An interesting trend with major ramifications is going on around the world, and this important development isn’t receiving nearly the coverage it deserves in the press. The world population is going to decline, and it’s already starting to happen.
That might not seem like a big story, but it is.
This presents political, cultural, and environmental challenges for policymakers. No doubt when the politicians do start to pay attention to the declining population conundrum, they will enact some policy that will make it worse…that’s what they do best.
The reason is simple, but the reasons for the decline aren’t. It is basic math: Women are having fewer children, and as more people die, there will be fewer people to replace the deceased. The statistical replacement rate for population growth is 2.1 children per mother.
According to the New York Times (who did a rare piece of good reporting), “nearly everywhere else, the era of high fertility is ending. As women have gained more access to education and contraception, and as the anxieties associated with having children continue to intensify, more parents are delaying pregnancy and fewer babies are being born. Even in countries long associated with rapid growth, such as India and Mexico, birthrates are falling toward, or are already below, the replacement rate of 2.1 children per family.”
There are even projections that Nigeria (Africa is the exception to the rule with mothers still giving birth to more than 2.1 kids) will have a higher population than China by the end of the century. China’s current population stands at 1.41 billion, so that is an alarming projection.
Demographers are now predicting that the world population could begin to decline by the second half of this century, a drastic reversal from the world population increase of the 20th century which saw the world population increase from 1.6 billion in 1900 to 6 billion in 2000.
The United States also saw the second-lowest population gain in the history of the country going back to the first census in 1790. America has been able to slow the negative effects of population growth because of the large number of immigrants who still move to the country.
If America is such a horrible place, then why do so many people still move here? But I digress…that is a discussion for another day.
Lower birth rates will also present challenges for America’s budget. As more people retire, and birth rates continue to decrease, there will be fewer workers to pay into social security, which will lead to the government borrowing even more and increase the probabilities of insolvency and hyperinflation.
Global economic growth will be imperiled as well. Economic growth has long been associated with population growth, contrary to what Malthus once predicted about the dangers of increased populations leading to a decline in economic growth and a shortage of resources and goods.
Several economic studies have found a positive correlation between population growth and economic growth, including a published study by Mexican professors, Jacob Pegou Sibe, Cesaire Chiatchoua, and Marie Noel Megne, who tested the economic growth rate of the 30 largest nations in the world.
This makes sense if you keep in mind that economic productivity is required for economic growth and an increase in standard of living.
The more people there are living, the bigger pool of people there are who can develop an idea that will lead to innovation that will increase productivity, economic growth, and standard of living. Think what an invention like the internet has done for all three, and you will understand the significance of the “fishing out of the pond” effect.
Simeon Adler, a visiting assistant professor at the University of Wisconsin described the “fishing out of the pond effect” this way: It gets harder and harder to find new ideas, and you need more researchers and more bright minds to come up with new ideas that can fuel economic growth. And in that kind of world, it does turn out that economic growth in the long run does actually require population growth.”
The decline in world population will have significant ramifications for the world. Time will tell how the world responds, but one thing is for sure: We are living in unprecedented times.