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Decades ago, while the world began obsessing over the supposed (and grossly overstated) threat to the world posed by overpopulation, a new and very different demographic problem began to emerge: plummeting fertility rates in developing countries.
The drop in the industrialized world was driven by many factors, including shifting economic dynamics, the education, empowerment and self-determination of women, shifting attitudes about family, the rise of birth control and a massive drop in overall religiosity, all of which deprioritized larger families. Those in wealthy developed countries now largely make career and family choices that are associated with economic affluence, resulting in fewer children.
This sharp demographic shift is subtly eroding the foundations of society, creating severe economic and social repercussions, posing an existential threat to the future stability of the global economy.
This is a topic I have written about before, but recently there has been renewed attention to the problem. The Wall Street Journal recently published a long piece highlighting the future demographic problems caused by falling fertility rates, declaring “the world is alarmed.” The Economist also tackled the issue this week, asking whether the rich world could “escape its baby crisis.”
The attention is justified.
In 2022, the United States recorded its lowest fertility rate ever, at 1.62 children per woman, far below the typical replacement rate of 2.1. China, long the world’s most populous nation, is losing people, and losing them fast with more people now dying than being born. Even India, which recently surpassed China in population, has seen its fertility rate fall below the replacement level.
The implications of this decline are substantial, and not well understood by the public. The industrialized nations most affected by this trend, for instance, have all built substantial welfare states. The experiment of heavy social spending is little more than 100 years old, and throughout its entire history the government largess that fueled the social safety net had been possible due to a steady (and ever-growing) stream of young workers to fund pensions and health care for an aging population.
With fewer people entering the workforce, the tax base shrinks, jeopardizing the sustainability of social safety nets. Historically, robust population growth has driven economic expansion, fueling GDP growth and sustaining tax revenues. With a shrinking workforce, as is now inevitable, this model is potentially unsustainable.
Some governments have begun to be clued into the seriousness of the problem, and have begun implementing various policies intended to increase birth rates. France, for instance, spends roughly 4 percent of its GDP annually on programmatic incentives and tax breaks, all aimed at boosting fertility. They are not alone in this effort.
But does it work? Not really. Despite these efforts, the number of children born in France in 2022 was the lowest since World War II. South Korea, having spent $270 billion since 2006 on similar incentives, has seen little improvement in its birth rate. Japan has been perhaps the most threatened nation for many years and as such has been desperately trying to improve its awful fertility rate. They had some limited success, increasing the rate from 1.26 children per woman in 2005 to 1.45 in 2015. But the increase was only temporary, and it has once again dropped back down to 1.26.
These initiatives are all well intended, and are trying to tackle a real and substantial threat to future prosperity. The cause of the problem is more fundamental to society, though, and is beyond the influence of governments. Financial incentives and state-driven programs fail to address the deeper cultural shifts that have really driven this change.
To truly combat the problem, society at large needs to recognize not only the economic and social importance of a growing population, but the inherent value of children in our individual lives. In my own life, my children have been the single most important source of happiness, personal satisfaction, pride, humor and love, and have given me far more than fame or millions of dollars ever could. I’m content, optimistic and ultimately happy, and they are the biggest reason why.
Falling fertility rates are more than just numbers on a chart, they represent a shift in what we value as a society. Many of those changing values have been essential and good, including an increased focus on education, the empowerment of women and an increasingly dynamic set of economic options for people. But as society has leaned into these changes, our attention has drifted away from our families, the very fabric of society. It is time to value it once again.
