I always understood 2.1 to be the replacement rate because it would be two children to 'replace' two parents, with the 0.1 being to cover the inevitable deaths of a person before reproducing or for infertility.
Maybe what they were saying was that that 0.1 may actually be lower in developed countries with lower infant mortality? Maybe it's more like 2.05 in developed countries? (not sure what "human labor output" has to do with it, though)