Shrinking birth rates
In the last 50 years, the global fertility landscape has undergone a massive transformation, shifting from steady growth to what is now described as a universal human phenomenon of declining birth rates. To put it in an empirical context, in 1970, the average woman globally had five children, which declined to 2.2 in 2024.
Total Fertility Rate (TFR)
Why is this concerning? In general, countries need to have a total fertility rate (TFR) of 2.1 children per person who could give birth, to sustain long-term generational replacement of the population. The current global average fertility rate hovers precariously close to this threshold, and in some of the major economies, it has dipped significantly below. Consider these. In the US, the TFR has gone from 3.5 in the 60s to 1.6 in 2024. In Latin America and the Caribbean, the change was from 4.5 children per woman in the 70s to 1.9 in 2024. Asia now averages 2.1, except China, which recorded a historically low TFR of about 1.09 births per woman.
Future decline
According to The Lancet, which studied global fertility in 204 countries and territories between 1950 and 2021, “Fertility is declining globally, with rates in more than half of all countries and territories in 2021 below replacement level.” In predicting future trends, it adds that “fertility rates will continue to decline worldwide and will remain low even under successful implementation of pro-natal policies. These changes will have far-reaching economic and societal consequences due to ageing populations and declining workforces in higher-income countries…”
A panel of experts addressed these concerns at a December 12 briefing hosted by American Community Media. They included Dr. Ana Langer, Director of the Women and Health Initiative at the Harvard T.H. Chan School of Public Health and Professor Emerita in the Department of Global Health and Population, Anu Madgavkar, McKinsey Global Institute Partner, and Dr. Philip Cafaro, Associate Professor of Philosophy, Colorado State University.
Why are families shrinking worldwide?
Looking at the issue through the lens of demographics and women’s health, Dr. Langer cited various individual and societal reasons, such as demographic characteristics, ethnicity, and cultural factors, socio-economic factors, such as availability and cost of housing, childcare, and education, policy environment around sex education, family planning, and maternal health care as some of the causes for the steep decline in fertility rates.
“The Department of Labor reports that the average American family spends up to 16% of their income on daycare for one child,” Dr. Langer said. “Basics like food and housing costs are so high that it forces people to prioritize jobs and income over having children.” In the US, multiple surveys to study the falling fertility rates have revealed that experiences with difficult pregnancies and delivery, and a general weariness about the state of the world, are reasons for the change. “Over a quarter of respondents strongly agreed that overpopulation and climate change make them uneasy about raising children on a planet that is already in trouble,” she added.
Failure of pro-natal public policies
Pro-natal public policies to correct the imbalance have also been largely proven to be ineffective. Case in point – China. Concerned about declining population growth after decades of the ‘one-child’ policy, in 2015, China replaced it with a two-child policy and then a three-child policy in 2021. “China also introduced financial incentives, tax and social insurance benefits, childcare and education support, housing and living benefits, employment, and work-life balance measures, healthcare, and fertility services. But all these measures met with limited success,” Dr. Langer said.
The economic impact of ‘youth scarcity’
Anu Madgavkar, McKinsey Global Institute Partner, weighed in on the global economic impact of demographic changes due to shrinking fertility rates based on findings from research conducted by her and her team titled Dependency and depopulation? Confronting the consequences of a new demographic reality. Summarizing the implications for the global economy, she predicted:
• A slower economic growth – with a reduction in the rate of per capita GDP growth by approximately half a percentage point in the coming decades due to “a population with youth scarcity” with a “smaller share of working people in the 15-64 age cohort, and many more people over 65.”
• A rising dependency for seniors – If today we have about four people of working age available to support an older person who’s over 65, by 2050, with the current decline in birth rates, that drops to two people. “So it means that we need to be more productive to create more economic surplus to support an aging population that’s living longer.”
The share of these working-age people has peaked and is now falling in many countries, such as China, Japan, Korea, Western Europe, and the US. In many developing countries like those in Latin America and India, the peak in the share of working people is not yet reached, but is very close, said Madgavkar. “Five or six years from now, they will peak and then their share of working-age, people will also fall quite rapidly.”
• Opportunity in AI and automation – in the coming decades, nations could have a virtuous cycle of higher productivity where people who are in the workforce (provided they are upskilled) can produce more, and the aging population can also enjoy the benefits thereof.
“The idea of being more productive and raising economic growth through productivity ends up being the big potential win-win opportunity for everybody,” she concluded.
On the transformative impact of AI on the labor force, Madgavkar said, “More than half of all work hours that are done in the US economy today have the technical potential to be automated through AI or other means… But that does not mean we can do with 50% fewer workers. We’ll have to upskill people to work with AI tools. So it’s an opportunity.”
Aging in place
At a social and familial level, the impact of a shrinking population can also be seen on the quality of care the elderly receive. Addressing that issue, Madgavkar said, “I think there will be innovation and change in the social contract overall, as we consider smaller families…So let’s take the care of older people away from a public or social responsibility and back to aging in place with family support.”
The sustainability debate: produce more or consume less?
Dr. Philip Cafaro, Associate Professor of Philosophy, Colorado State University, spoke about the environmental impact of population decline as well as the influence of immigration on population and growth. He questioned the idea of production growth as ecologically sustainable and provided a contrary view.
Since the census of 2000, the US population has grown by 60 million. Cafaro maintained that the underlying cause of the “cascade of terrible environmental news” is pretty clear. “In 1925, there were around 2 billion people on Earth. Today, there are more than quadruple that number, over 8.2 billion…we have more powerful technologies, we’re much wealthier. So that’s really what’s driving our environmental problems. Humanity is generating so much atmospheric carbon because there are many more of us today,” he said.
Contrary to concerns about a half percentage point reduction of global economic growth due to continued low fertility in the coming decades, Cafaro worried more about the 2.5% or 3% annual economic growth that we’re likely to get, “because what we are doing is degrading the global ecosystem that our health and well being depends on by taking too much.”
A radical suggestion
Cafaro suggested that to start moving in a more sustainable direction, “we need to lean in to population decrease. That’s possible throughout the developed world, where fertility rates are at or well below the replacement rate…I think it’s well past time to instead be asking, what are the implications of growing or shrinking populations in terms of preserving basic ecosystem services?”
This article was written with support from the American Community Media Fellowship Program.