Why Governments Don’t Like Low Fertility Rates

The global demographic landscape is reaching a critical point, with the fertility rate poised to drop below the level needed to maintain population stability. This trend is evident across various socio-economic groups and geographical regions. High-income countries experienced a significant fertility decline in the 1970s, with a further dip during the pandemic. This pattern is now seen in developing countries, including India, which has overtaken China as the most populous nation but currently has a fertility rate below replacement level. Economist Jesús Fernández-Villaverde warns of an impending “demographic winter” with profound economic and geopolitical consequences.

Government leaders are increasingly concerned about the implications of declining birthrates, which threaten to shrink the workforce, slow economic growth, and strain pension systems. A smaller population could diminish a country’s global influence, raising alarm among major powers such as the U.S., China, and Russia regarding their future standing. Some experts predict that the global population might begin to decrease within the next forty years, a rare event in history. Prominent figures like Donald Trump and Japanese Prime Minister Fumio Kishida have underscored the severity of the fertility decline, highlighting its potential to undermine societal stability and national security.

Despite various initiatives aimed at reversing the trend, these efforts have had limited impact. In 2017, the global fertility rate was 2.5, but it dropped to 2.3 by 2021, faster than anticipated. Fernández-Villaverde’s research suggests that global fertility may have fallen to between 2.1 and 2.2 in recent years, indicating a possible historic low below replacement levels. Organizations like the Institute for Health Metrics and Evaluation have adjusted their projections, now anticipating a population peak of 9.5 billion around 2061, followed by a decline.

In the United States, fertility rates have also plummeted, reaching a record low of 1.62 in 2022. This has significant economic repercussions, as maintaining a higher fertility rate could have resulted in millions more births since 2007. Economist Melissa Kearney notes that the gradual decline in fertility has largely gone unnoticed, exacerbating the current demographic challenges. This drop may be part of a broader “second demographic transition,” where societal norms shift towards individualism, leading to fewer marriages and children.

Changes in societal values and perceived constraints contribute to the declining fertility rates in the U.S. Although the financial cost of raising children has not significantly increased, many parents now prioritize career development, leisure activities, and relationships outside the family over having more children. Additionally, intensive parenting practices, especially among highly educated parents, further limit family size. to have only one child to better balance her professional and personal responsibilities.

Globally, factors such as urbanization and increased internet access are influencing fertility rates even in regions that traditionally had high birth rates, like Sub-Saharan Africa. Women in these areas are increasingly exposed to global cultural norms that favor smaller families and higher living standards. Once a low fertility norm is established, it becomes difficult to reverse, as societal expectations adjust. This ongoing demographic transition poses significant challenges for economic growth and social stability worldwide.