The Fallout of Declining Birth Rates on the Workplace

Birth rates in most developed countries are in a freefall. The United States is on the list of countries that are not producing enough children to prevent population decline.

While that may seem like good news — more to go around — it’s a big problem for economies dependent on working young people to take care of older generations and fund existing programs.

This is in sharp contrast to English scholar Thomas Malthus‘ prediction more than 200 years ago that the population was growing so fast that people would soon be starving en masse. Through the mid-20th century, he was partially right. The world’s population was growing exponentially. What Malthus and many others failed to anticipate was the decline of the births in developed countries. 

The U.S. overall birthrate fell 2% from 2007 to 2008, when about 4.2 million babies were born. This dip pushed the fertility rate below 2.1 per woman, the replacement rate that is required to sustain a population. This rate has been in steep decline for white females for several decades. By comparison the fertility rate in 1965 was 5.0 and in 2002 it was 2.8.

The fall in fertility rates has been masked by the high birth rates of Hispanics (3.1) and, unfortunately, teens. As recently as 2008, the number of births to teens ages 15 to 19was 41.5 per 1,000 teens..and that’s after a 2% drop compared to 2007.

The overall birth rate decline in developed countriesshouldn’t come as any surprise. For example, when Mathus was a teenager in 1775, British women on average bore 6 children. By 1875, the birth rate had fallen to 3.35. Today, it is less than 2.

The story isn’t much different in Germany. In 1850, the birth rate was 5 children per woman. Today it’s a paltry 1.4. In Italy, the rate went from 5 children in 1850 to 1.3 today.

The same holds true for the women in Singapore, Lithuania, Austria, Canada, Poland, South Korea, and nearly 65  countries. In some countries, the rate has fallen to one child per woman per lifetime. Since every child is actually replacing two parents in the next generation, it’s easy to see how quickly a country’s population can plummet.

Japan is one of the most striking examples of what happens when a population stops growing. Its population is expected to fall by 21% in the next 40 years. By then, 40% of the population will be made of people older than 65.

Europe’s population will peak by 2020 (the European Union as a whole has a very low total fertility rate of 1.5!).  The population will drop 16% through  mid-century. Germany, Poland and Russia will be down by more than 20%. Germany’s over 65 population has already reached 20% and is expected to exceed one-third by 2050. In Italy, more than one-fifth of all Italians are living on a pension.

The problem isn’t isolated to developed countries. Developing countries like Mexico, Egypt and India also face an aging population. Mexico had a birth rate of almost seven children per woman just a few decades ago. It’s now 2.3. Egypt went from seven children to 2.7. India is down from six to 2.7 births per woman. Even China’s birth rate, thanks to their one-child policy, is a paltry 1.75.

What do you think this means for their economies, communities and society?  What does this mean for Generation Y and future generations?


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