, that migration would pull people away.
But if this story is true, then we should see that population growth in a country accelerates with independence! And thankfully in the Caribbean, we have lots of cases of countries getting independence or other forms of autonomy!
Does Independence Matter?
Probably, But The Effect Size and Direction Is Inconsistent
And… independence… doesn’t do that much. We can look at 15 British or former British territories’ growth rates from 1960–2017 and find that independence just doesn’t have much effect. The chart below shows average growth rates for countries in the 10 years before and after independence, or before and after a major restriction on migration to the UK for non-independent countries that occurred in 1983.
This is actually average of annual growth rates for each country group, where growth rate is expressed as difference vs. the average growth rate for all British Caribbean locations. i.e. places growing slower than average are negative, faster than average are positive.
Let’s start with the blue line. When the UK denied residents of its overseas territories immediate access to UK citizenship, and thus placed a degree of restriction on their ability to relocate to the UK, population growth in those territories bounced up. That’s what we would expect, since it should cut outflows!
But… hold on. When we look at those countries, here’s what their individual growth rates look like:
And there you see the problem! Many of these are small areas for which I have incomplete information and must impute growth rates! As such, annual estimates are not a very valid estimator! For places that do have reliable growth rates like BVI, Turks and Caicos, and Cayman Islands… the results are manifestly unimpressive. For Turks and Caicos, movement restrictions were followed by worse growth performance. For the Cayman Islands, better. For BVI… no change?
So let’s do this another way. Let’s group these all into one population entity, and recalculate everything.
This makes the green line, which reflects all instances where migration options were suddenly restricted, far less compelling than previously. Indeed, immediately post-independence, it looks like population growth gets worse, though there is some suggestion of eventual recovery.
Let’s take one last step and look at the range on this. We’ll take 2 standard deviations around the solid green line, just for funzies.
Now look. I’m sure with a decent number of controls, we can narrow that range… but the reality is that shortly after independence or movement restrictions, some places to better. And some places to worse! There’s just no consistent effect!
In other words, whatever is impacting Caribbean islands still dominated by metropoles, it is unlikely to be suddenly solved by implementing controls on outflows.
Territorial Status Is Less Correlated With Population Weakness Than It Seems
There’s another piece of evidence in play. Take the French territories. If overseas status is the cause of population malaise, then you’d expect it to have a roughly similar effect in similar places. But alas, here’s growth rates in Caribbean France compared to other French overseas holdings. French Guiana is particularly notable:
And lest you think French Guiana might look impressive simply because its region has higher growth than the Caribbean while still being a laggard locally, here are French Guiana’s neighbors:
In other words, in other, even quite nearby regions, regions held by a distant metropole do just fine in terms of population growth.
On the other hand, when we turn to the Pacific…
Here, we see that the French Pacific does better or about equal to the independent Pacific islands. Hawaii also performs comparably. The U.S. territories used to perform comparably or better… but then crapped out in the 2000s.
So what’s going on?
One notable difference between French and U.S. territories is that French territories have representation and full integration with the metropole on a peer-status in many cases. There are exceptions, like French Polynesia, and weird cases, like New Caledonia, but all of the Caribbean places at least are normal French regions or collectivities, with basically normal legal treatment. U.S. territories all have idiosyncratic rights and government powers: some have birthright citizenship, some don’t. Some have no passport control to the U.S., some do. Some have a degree of influence over their own visa policy, others don’t. It’s all a crapshoot. Maybe U.S. territorial status is a lot worse than French status.
Then again, British territories are doing even better than U.S. territories, and they do not have representation, and for a long time lacked citizenship equality and free movement.
So I’m skeptical that legal status is the big determinant here.
Let’s look instead at something else. Let’s look at the demographic transition whereby countries have lower fertility as incomes rise. The five graphs below show 5 regions of the world, with TFR graphed against regional income. If I knew how I’d do a combined chart of all of these with lines connecting the dots… but I don’t know how.
Generally speaking, the more vertical the line, the faster fertility has fallen relative to income changes. So, for example, in Sub-Saharan Africa, fertility has fallen extremely quickly.
Fighting words for demographers: yes, I am arguing that Sub-Saharan Africa’s fertility decline, far from being unusually sluggish, is actually quite brisk. Compared to actual economic development as measured by GDP per capita, Sub-Saharan Africa has seen a large fertility decline with virtually no income gains. It has lower fertility than any other region had at its same income levels!
But okay, let’s compare the Caribbean and Latin America. Now, for the record, that is technically Latin America and the Caribbean, the World Bank doesn’t provide a breakout for just Latin America, and the just-Caribbean breakout is a group I’ve specified on my own (though using mostly World Bank TFR, income, and population figures). But just very quickly, let’s smooth the data a bit, and unkink the nonlinearities, so that we can make this a straightforward comparison of TFR at a given income level across regions, looking at the approximate path of TFR over the income course of the Caribbean.
Let me reiterate something very important to communicate to demographers but that won’t be important to lay-readers:
The fertility transition in Africa is extremely rapid when compared to development levels.
Now, back to the Caribbean. Here’s the basic point I want to make: controlling for development levels, the Caribbean’s fertility rates have more in common with East Asian countries than with the rest of Latin America. East Asia’s decline was even more aggressive, but the point is, when you think of the Caribbean, don’t think of Latin American demographics. They don’t have Latin American demographics. They have relatively low fertility. As of 2007, just 5 Caribbean countries had higher fertility than the United States (Antigua, the DR, Grenada, Haiti, and St. Vincent and the Grenadines). Even in 2015, the United States fertility is basically run-of-the-mill for the Caribbean; they aren’t hugely out-breeding us. The only serious exceptions is Hispaniola, where both Haiti and the Dominican Republic have TFRs over 2.4. But even then, their TFRs are falling faster than you’d expect given their income performance!
So why is growth anemic in the Caribbean? I’m not totallysure, but a big part of the story would seem to be the region’s extremely precocious demographic transition.
This story, by the way, fits Puerto Rico very well, with its extremely-low fertility and rapidly-aging population.
But let’s look for more stories; I’m having fun, aren’t you?
Identifying Peer Countries for Puerto Rico
Here’s population density by major Caribbean country-group:
So, okay, this gets interesting. The American Caribbean (95% Puerto Rico!) was extremely densely populated; far more than was usual for a Caribbean island. Even large, fertile islands/island chains close to the mainland like Cuba or the Bahamas don’t get as high. Once you eliminate extremely tiny islands where population density statistics are misleading, the list of Caribbean islands where density cracks 1,000 people per square mile is quite short: Aruba, Puerto Rico, Haiti, Barbados, and almost Curacao. Here they are below:
Let’s note a few things. First, Aruba and Curacao have very volatile population trends. They’ve also had frequent instances of population decline. They’ve also had multiple cases of state failure and government reorganization. This has occurred to such an extent that the Netherlands has actually absorbed much of their debt, and pays for some of their essential services out of pocket.
Next, Haiti: the latecomer to this crowd, Haiti has experienced gangbuster population growth. It is worth noting that Haiti is phenomenally poor… and has a long history of state failure, and is deeply indebted.
And finally, Barbados. What explains Barbados?
Well, for one thing, it’s quite small, just 169 square miles and under 300,000 people. But let’s start running through the various demographic components of change, beginning with fertility. Here’s the total fertility rate for each of these areas, as well as the Dominican Republic and Cuba; more on why I include them later.
Here we see why Haiti’s growth has been so much more pronounced than Puerto Rico’s, and the same goes for the Dominican Republic: it has vastly higher fertility, and has for decades! Puerto Rico is much further along in its economic development than Haiti or the Dominican Republic, and as such has lower fertility, which means lower growth rates. Badabing, badaboom!
But Puerto Rico is indeed quite low, especially in recent years. The strange thing is, Puerto Rico had a transition equivalent to many other countries during the 1960s, but then the transition slowed in the 70s, and fertility remained higher than peer countries through the 1990s. But whereas the fertility decline has mostly flattened out in Cuba, Aruba, or Barbados, it has continued apace in Puerto Rico.
As a result, here’s the crude natural rate of increase (births-deaths / population) for each of these countries.
Puerto Rico’s crude birth/death balance is bad and getting worse fast. But the crazy thing is… it really isn’t that bad! Compare to Aruba, Cuba, or Barbados: we’re not talking about different worlds here! Particularly with Barbados, the shared trait of having negative natural growth in 2016 is interesting. Tellingly, Barbados’ population trends are becoming a political issue there too.
But hey, if we know the natural change in population, and we know annual total population change… then we should really be able to say what net migration is! And voila, here’s net migration rates:
Aaaaand Aruba and Curacao totally blow out the scale. Being much smaller than the others, they tend to have more volatile migration trends. Let’s try this again without those two countries included!
Now that’s better! Buuut… there’s still a problem. For Haiti and the Dominican Republic, I have to impute annual births and deaths from 5-year UN crude death and birth rate data. As a result, it’s artificially smoothed. So let’s try and make things a bit more comparable, and smooth our other countries too.
That’s more like it!
So here’s the interesting thing. As Barbados and Cuba’s natural increase rates have fallen, their net migration rates have risen, partially offsetting the change. In Barbados in particular, the net migration rate is now positive, which is not typical for Caribbean countries (of the 17 countries for which the UN provides migration data in the Caribbean, 13 have negative net migration rates).
So why didn’t this happen in Puerto Rico? Puerto Rico is similar to the rest of the Caribbean in having declining natural balances and a history of big outflows: the Barbadian historic exodus was scarcely smaller in relative terms than the Puerto Rican one! But Puerto Rico went one way, Barbados (and even Cuba!) the other.
Let’s look at that in a bit more detail. Here’s my estimate of real GDP per capita in constant, 2010 US dollars for Barbados, Cuba, the Dominican Republic, Haiti, and Puerto Rico, going back as far as I can take it. In many cases, the actual data doesn’t go back that far. Where data is missing, I use substitutes, such as by finding wage-data series that overlap with GDP per capita data and extrapolating the relationship backwards. Older data should be considered less reliable but still broadly indicative of what’s going on.
From the bottom up, we’ve got the Caribbean’s long-time-poorest-country, Haiti! Real GDP per capita in Haiti is basically unchanged since the mid-1960s: no real economic growth per capita in over half a century.
The Dominican Republic and Cuba, meanwhile, make an interesting story. Through the Cold War, Cuba was richer than the DR, thanks to Soviet support. But when the Comintern collapsed, so did Cuba, and since then, Cuba and the DR have basically been neck-and-neck in terms of income per capita, at quite poor levels.
Then we have Barbados. About as rich as Puerto Rico in the early 1960s, it lost a decade after independence for reasons unclear to me, but perhaps related to volatility in sugar prices. In those years, Barbados also had substantially worse net migration than Puerto Rico had.
But by the late 1970s, Barbados was booming again. Puerto Rico was benefiting from the exceptionall generous tax exemptions under Section 936 of the US tax code which began in 1976, but Barbados’ growth actually kept up with Puerto Rico’s, despite consistently worse net migration rates. In other words, a key impact of Section 936 in Puerto Rico may not have been to boost the growth rate in GDP per capita, but rather to boost population retention, as at least some comparable Caribbean places with no similar provision had similar growth rates, but with worse outflows.
In the 1990s, however, Barbados was hit hard by the oil price spike, which Puerto Rico weathered much better. Through the mid-2000s, Barbados growth was much slower than Puerto Rico’s… but since then, PR has declined while Barbados has been about stable.
But there’s a gimmick here. In turns out, the investment profile of these countries varies substantially. In some countries, basically all income is devoted to current standard of living. In others, very little is. So for example, Puerto Rico’s GDP is substantially inflated by favorable tax treatment, encouraging US companies to set up subsidiaries. Haiti, meanwhile, sometimes consumes beyond its means. So let’s instead look at real household consumption.
But there’s another trick with that! Household consumption data is even sparser than real GDP per capita data. Not to fear, however, extrapolation-man is here! We can look at the data we do have for each country and compare it to GDP per capita, and see what the usual relationship between consumption and income is, and then assume that relationship continues back historically, adjusted for macrotrends in similar countries. So again, take this all with a grain of salt, but nonetheless, it should help us get a broadly indicative sense of living standards by country.
Again, let’s start from the bottom! Haiti has… basically no growth.
Then we come to Cuba and the DR. And when we convert for how much of GDP is actually used by households to consume, turns out the DR is appreciably higher! Now, this is a bit tricky: I haven’t included governmentconsumption. So big differences in the size of government could cause household consumption to mis-represent standard of living differences. Imputing government consumption for missing years could be challenging… but I’ll try it anyways. Here below is household and government consumption, 1960–2016:
And here we see household and government consumption, which is more-or-less peoples’ standard of living, right?
It matches our basic intuitions fairly well I think. Haiti is really poor. Cuba was way richer than the DR until the fall of communism, but since then has maintained a slight lead. Puerto Rico is richest of all.
But, about Puerto Rico. This data series shows that from the mid-60s to 1990, Puerto Rico and Barbados had about equivalent performance. Puerto Rico has done better since then, but, then again, Puerto Rico is now facing a way more severe population crash, so it may just be we haven’t given enough time for convergence. In other words… the best that can be said of Section 936 is it probably gave Puerto Rico a temporary burst of income which could have been reinvested in growth locally, but which evidently was not reinvested that much more effectively than whatever they do in Barbados.
And how does this all relate to broader Caribbean population trends?
Well, it comes back to the thing I said at the veeeeeery beginning. I’m interested in islands.
Islands have a unique set of economic problems. They have extremely constrained supplies of land, with hard limits on the possibility of sprawl. They face uniquely high transportation costs. When people leave islands, they go further away than they might in land-areas, and return costs are higher. Plus, the tight land constraints make land use tradeoffs all the more economically significant. Thus, any economic shock should yield more direct and speedily-measurable demographic consequences than an economic shock in a larger landmass. The more densely settled an island is, the more this should be true, as density loosely proxies for how much “wiggle room” they have for new development, wastage of resources, etc. No surprise then that many of the most volatile population trends are in dense islands, even when those islands are quite large, as in Puerto Rico’s case. Less-dense Dominican Republic or Haiti are less volatile than Puerto Rico. So is Jamaica. And yet Jamaica’s TFR has fallen below replacement rate too!
This is a theory I’m just fiddling with for now. But the basic idea, that very dense places face more volatile population, actually has non-island application too! Imagine a given population on the mainland of, say, 1 million people. If I asked you to guess which had a lower standard deviation in growth rates, knowing nothing else, would you bet 1 county with 1 million people, or 100 counties with 10,000 people each? Which population will be more volatile?
Folks, the answer is 100 counties, even if they’re all same-size, and it doesn’t matter whether they’re contiguous or not. Geographic concentration increases exposure to and volume of response resulting from idiosyncratic risks. This has uniquely powerful implications of very dense islands. And the population history of the Caribbean confirms this! In any individual year, many Caribbean countries have very strong population growth! But in any individual year, a few of them have a volcanic eruption, or a major hurricane, or their major crop has a market shock, or they have an oil boom, etc. The point is… across the region, very high population concentration exposes more of the population to a more extreme version of idiosyncratic risk, causing the region-wide exposure to be higher, causing long-run growth to be lower.
This article has been republished from www.medium.com