Falling fertility rates spark warnings of population decline
Global fertility has plunged to record lows, shifting attention from overpopulation to a potential shortage of workers, taxpayers and innovators.
In a nutshell
- Global fertility rate falls to 2.3, the lowest in recorded history
- Pro-natalist policies have largely failed to reverse declining birth rates
- Financial incentives have not boosted births
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Eco-alarmist Paul Ehrlich passed away in March, and gone, too, are his catastrophic prophecies about population growth. Ehrlich’s predictions of resource depletion and rampant famine proved to be categorically false. On the contrary, fertility rates across the globe have plummeted to such a degree that demographers, economists and government officials are now warning that a shortage of human resources may jeopardize societal stability. But reflexive pro-natalist policies are proving ineffective.
The total fertility rate worldwide now hovers around 2.3 children per woman, compared with 4.9 in the 1950s. The rate represents the number of offspring born to an average woman throughout her child-bearing years – typically ages 15 to 44. The European rate of 1.4 currently ranks lowest among the continents, followed by North America, at 1.6. Africa ranks highest, at 4.1.
The 1950s fertility rate of 4.9 children per woman more than doubled the global population over five decades, from 2.5 billion in 1950 to 6.2 billion in 2000. The current global fertility rate of 2.3 children per woman is the lowest in recorded history, although population levels have remained relatively stable in recent years because a larger proportion of women are in the reproductive-age bracket – a phenomenon known as “population momentum.” Such momentum, however, is finite.
Fertility rates largely determine the age composition of a population and, therefore, are critical components of economic, political and cultural dynamics across generations. Concern is growing that the “birth dearth” will result in a shortage of the workers necessary to sustain economies, tax revenues and military forces, as well as the supply of idea generators such as scientists and inventors.
In general, a total fertility rate of at least 2.1 children per woman is necessary to maintain a population size. If current trends continue, more than 97 percent of countries and territories will fall below this replacement rate by the year 2100.
The exception to this trend is Africa. Chad, in Central Africa, ranks highest worldwide in total fertility rate, at 6.1 and with a crude birth rate of 42.4 children per 1,000 population annually (a measure that does not account for age, sex, or marital status). Sub-Saharan countries account for virtually all the top fertility rates. South Korea ranks lowest, with a total fertility rate of 0.72, or 4.6 children per 1,000 population annually.
Populations ebb and flow across time, although growth has long been the general trend. Today’s unease about depopulation is but an echo of millennia past. In 9 AD, for example, declining birth rates among the elite in Rome prompted Emperor Augustus to institute the “Lex Papia Poppaea.” The law was intended to encourage procreation by penalizing unmarried individuals and childless couples, including restrictions on their rights to inherit property and to advance through the government ranks.
Famine, war, epidemics and other shocks have also decimated populations throughout time. Western Europe, for example, lost at least a third of its people – some 50 million – to the Black Death of 1346-1353. Political brutality has proved equally devastating, if not more so. Mao Zedong’s communist regime was responsible for an estimated 40 million deaths, while Joseph Stalin and Adolf Hitler were culpable for 20 million each. Pol Pot and his communist Khmer Rouge murdered up to a third of the Cambodian population.
Myriad factors are contributing to the current decline in fertility rates, including women’s access to education and labor-force participation, more effective contraception, lower rates of infant mortality, and the decline of child labor. Like a bubbling brew of societal disruption, these and other forces have combined to radically alter historical norms of childbirth and family structure. In many ways, these factors reflect positive advances in healthcare, technology and living standards – but all pose challenges to the economic and societal structures designed for ever-growing populations.
Fertility predictors
Demographers cite access to education as the strongest predictor of fertility rates. Oxford researcher Max Roser, for example, has documented a 40-80 percent reduction in fertility rates associated with 0 to 6 years of primary schooling. The corollary proves the point: Birth rates are dramatically higher among women with less education. In Chad, for example, women attend school for an average of just three years, and only 14 percent complete middle school.
Education is likewise correlated with labor force participation; higher levels of education generally yield greater employment opportunities. In turn, professional advancement increases what economists call the “opportunity costs” of motherhood. That is, the demands of childbirth and child-rearing may detract from career focus, thereby reducing opportunities for higher earnings. These opportunity costs of motherhood are therefore highly correlated with smaller family size.
Increased levels of education and labor-force participation have been prompting women to delay marriage and motherhood. And, as the age of women’s first birth increases, the span of their fertile years – and the likelihood of additional children – shrinks.
The dramatic decline in infant mortality is also a principal factor in lower fertility rates. (The “infant mortality rate” represents the number of infant deaths per 1,000 live births.)
In pre-modern societies, more than a third of all children died before they were five years old, prompting parents to bear more offspring overall. Children were once an economic necessity, essential to tending fields and herds in pre-industrial society, and as breadwinners toiling in factories and mines after the Industrial Revolution. Over time, however, families began to reap greater benefits (future earnings) from educating children rather than from working them – a transition driven, in part, by government restrictions on child labor. Vast improvements in maternal and infant medical care, sanitation and nutrition improved infant survival, freeing parents from compensating for the risk of infant mortality.
Africa remains the only region where rates of child labor have risen. Sub-Saharan Africa accounts for more than two-thirds of the 138 million children globally who remain in labor, according to the International Labour Organization and UNICEF. Notably, Africa also suffers from the worst rate of infant mortality, at 44.1 deaths per 1,000 live births– compared to 3.1 for Europe and 5.3 in the United States – which likewise correlates with the continent’s high fertility rate.
Two other factors are often cited as contributing to lower birthrates, but their actual effects are marginal. There has been a sharp decrease in teen birthrates (ages 15 to 19), from 13.5 percent of births in 1990 to 9.2 percent in 2023. (The rates vary considerably by race and class, with teen births much higher among lower-income populations.) As welcome as the decrease may be, teen births do not materially move total fertility rates.
Similarly, critics cite abortion as a factor in declining fertility rates. But the demographic literature is decidedly mixed about any such association. To the extent that studies have documented a correlation between higher rates of abortion and lower fertility rates, the effect appears to be insubstantial.
A low fertility future
Many experts warn that population declines, if left unaddressed, have the potential to undermine economic growth, tax revenues, national security and innovation. All things being equal, the effects, although profound, are predictable:
- Smaller workforce: lower output.
- Fewer taxpayers: smaller tax base.
- Smaller proportion of working-age population: lower level of income per capita.
- Smaller population/lower income per capita: fewer consumers/less consumption.
- Aging population: heavier dependency on young workers/taxpayers.
- Fewer young: fewer military recruits; less innovation and entrepreneurship.
Most of these scenarios demonstrate a rather simple equation: Population shifts alter the relationship between net generators of societal assets and net consumers. A disequilibrium between a smaller proportion of relatively younger workers and a larger proportion of their aging compatriots will produce an unsustainable “dependency ratio.”
That disequilibrium is evident across Europe. The share of the population aged 65 years and older is increasing in every European Union country. The share of those aged 80 years or older is projected to more than double between 2025 and 2100, from 6.2 percent to 15.3 percent.
The current European dependency ratio stands at 57 percent, meaning that there are 57 “dependent individuals” (aged under 14 years and over 65 years) for every 100 people of working age (19 to 64 years old). The U.S. dependency ratio is 54 percent, roughly the same as the global average.
A smaller workforce also diminishes total economic output (although productivity gains may increase the amount of output per worker). But absent such gains, the effect of declining gross domestic product (GDP) may be substantial.
Japan offers a dramatic example. According to research by the Federal Reserve Board, the aging of the Japanese population decreased GDP by more than 20 percent, from its 1995 peak to 2015, equivalent to a loss of $2 trillion in value. Similarly, the aging of the U.S. population between 2010 and 2015 accounted for a drag on GDP growth of 1 percentage point per year (or, $314-324 billion in lost economic output).
For most of the 16 countries in the Federal Reserve study sample (all within the Organisation for Economic Co-operation and Development), the effects of aging populations on GDP growth rates are “broadly negative.”
Harder to quantify are the effects of depopulation on civic life. As recently noted by economist Jesus Fernandez-Villaverde, technology can mitigate labor shortages, but not the loss of community. As he said: “You can have the best version of Claude that can write the most beautiful code you can imagine. You can have the best version of ChatGPT that can write the most eloquent emails replying to your boss, but you don’t have a pub to go on Saturday night to meet with friends. You don’t have a gym to organize a bake sale to raise revenue for the local park. This is the type of social institutions and social network that we tend to underestimate in economics fundamentally, but that at a very basic level are absolutely essential for the life of a healthy community.”
Whether and to what degree the effects of depopulation cited above actually materialize remain uncertain. To the extent that family size is a function of individual preferences, predictions are inherently unreliable. The economic factors that drive family size are subject to the vagaries of markets, politics and history. Thus, close attention to what has been tried and – perhaps more importantly, failed – may offer the best guidance for the future.
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Pro-natalist responses
Dozens of countries worldwide have designated increased fertility as a national goal. The World Population Review lists 55 countries as adopting “pro-natalist policies,” including China, France, Greece, Hungary, Russia, Italy, Japan, Poland, South Korea and Spain.
The most common policies rely on financial “incentives” to change behavior, including subsidies for childcare, parental leave and fertility treatments. But as the following examples document, the costly pro-natalist approaches have not proven effective.
- Taiwan’s total fertility rate sank to 1.05 in 2008, prompting the government to institute a parental leave subsidy equal to 60 percent of a new parent’s salary for the first six months (and later increased to 80 percent); tax deductions for low-income families amounting to 10 percent of the annual minimum wage; and, hosting singles mixers to encourage matchmaking. Despite billions of dollars expended over 15 years, Taiwan’s fertility rate has declined to 0.7, effectively tying with South Korea as the lowest worldwide.
- Hungary’s fertility rate fell to 1.2 in 2011. Under Prime Minister Viktor Orban, Hungary spent an estimated 5 percent of GDP annually ($13 billion) on pro-natalist policies, including lifetime exemptions from income taxes for families with four or more children, debt forgiveness up to $30,000 for families with three or more children, housing subsidies for newlyweds and financial assistance for large families purchasing seven-seater vehicles. Initial results appeared promising; by 2020, Hungary’s total fertility rate rose to 1.6. However, the fertility rate has since declined to 1.3.
- Poland’s 2015 fertility rate of 1.3 ranked among the lowest in the EU. In response, the government instituted its “Family 500+” program to provide a monthly, tax-free cash payment of 500 zloty ($120-130) for children under 18. The subsidy led to a short-term increase in the fertility rate, to 1.5 in 2017, before it fell to 1.1 in 2024.
- Declaring that “Russia’s fate and its historic prospects depend on how many of us there are,” President Vladimir Putin in 2020 introduced a new package of pro-natalist subsidies totaling an estimated $6.5 billion annually. (He had instituted a one-time payment equivalent to $7,000 to families with two or more children in 2007.) In 2024, however, Russia’s total fertility rate hit 1.4, the lowest in 17 years.
- China’s total fertility rate fell by 41 percent during enforcement of its one-child policy, from 2.7 births per woman in 1979 to 1.6 in 2015. (Demographers debate the degree to which other economic and sociological factors affected the decline.) To reverse the trend, China instituted a two-child policy in 2015, followed by a three-child policy in 2021. More recently, the government introduced a $500 annual stipend for each child under three years old, subsidized maternity leave and preschool, and sponsored matchmaking services. China’s current fertility rate of 1.0 remains among the lowest worldwide.
- A 47 percent decline in Italy’s total fertility rate, from a peak of 2.6 in 1964 to 1.4 in 2014, prompted the government to initiate the “Bonus Bebe” in 2015, a monthly stipend for low-income households with children under 3 years old. This was followed by the “Mamma Domani” bonus in 2017, a one-time payment of about $1,000 for expectant mothers. Yet the fertility rate continued its fall, reaching 1.3 children in 2021. Both programs were replaced with the “Single and Universal Allowance,” cash support based on household income. Italy’s fertility rate subsequently dropped to a record low of 1.1 in 2025.
- Japan has implemented a range of pro-natalist policies since at least 1972, including monthly payments to families of about $100 for each child under 3 years old, and $67 for each child aged older than 3 and younger than 18. The national insurance system also covers 70 percent of the cost of IVF and other fertility treatments for women younger than 43 years old. Nonetheless, annual births fell below 800,000 in 2023 for the first time since 1899 – the seventh year in a row of a record-low birthrate.
The inefficacy of conventional pro-natalist policies, and the improbability that fertility trends will rebound in the near future, pose challenges to policymakers and the public. But humans throughout history have proven profoundly resilient as well as creative in adapting to changing circumstances – be they economic, political, environmental or cultural. That was, perhaps, the biggest mistake made by Paul Ehrlich and his apocalyptic adherents.
Scenarios
Most likely: Adoption of AI, automation boosting global productivity and innovation
The adoption of artificial intelligence and other automation hold great promise for increasing worker productivity and thus offset a shrinking labor force. Job substitutions will undoubtedly occur, but productivity improvements will increase profitability and firm growth and, consequently, wages. As AI lowers the cost of obtaining information and knowledge, the pace of innovation accelerates, opening new fields to employment. That compensates for the smaller pool of idea generators. Importantly, poorer nations have the most to gain from AI and automation. To the degree conditions in those nations improve, global living standards rise in tandem, further expanding markets and the world’s talent pool.
Less likely: Breaking the education monopoly amid fertility declines
In an era of fertility decline, countries face a smaller share of intellectual talent at the very time that demand for high-level human capital is growing. As it is, students in both Europe and the U.S. rank woefully low in literacy, math and science. Choice and competition in primary and higher education would likely improve instructional quality, and provide alternatives to politically skewed curriculum that lacks societal value. Yet the government education monopoly has proved resistant to change. Still, U.S. states are increasingly adopting legislation allowing families to use public funds for private school tuition. With 90 percent of U.S. students attending public school, however, universal school choice is a remote goal, at present.
Unlikely: Fiscal discipline and reduced government burden on families
Policymakers routinely ignore the costs imposed on family budgets by excessive government. The average American family pays about 29 percent of household income in federal, state and local taxes, while the EU’s average tax-to-GDP ratio hit nearly 40 percent in 2024. As populations decline, taxpayers will bear a substantially larger tax burden in the absence of government downsizing. But there is no indication that either the EU or the U.S. are committed to retrenchment. The U.S. debt-to-GDP ratio is increasing rapidly, and is projected to reach 122 percent by 2034, according to the International Monetary Fund. The European Commission reports that EU government debt hit 82.1 percent of GDP in 2025.
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