The economics of falling populations

The Economist:

BUBONIC PLAGUE killed between one and two thirds of Europeans when it struck in the 14th century. Covid-19, mercifully, has exacted nothing like that toll. Its demographic impact, however, is likely to be significantly larger than the nearly 3m tragic deaths so far attributed to the coronavirus thanks to an associated, worldwide baby bust. Births fell by about 15% in China in 2020, for example, while America recorded a 15% drop in monthly births between February and November of last year. As a consequence, the pandemic may have brought forward the projected date of peak global population by as much as a decade—into the 2050s. A shrinking planetary population might seem like a wholly welcome thing given the world’s environmental challenges. But fewer people may also mean fewer new ideas, yielding a very different sort of future than optimists tend to imagine.

Humankind did not attain a population of 1bn until the 19th century, but the total then grew rapidly. A second billion was added by the 1920s, and nearly six more in the hundred years since. Plenty of fretting has accompanied this explosion; “The Population Bomb”, a book by Paul Ehrlich published in 1968 (between billions three and four), warned of looming global famine. Most projections before the pandemic, however, suggested that global population would plateau in the latter half of the 21st century. Some analysts have argued that our numbers will not just stabilise but decline. In “Empty Planet”, a book published in 2019, Darrell Bricker and John Ibbitson, two Canadian journalists, wrote that as fertility rates fall—a clear trend across rich and emerging economies—they tend ultimately to sink below the replacement rate of 2.1 children per woman. Nearly half the world’s people now live in countries with fertility rates below replacement levels. Barring an unforeseen demographic detour, global shrinkage looms.