In nations both rich and poor, families are having fewer children. As people move to crowded urban areas, and as women gain more educational and economic opportunities, countries are beginning to see their populations decline. This could have grave consequences for their economies.

Global fertility rates are now only half what they were in the 1970s. Many demographers accordingly believe that the population of the world will begin to contract within the lifetime of today’s children. Before this occurs globally, the populations of many European nations will shrink, as will those of Japan, China and possibly the United States, if it is unable to sustain its traditionally high rates of immigration. Meanwhile, our average age will increase dramatically.
This will happen most rapidly in developing countries like Mexico and Iran, where, according to United Nations forecasts, the median age will increase by 20 years by midcentury as urbanization and opportunities for women increase.

WORTH FORUM Two experts differ on how the world’s waning fertility rates will impact global economic prosperity.

This trend may bring benefits. Slower population growth could ease the strain on the environment, for example. Some economists believe that countries could actually prosper as their populations level off or shrink. Yet there is no historical precedent for such a result, and there are several reasons to believe these gains will not come to pass.

Growing populations create the demand for the products capitalists sell, and supply the labor that capitalists buy. They also allow for greater economies of scale and for greater specialization within an economy, both of which improve its productivity. Perhaps most importantly, a growing population spurs innovation. It forces farmers to learn how to boost their crop yields. It impels city dwellers to find better sources of energy. Population growth may not ensure rapid technological progress, but, to date, it has been a prerequisite.

Strength in Numbers
Over the entire course of human history, up until the mid-18th century, the growth rate of the world’s inhabitants was only slightly above zero, and there were only negligible improvements in living standards. Then, Enlightenment-era reductions in infant mortality caused the population of Western Europe to surge, which in turn caused a huge increase in the rate of both economic growth and per capita consumption. A population boom ushered in the industrial age.

In 1798, Thomas Malthus, alarmed by the population growth in his native England, famously predicted that it would geometrically outpace the world’s productive capacity. But the opposite proved true. On a worldwide basis, per capita consumption increased 40 percent faster than population in the 19th century, and 34 percent faster in the 20th century. Instead of widespread famine, population growth fueled a still-expanding system of mass production and mass consumption.

This system depends on population growth. Today, as always, businesses avoid or leave areas where the number of residents is declining. Across the Great Plains, for example, where there are fewer people now than there were in the 1920s, thousands of small towns are caught in a vicious cycle of depopulation, as younger workers and local business flee in search of economic opportunity, leaving behind shuttered storefronts, empty schools and understaffed nursing homes. In Japan and Europe, where more people die each year than are born, economic growth has stagnated also, despite highly skilled labor forces and an abundance of capital.

Without population growth, economic expansion depends entirely on pushing more people into the workforce and getting more out of them each day—a requirement that in previous eras of extreme labor shortage was achieved primarily through brutal work hours, serfdom and slavery. In the future, shrinking labor pools will mean higher taxes, longer work hours and less leisure than would otherwise be possible, as fewer and fewer working-age people have to support an ever-growing number of dependent elders. The global decline in fertility is creating a world for which few individuals, and no nations, are prepared.

Additional Information
 Counterpoint: Quality, Not Quantity

Phillip Longman is a Bernard L. Schwartz senior fellow at the New America Foundation, and the author of The Empty Cradle.