By: Charlotte Plaskwa
For much of the 20th century, policymakers feared the consequences of overpopulation. Fears of food shortages, mass unemployment, and unsustainable urban expansion led governments from China to India to impose measures to try and slow down birth rates. But in a striking demographic reversal, the world is now facing the opposite problem: not enough babies. Across developed nations, fertility rates have been in freefall for decades, and despite aggressive policy interventions, nothing seems to be reversing this trend.
Globally, the average number of children born per woman has dropped from 4.7 in 1950 to just 2.3 today—and it is expected to fall even further. By 2100, nearly every country on Earth will be below the so-called replacement rate of 2.1, the level needed to keep populations stable without immigration. In some nations, the decline is already at what demographers call “ultra-low” levels. South Korea, for example, recorded a fertility rate of just 0.72 in 2023 (less than half the replacement level) while Japan and Italy are not far behind. If current trends persist, more than 20 countries, including China, will see their populations halve by the end of the century.
The reasons behind the collapse in birth rates are complex and vary by region. Historically, female education levels were the strongest predictor of fertility rates; when women gained more access to schooling and employment, they tended to have fewer children. That pattern remains true in much of the world, but recent studies suggest that the decline in fertility is no longer confined to highly educated women. Instead, birth rates are falling across all social and economic groups, suggesting a deeper transition in the way people think about family and parenthood.
Economic pressures play a role. The cost of raising children has soared, particularly in high-income countries where wages have stagnated while housing, education, and childcare expenses have skyrocketed. In the UK, the average cost of nursery care for a child under two now exceeds £15,000 per year, while homeownership is proving to be out of reach for the younger generations. In the US, the estimated cost of raising a child to adulthood is now over $300,000, a daunting sum for many young couples facing rising living costs. Across Europe and East Asia, housing shortages, precarious job markets, and lack of affordable childcare are discouraging would-be parents from starting families.
Workplace dynamics further exacerbate the problem. Despite the decades of progress on gender equality, the task of child-rearing still falls disproportionately on women, often at the cost of their careers. Researchers have identified what they call the “motherhood penalty,” where women’s earnings and career progression take a significant hit after having children, while men’s remain largely unaffected. This economic trade-off is leading many to delay parenthood until their late 30s or even give it up altogether.
But financial concerns are only a part of the story. Cultural attitudes toward family have changed dramatically over the past few decades. Marriage rates are declining, and more people (especially millennials and Gen Z) report feeling ambivalent about having children at all. A study by the UCL Centre for Longitudinal Studies found that even among British millennials who say they want children, only one in four are actively trying to have them. Some point to concerns over work-life balance, others say they just haven’t found the right partner. In South Korea and Japan, strict working cultures make balancing a career and a family particularly difficult. In China, despite the government scrapping its one-child policy, birth rates continue to decrease, suggesting that cultural norms have relocated permanently toward smaller families.
Governments have tried to intervene, with mixed results. From cash bonuses to subsidised childcare, policymakers have spent billions trying to encourage people to have more children, but the data suggests these efforts haven’t had much lasting impact. In Finland, one small town offered €1,000 per child annually for ten years, however its population continued to shrink. China is offering free fertility treatments, Hungary has introduced tax exemptions for large families, and Japan is funding AI-powered matchmaking in hopes of encouraging people to marry. Denmark even ran a national ad campaign urging its citizens to “Do it for Denmark.” None of it seems to be working.
The economic consequences of declining fertility are profound. As populations age, the ratio of workers to retirees goes down, placing enormous strain on pension systems and healthcare infrastructure. By 2050, in Eastern Asia, the number of working-age adults per retiree is projected to collapse from 10:1 to just 1:1. With fewer taxpayers supporting a growing elderly population, public finances will come under severe pressure. A report by S&P Global estimates that without policy action, fiscal deficits could surge from an average of 2.4% of GDP today to 9.1% by 2060, while global government debt-to-GDP ratios could triple.
Productivity growth could, in theory, offset some of the damage, but achieving that will not be easy. A January report by McKinsey found that in order to maintain historical improvements in living standards, countries like the UK, US, and Japan would need to double their productivity growth rates; an ambitious target in an era of slowing technological and economic expansion.
Some argue that immigration could provide a solution, replacing dwindling workforces with younger workers from high-fertility regions such as sub-Saharan Africa. But politically, large-scale migration remains quite a contentious issue, particularly in Europe and North America, where populist movements have gained momentum in response to rising immigration levels. In France, President Emmanuel Macron faced mass protests in 2023 after raising the retirement age from 62 to 64, a move seen as necessary to counteract declining birth rates.
While much of the world struggles with falling birth rates, Africa’s population is booming. By 2100, the region is expected to account for more than half of all births worldwide. This demographic shift could change the global economy and geopolitics as we know it, as Africa’s young workforce rises while other regions age. Some analysts warn that without adequate investment in education and job creation, the region could face severe economic and social instability.
Ultimately, the question is not just whether birth rates can be increased, but whether our societies can adapt to a world with less children. Some see the trend as a crisis, threatening economic stagnation and declining living standards. Others think it is an opportunity that could potentially lead to a world with less strain on resources and greater gender equality. Countries that invest in policies supporting working parents, such as affordable childcare, flexible work arrangements, and more equitable parental leave, may be able to soften the impact of demographic decline. Those that fail to act risk economic malaise and social unrest.
Either way, the era of rapid population growth is over. The global birth rate crisis is a transformation that will define the coming century. Whether it leads to decline or adaptation remains to be seen.
The views expressed in this article are the author’s own and may not reflect the opinions of The St Andrews Economist.
Image via The Financial Times