An economy needs population growth and new family formation to generate economic growth. As appealing as it sounds to imagine fewer people, smaller crowds and less congestion on roads and in airports, the dangers of a shrinking population (like the dangers of deflation) are less advertised by doomsday writers, but equally (or even more) dangerous.
When it comes to “total fertility rate” (TFR, the number of births per woman), demographers say we need at least 2.1 births per female just to maintain our current population level (the last 0.1 mostly accounts for infant mortality). Last year, the overall global TFR rate was 2.24, but if you omit Africa, the TFR rate is well under 2.0. Most of the largest advanced industrial nations reported TFR rates under 2.0 during 2025:
No major developed (rich) nation has averaged a TFR over 2.1 (replacement level). Except for Africa, the world is shrinking. Back in 1950 through 1970, the world’s richest nations averaged over 2.7 births per woman, then averaged only 1.6 births per woman since 1995, with an all-time low at 1.5 from 2020-2025.
As a whole, world population is slowly increasing – due mostly to Africa and the longer lives of our elderly – but Asia’s two-biggest economies – China and Japan – are shrinking in population, which implies a limited capacity for economic growth. More seriously, the fewer younger workers in those nations can’t afford to underwrite the costs of servicing their long-living (and often ill) elderly forebears.
China has repudiated its long-held “one child” policy, but the habit stuck. Young couples don’t want even one child these days. They want more work and bigger paychecks, while the fruits of the one child policy sowed seeds of a major problem – of couples (pre-2010) discovering the sex of their embryo and aborting girls so they could raise a “Young Emperor” to support them in their old age. This created a dangerous surfeit of male children (118 males to 100 female births from 2002 to 2008) with fewer females to marry.
A typical household in China in 1996 was seven: four grandparents, two parents, and a spoiled, coddled “Young Emperor,” whom all six adults relied on for their security in old age. This inverted demographic pyramid doesn’t add up, financially.
Europe is even worse off in the fertility sweepstakes, averaging just 1.4-children per woman, and Europe has an even more generous safety net of old age pensions. This is why Europe has delegated its security costs to the U.S, a strategy which may backfire as President Trump insists, they fund their own defense.
The United States is in better shape than Europe or Asia – partly due our fairly rapid assimilation of immigrants and high family formation rates in our more conservative regions of the nation – but with the President’s new limitations on immigration, while capturing and shipping out undocumented workers – I have to wonder if we have enough willing young workers to fill up all those new “on-shored” factories.
There is another time bomb implanted in these charts and trends. Social Security (and Medicare) is a time compact between generations, with younger workers funding the immediate needs of the elderly and their rising medical costs. Unlike a 401(k) or IRA, these aren’t savings accounts but are unfunded entitlements based on past demographic trends of higher birth rates. With the current generations less likely to marry and have children – also, less likely to create lucrative careers instead of “gig” jobs – we will face major challenges in funding these future benefits for those unwilling to beget new Americans.