Today’s Wall Street Journal (5/14/24) highlighted a startling demographic milestone. Specifically, the global fertility rate has dropped so precipitously that over time the world’s population will decline. The Institute for Health Metrics and Evaluation at the University of Michigan projects that the world’s population will increase from the current 7.6 billion to around 9.5 billion in 2061 and then start to decline.
The global fertility rate has more than halved over the past 70 years, from around five children for each female in 1950 to 2.2 children in 2021—with over half of all countries and territories (110 of 204) below the population replacement level of 2.1 births per female as of 2021.
An economy with fewer children will struggle to finance pensions and healthcare for growing ranks of elderly. As birthrates fall, more regions will experience depopulations, with consequences ranging from closed schools to stagnant property values. Rural hospitals cannot stay open because of the falling local population.
Some estimates now put the number of babies each woman has below the global replacement rate of about 2.2. The U.S has a rate of about 1.62. South Korea’s rate, the world’s lowest, is only .72.
“The demographic winter is coming,” said Jesús Fernández-Villaverde, an economist specializing in demographics at the University of Pennsylvania.
Fertility is falling almost everywhere, for women across all levels of income, education and labor-force participation. The falling birthrates come with huge implications for the way people live, how economies grow and the standings of the world’s superpowers.
In high-income nations, fertility fell below the replacement rate in the 1970’s. India whose population surpassed China as the world’s most populous country last year, now has a fertility rate below replacement.
Donald Trump, this year’s presumptive Republican presidential nominee, has called collapsing fertility a bigger threat to Western civilization than Russia. A year ago, Japanese Prime Minister Fumio Kishida declared that the collapse of the country’s birthrate left it “standing on the verge of whether we can continue to function as a society.” Italian Prime Minister Giorgia Meloni has prioritized raising the country’s “demographic GDP.”
Governments have rolled out programs to stop the decline—but so far, they’ve barely made a dent.
Historians refer to the decline in fertility that began in the 18th century in industrializing countries as the initial demographic transition. As lifespans lengthened and more children survived to adulthood, the impetus for bearing more children declined. As women became better educated and joined the workforce, they delayed marriage and childbirth, resulting in fewer children.
Another factor is a society wide reorientation toward individualism that puts less emphasis on marriage and parenthood, and makes fewer children or no children more acceptable.
In research published in 2021, the University of Maryland’s Melissa Kearney and two co-authors looked for possible explanations for the continued drop. They found that state-level differences in parental abortion notification laws, unemployment, Medicaid availability, housing costs, contraceptive usage, religiosity, child-care costs and student debt could explain almost none of the decline. “We suspect that this shift reflects broad societal changes that are hard to measure or quantify,” they concluded.
New policies
Governments have tried to reverse the fall in fertility with pronatalist policies.
Perhaps no country has been trying longer than Japan. After fertility fell to 1.5 in the early 1990s, the government rolled out a succession of plans that included parental leave and subsidized child care. Fertility kept falling.
In 2005, Kuniko Inoguchi was appointed the country’s first minister responsible for gender equality and birthrate. The main obstacle, she declared, was money: People couldn’t afford to get married or have children. Japan made hospital maternity care free and introduced a stipend paid upon birth of the child.
In the U.S., while state and federal legislators have pushed to expand child-care subsidies and parental leave, they have generally not set a higher birthrate as an explicit goal. Some Republicans, though, are leaning in that direction. Last year, Trump said he backed paying out “baby bonuses” to prop up U.S. births, and GOP Arizona Senate candidate Kari Lake recently endorsed the idea.
With no reversal in birthrates in sight, the attendant economic pressures are intensifying. Since the pandemic, labor shortages have become endemic throughout developed countries. That will only worsen in coming years as the post-crisis fall in birthrates yields an ever-shrinking inflow of young workers, placing more strain on healthcare and retirement systems.
The usual prescription in advanced countries is more immigration, but that has two problems. As more countries confront stagnant population, immigration between them is a zero-sum game. Historically, host countries have sought skilled migrants who enter through formal, legal channels, but recent inflows have been predominantly unskilled migrants often entering illegally and claiming asylum.
High levels of immigration have also historically aroused political resistance, often over concerns about cultural and demographic change. A shrinking native-born population is likely to intensify such concerns. Many of the leaders keenest to raise birthrates are most resistant to immigration.
