Why the global economy needs more babies

Global birthrates have plummeted

What you probably already know: The birthrate across the globe has dropped so much, particularly in recent years, it’s threatening most major economies, which rely on the next generation to replace and support retirees.

Why? In high-income nations, the birthrate has been below the replacement rate since the 1970s. Now, that’s true across the globe. In China, it was down 16% last year, in Kenya, down 18%, according to a report in the Wall Street Journal. Estimates indicate that the global population will start to decline for the first time in modern history in 2061.

What it means: While overpopulation is a critical issue that impacts the health of the planet, the global economy relies on population growth to be sustainable. The reality is that as women have become better educated and have access to good jobs, families haven’t had as many children. Meanwhile, the cost of childcare and college has soared, leading many families to have fewer children than they did even a decade ago.

What happens now? Governments like Japan have tried to put policies in place to boost birthrates, but generally they have not been very effective. The coming economic crisis could incentivize governments to put more funding into child-care subsidies and paid parental leave. Meanwhile, this trend isn’t likely to change anytime soon. Expect labor shortages to worsen and the growing strain on health care and retirement systems to grow.