In the roughly 250 years since the Industrial Revolution, the world's population, as well as its wealth, has skyrocketed. However, it is possible that, before the end of this century, the number of inhabitants of the planet will be reduced for the first time since the Black Death. The cause is not an increase in deaths, but a drop in births. In much of the world, the fertility rate (ie the average number of births per woman) plummets. While the trend is familiar, its scope and consequences are not. At a time when artificial intelligence arouses growing optimism in some quarters, falling birth rates cast a shadow over the future of the world economy.
In the year 2000, the world fertility rate was 2.7 births per woman, well above the 2.1 “replacement rate” at which a population remains stable. Today it is 2.3 and continues to drop. The 15 countries with the highest GDP have a fertility rate below the replacement rate. Among them are the United States and much of the rich world; but also China and India, two countries that are not rich, but together account for more than a third of the world's population.
The result is that, in much of the world, the scurrying of little feet is drowned out by the tapping of walking sticks. The main examples of aging countries are no longer just Japan and Italy, but also Brazil, Mexico and Thailand. By 2030, more than half of the people in East and Southeast Asia will be over 40 years of age. Populations are likely to decline as the elderly die off and are not fully replaced. Outside of Africa, the world population is projected to peak in the 2050s and end the century smaller than it is today. Even in Africa itself, the fertility rate is rapidly declining.
Despite what some environmentalists say, population decline creates problems. The planet is far from full, and the economic difficulties derived from a smaller number of young people are multiple. The most obvious is that it is becoming increasingly difficult to support the world's pensioners. Retirees use the production of those who are of working age, either through the state, which collects taxes from workers to pay for public pensions, or by drawing on savings to buy goods and services or because family members provide non-profit care. paid. The rich world today has about three people between the ages of 20 and 64 for every one over 65, but by 2050 it will have fewer than two. The consequences are higher taxes, later retirements, lower real returns for savers, and possibly government budget crises.
The low ratio between workers and pensioners is just one of the problems resulting from the collapse of fertility. Young people possess in greater abundance what psychologists call "fluid intelligence," the ability to think creatively to solve problems in novel ways.
That youthful dynamism complements the accumulated knowledge of older workers. It also brings changes. Patents filed by younger inventors are much more likely to cover breakthrough innovations. Older countries (and their young ones too) are less entrepreneurial and less comfortable taking risks. Older constituencies also ossify politics. Since the elderly benefit less than the young when economies grow, they have proven less supportive of pro-growth policies, especially housing construction. Creative destruction is likely to be rarer in aging societies, impeding productivity growth in ways that result in a huge missed opportunity.
For all these reasons, it is tempting to view low fertility rates as a crisis that must be resolved. However, many of its underlying causes are themselves welcome. As people have gotten richer, they have tended to have fewer children. Today they face different balances between work and family, and for the most part they are better. The populist conservatives who maintain that low fertility is a sign of the failure of a society and call for a return to traditional family values are wrong. Having more options is good, and no one is forced to raise children.
The liberals' drive to encourage more immigration is nobler. However, it is also a misdiagnosis. Immigration in the rich world is now at a record level, helping countries cope with labor shortages. Now, the global nature of the fertility decline means that, by mid-century, the world will likely face, unless something changes, a shortage of educated young workers.
What could I suppose? People often answer in surveys that they want to have more children than they have. This gap between aspirations and reality could be partly due to the fact that parents-to-be (who actually subsidize future childless pensioners) cannot afford to have more children, or to other political failures, such as housing shortages or poor treatment. inadequate fertility. Still, even if these problems are fixed, economic development is likely to lead to fertility falling below the replacement rate. Family-friendly policies have a disappointing record. Singapore offers large benefits, tax breaks and childcare subsidies, but its fertility rate is 1.0.
Unlocking the potential of the world's poor would alleviate the shortage of young, skilled workers without the contribution of more births. Two-thirds of China's children live in the countryside and attend schools that are mostly deplorable; in India, the same fraction of 25-34 year olds have not completed upper secondary education. The African youth population will continue to grow for decades. Raising their skills is a desirable end in itself, but it could also turn more young migrants into innovators in otherwise stagnant economies. However, it is not easy to encourage development; and the sooner places get richer, the sooner they get old.
Consequently, the world will eventually have to make do with fewer young people and perhaps with a shrinking population. For all these reasons, recent advances in artificial intelligence could not have come at a better time. A super-productive economy based on artificial intelligence will easily be able to support a larger number of retirees. Over time, artificial intelligence will generate ideas on its own and reduce the need for human intelligence. Combined with robotics, artificial intelligence will make caring for the elderly less labor intensive. There is no doubt that these innovations will be in high demand.
If technology enables humanity to overcome the birth decline, it will conform to the historical pattern. Unexpected productivity gains defused demographic time bombs, such as the catastrophic famine predicted by Thomas Malthus in the eighteenth century. Fewer babies means less human ingenuity. However, that problem could be fixed thanks to human ingenuity.
