In 2019, the Institute for Family Studies published research saying that U.S. birth rates have fallen to all-time lows. And it wasn’t just in the U.S., global birth rates were declining as well, and this was pre-pandemic. So, with all the people staying home with nothing to do during the pandemic there was a massive increase in births, right? No, not really. Instead, births continued to decline. Research from the World Economic Forum expects 23 countries to lose half their population by 2100, including Spain, Portugal, and Thailand.
Even China is worrying about a decrease in population. In May of 2021, the Chinese government announced that parents in China can now have up to 3 children. This announcement came only five years after the stunning reversal of the 1980 one-child policy. According to China’s most recent census, the Chinese population decreases by about 400,000 people per year. But this is only the beginning. If this trend continues, China could lose between 600 and 700 million people from its population by 2100. That is half its current population.
In order for a population to stay the same, each woman on average has to have 2.1 children. The U.S. currently has a birthrate of approximately 1.8, Germany’s birthrate is about 1.6, and Italy and Spain have a birthrate of about 1.3. Surprisingly it isn’t just the rich countries that are failing to reproduce themselves. Brazil’s birthrate is around 1.75, Costa Rica is 1.66, Malaysia has fallen to about 1.8 and Thailand is even lower, at 1.5 kids per woman. South Korea’s birthrate is below 1! Japan’s birthrate has actually been increasing since it bottomed at around 1.3 in 2006, but that is a result of a massive government program encouraging women to have more babies. But even that hasn’t been able to raise the birthrate above 1.5.
Factors Resulting in Falling Fertility
There are a variety of reasons why women are failing to have more children. The first is growing urbanization. For people living in rural locations, children are an economic asset (i.e. more free labor), but when they move to an urban setting, children become a financial liability (i.e. more mouths to feed). And over the last 60 years, there has been a massive migration to cities. In 1960, one-third of humanity lived in a city. Today, it’s almost 60%. Economic uncertainty also reduces fertility. This was exhibited during the breakup of the Soviet Union as fertility rates decreased drastically when people were unsure if they would be able to feed their children.
A recent Brookings Institute study showed that COVID fears resulted in 300,000 babies not being born in the U.S. alone. Other factors include increased infertility among women due to chemicals in the environment and age-related fertility issues due to women waiting longer to try to get pregnant. For the first time in history, more than half the women are still childless at the age of 30. At that point, even if they decide that they wanted to become pregnant, it would be more difficult, with as many as 30% of women over 30 having difficulty becoming pregnant.
Well, The World is Over-Crowded Anyway, So Isn’t This a Good Thing?
With fewer children being born, the population ages. In 2019 the UN reported that “The number of persons aged 80 years or over is projected to triple, from 143 million in 2019 to 426 million in 2050.” An aging population creates certain problems. The first is Low productivity and lack of labor supply. Older people can’t work as hard or long as younger people. They want to retire, relax and be net consumers, but someone has to produce the goods they consume. Who is going to support all these old people? Recently, we’ve seen what a Labor Shortage looks like due to what Larry Summers calls “a massive, overheated labor market,” i.e., the FED stimulated the economy so much that companies can’t produce enough stuff to keep up with demand. So, although the cause may be different, the result indicates what we can expect if demographics cause a lack of labor. We could see companies competing for labor with higher salaries, resulting in higher prices and a massive squeeze on people on “fixed incomes”.
Typically, older retired people live off their savings. As these savings are consumed, it could result in a decrease in liquidity in the system, resulting in less capital formation, fewer entrepreneurial activities, and fewer innovations. There would also be a higher burden on the healthcare system as the aging population needs more healthcare per capita. Since retired people have less income, tax revenues decrease, creating budget deficits which could result in curtailed government services.
After decades of promoting lower birth rates and increased abortions, our society may have finally gotten what it wanted, but we may be sorry. But many who have long beat the drum for population control are not convinced. Berkely recently published an article entitled, Birth Rates are Declining Rapidly! Don’t Panic. This article denies the seriousness of these statistics reminding us that the population has doubled since 1968. So you might wonder what would be so bad about returning to the 1968 world population. Theoretically, the problem isn’t the actual level but getting there that is the problem. Other articles assume that if the government creates the right incentives, people will have more kids. But no matter how many incentives the government creates, it won’t enable infertile couples to have more babies. Finland is a prime example, it has generous maternity and paternity benefits, day-care subsidies, and every other baby-making incentive imaginable, and their birth rate is still declining.
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