Global Fertility Crisis 3 – Asrar Qureshi’s Blog Post #1086

Global Fertility Crisis 3 – Asrar Qureshi’s Blog Post #1086

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1086 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com  for publishing your contributions here.

Credit: Aa Dil

Credit: cottonbro studio

Credit: Ketut Subiyanto

Preamble

While population growth is alarming for the countries and the world at large, this is one side of the picture. An even more alarming situation is the falling birth rate which has gone down drastically low. 

I am discussing this matter through drawing material from a recent McKinsey report along with articles from various other sources. Links at the end.

Support Ratios Will Continue to Fall

The world shall become more and more youth-scarce, which means that the number of workers per senior will fall. 

Support ration is the number of people of working age relative to senior citizens 65 years and older. Globally, the support ratio was 9.4 in 1997. This meant that more than nine working age people were there to support one senior citizen. In 2023, the global support ratio had fallen to 6.6. And by 2050, it is expected to fall to 3.9. 

This should also be read in reference to the rising cost of caregiving for elderly. Falling support ratio and increasing costs shall create double jeopardy.

The trend is already evident in the first wave economies where the ratio is expected to fall to two working age persons for one senior citizen by 2050. This down from 3.9 of today, already down from 6.8 in 1997. Among first wave regions, Advanced Asia, Greater China, and Western Europe will have the lowest support ratios by 2050, while the ration will fall fastest in China.

In later wave regions, the support ratio will decline from 10.3 today to 5.7 by 2050. India is at 9.8 support ratio, and it has the world’s largest population. Its current trajectory of birth rates and life expectancy, when plotted over time, indicates that its support ratio will drop to 1.9 by 2100. 

Population Mix Over Time

The world reached its maximum number of annual births in 2012, when 146 million babies were born, and the global number of births will continue to slowly decline. According to the United Nations, the total number of people on Earth will peak in 2084, at just above ten billion, and start declining in the latter years of this century.

Total population in first wave regions, however, peaked in 2020. On the current trajectory, the population of these regions will fall from 2.8 billion today to 2.6 billion by 2050 and to 1.9 billion by 2100. Only 22 of the 55 countries in these regions will have more people in 2050 than today, and populations in most of those countries will decline thereafter. Already, more people die each year than are born in 37 countries in first wave regions. Today, 60 percent of the world’s population aged 65 and older resides in these regions. By contrast, only 22 percent of those younger than 15 years live there.

Populations across later wave regions are still increasing. The second wave’s total population will reach its maximum by 2071, going from four billion today to five billion at its peak. Sub-Saharan Africa’s population will still be growing by the turn of the century and is projected to reach 3.5 billion by then, up from 1.3 billion today.

These dynamics mean that the planet’s population is shifting toward later wave regions. By 2050, a quarter of the global population will live in first wave regions, compared with 35 percent of the world’s people today. According to UN projections, these regions could be home to less than 20 percent of the global population by 2100.

Even though Sub-Saharan Africa’s fertility rate is falling fast, almost 300 of the world’s next thousand babies will be born there. Nigeria alone will become home to 57 of the next thousand—or five more than the 52 born across Central, Eastern, and Western Europe combined. Similarly, 172 of the next thousand babies will be born in India, where the birth rate overall has dropped below replacement but where the current population of women of childbearing age is still high.

By 2100, Sub-Saharan Africa will account for all of the net global population increase, doubling its current share to 34 percent. By contrast, Greater China’s share of the global population, today, the second largest among the ten regions, will shrink by two-thirds, from 18 percent in 2023 to 6 percent by 2100. This would make Greater China’s population only 170 million larger than North America’s, according to UN estimates, compared with a difference of roughly one billion people today.

Implications of Falling Birth Rates

Falling birthrates across most countries have profound implications across economic, social, and geopolitical dimensions. Here are the most significant consequences.  

Economic Impact

• Labor Shortages – With fewer young people entering the workforce, industries may struggle to find skilled labor, leading to lower economic productivity.  

• Slower Economic Growth – Fewer workers mean reduced GDP growth, lower consumer spending, and stagnation in many economies, particularly in developed nations.  

• Increased Dependency Ratios – A higher proportion of retirees compared to working-age individuals will put pressure on social security systems and pension funds.  

• Higher Wages & Automation – Labor shortages may drive up wages, incentivizing businesses to invest in automation and artificial intelligence to fill gaps.  

Social and Cultural Shifts

• Aging Populations – Societies will become increasingly elderly, affecting healthcare, housing, and urban planning.  

• Changing Family Structures – Smaller families or child-free lifestyles will redefine traditional family roles and intergenerational support systems.  

• Generational Imbalances – Younger generations will bear a heavier financial burden, leading to potential resentment or social tensions between age groups.  

Healthcare & Pension System Pressures

• Increased Healthcare Demand – Aging populations will drive up demand for healthcare services, creating financial and infrastructural strain.  

• Retirement System Crises – Pension funds may become unsustainable as fewer workers contribute, requiring higher taxes or extended retirement ages.  

Urban & Real Estate Changes  

• Shrinking Cities – Some areas may experience depopulation, leading to empty housing, declining property values, and reduced public services.  

• Housing Market Shifts – Fewer young homebuyers could reshape real estate trends, with greater demand for elderly-friendly housing.  

Geopolitical Consequences

• Declining National Influence – Countries with shrinking populations (e.g., Japan, South Korea, parts of Europe) may lose economic and political power on the global stage.  

• Immigration Policy Shifts – Nations facing demographic decline may have to adopt more open immigration policies to sustain their workforce, potentially leading to cultural and political debates.  

• Military & Security Concerns – Smaller populations may lead to weaker military recruitment and national defense capabilities.  

Potential Solutions & Adaptations

Encouraging Higher Birthrates

Governments may implement policies such as financial incentives, childcare support, and work-life balance initiatives to encourage family growth.

For instance, the South Korean government has underwritten postpartum care centers in an effort to make childbirth as trouble-free as possible.21 Hungary offers one-time cash incentives to new parents and spends almost 6 percent of its GDP on fertility and family programs overall. Several Western European countries have extended family leave policies; Norway, for instance, covers the incomes of new parents up to a maximum of 49 weeks set by its welfare system, and many Norwegian employers choose to cover any gap in income to maintain full salaries. Despite these efforts, none of these countries has managed to push fertility rates back to the replacement level, although each initiative offers insights about what does and does not work to influence fertility rates over the longer term. Research tracking these efforts suggests that, on their own, policies that have been implemented and evaluated in high-income countries to date are unlikely to lead to substantial or sustained increases to the birth rate.

Redefining Work & Retirement 

Extending retirement ages, reskilling older workers, and leveraging technology to maintain productivity. Developed countries have already increased the retirement age. In UK, the teaching cadre has no retirement age anymore and can keep working as long they can.

Embracing Immigration & Diversity

Regardless, any children born over the next few decades will not enter the workforce right away. Thus, even as countries consider steps to address population decline in the long term, they need to adapt to demographic shifts over the next two decades—the die has already been cast.

Immigration is a way to add working age population immediately. Though immigration is a touchy topic in many countries, but they do not have many other choices.

Sum Up

Falling birthrates present complex challenges but also opportunities for innovation and adaptation. Societies must rethink economic models, social contracts, and workforce strategies to remain resilient in a rapidly evolving demographic landscape.

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, Unsplash, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, however, it happens unintentionally, I offer my sincere regrets.

Reference:

https://www.mckinsey.com/mgi/our-research/dependency-and-depopulation-confronting-the-consequences-of-a-new-demographic-reality?stcr=D5B28FF38E8F4D5EBDD1CCD3F16ECB14&cid=other-eml-ttn-mip-mck&hlkid=d2b91977dece479eb99d015b3946d535&hctky=15999472&hdpid=38ebfc19-3a67-45f6-a658-c360aa81421d

https://www.theguardian.com/world/2024/nov/02/the-global-fertility-crisis-are-fewer-babies-a-good-or-a-bad-thing-experts-are-divided

https://www.news.com.au/world/below-the-replacement-rate-alarming-trend-sweeping-the-globe/news-story/12fc2a64ce97866907575469ecca3eec

https://nypost.com/2024/08/31/opinion/the-world-is-running-out-of-children/