Communities must prepare for below-replacement fertility levels, accompanied by shrinking workforces and increasing numbers of elderly.
By Joseph Chamie*
The fertility rate, or the average number of births per woman, is typically of little concern for government and business leaders until it brings about population decline, shrinking the labor force and substantially increasing the proportion of elderly. Decline begins when fertility falls and remains below the replacement level of about two births per woman
A half-century ago six countries – Czechia, Estonia, Hungary, Japan, Latvia and Ukraine, 5 percent of the world’s population – reported fertility rates slightly below replacement level. Today a record high of 83 countries, representing about half of the world’s population, report below-replacement level rates. By 2050 more than 130 countries, or about two-thirds of the world’s population, are projected to have fertility rates below replacement level.
Many countries manage low fertility rates for decades. The fertility rates of Canada, Germany, Italy, Japan and the United Kingdom, for example, have been below replacement level for more than 40 years. Most European countries have remained below replacement for more than 25 years. Japan in 2017 had the fewest births since official statistics began in 1899.
Future rebounds in fertility cannot be ruled out, but once fertility falls below replacement level, the trend endures. This pattern has been especially evident in countries where fertility has declined to 1.6 children per woman, including Canada, China, Germany, Hungary, Italy, Japan, South Korea and Russia. Among the factors responsible for below-replacement fertility levels are lower child mortality rates, widespread education, increased urbanization, improvements in the status of women including increased employment and economic independence, availability of modern contraceptives, delayed childbearing as well as the decline of marriage and pension systems and increased costs of childrearing. Available demographic evidence suggests these factors will persist and become widespread globally.
In many developed countries significant numbers of women remain childless. The percentage of childless woman aged 40 to 44 years in the United States, for example, doubled from 1976 to 2006, reaching over one-fifth of women. In 2010 no less than one-fifth of women aged 40 to 44 years were childless in Austria, Germany, Japan, Spain and the United Kingdom. Reasons for not having children vary, often encompassing personal, financial, political and environmental considerations.
Among women having children in developed countries, most have one or two children, with a smaller number choosing to have three or more. Countries with the lowest proportion of births after a second child in 2015 include Spain, 11 percent; Greece, 13 percent; and Italy, 14 percent. In most OECD countries, less than one fifth of births represent children beyond a woman’s second child. A notable exception to this pattern is the United States where 30 percent of births represent children beyond the replacement level.
Since the start of the 21st century, close to 20 countries have declined in population size and are aging rapidly due to low fertility levels. If current below-replacement fertility rates remain unchanged, populations of 40 countries, including China, Germany, Japan, Russia and South Korea, are projected to be smaller by mid-century. Even if fertility rates were to increase modestly, as assumed by a United Nations projection, the populations of those countries are still expected to be smaller by 2050.
More challenging for governments are projected declines in labor-force populations aged 20 to 64 years. Working-age population declines exceeding 20 percent are expected in many countries, including some of the world’s largest economies, such as China and Japan. Expected population declines are accompanied by rapid population aging.
As a result of below-replacement fertility and increased longevity, populations are becoming the oldest in human history. Increases in the proportion of elderly, those aged 65 years and older, are projected to be substantial and widespread. By mid-century, for example, the elderly are expected to account for more than a third of the populations of Germany, Italy, Japan and South Korea. The relative increase of the dependent older population has repercussions, especially regarding retirement ages, pensions, taxes, voting, health expenditures and elder care.
Some political leaders acknowledge the challenges. Paul Ryan, outgoing speaker of the US House of Representatives pointed to a need for higher US birthrates in this country: “baby boomers are retiring, and we have fewer people following them in the work force.” At the start of the year, Prime Minister Shinzo Abe labeled Japan’s dwindling birth rate alongside an aging society as a “national crisis.” Sultanka Petrova, deputy labor minister of Bulgaria, described the country’s projected decline in its working-age population as “a social and economic bomb that will explode unless we take adequate measures.”
Commenting more circumspectly, President Xi Jinping of China, which abandoned its one-child policy, said in his report to the 19th National Congress: “We will work to ensure that our childbirth policy meshes with related social and economic policies, and carry out research on the population development strategy.”
Nearly two out of three countries with below-replacement fertility have policies and programs to raise birthrates. In addition to public programs promoting marriage, childbearing, parenting and gender equality, governments try various incentives to raise fertility rates including baby bonuses, family allowances, maternal and paternal leave, tax breaks, flexible employment schedules and family-friendly work environments. Costs of those incentives can be substantial. While in some countries such as Mexico and the United States public spending on family benefits is well below 1 percent of GDP, in other countries, including Denmark, France, Sweden and the United Kingdom, family benefits amount to 3 to 4 percent of GDP. Some European countries, including France, reduce their comparatively generous family benefits to scale back budgets.
Pronatalist incentives may encourage some couples to have additional children or start families earlier than planned. Such measures by and large tend to be costly, the impact modest at best, and insufficient at increasing fertility rates above replacement levels. Powerful forces overwhelm pronatalist policies, especially economic uncertainty related to automation and the decline of good jobs and the high costs of having children.
Some governments rely on selective immigration to maintain the size of their workforce and slow the pace of population aging. However, a United Nations study concluded that current immigration levels cannot offset expected demographic declines and population aging for most countries with below-replacement fertility rates. Countries worldwide increasingly aim to reduce immigration levels and stem record flows of refugees by erecting fences and barriers, strengthening border controls, tightening asylum policies and restricting citizenship. Attempts by regional and international organizations to encourage acceptance of immigrants and growing numbers of refugees encounter fierce political resistance, public opposition and nativistic policies.
To confront decades of below-replacement fertility, governments must adjust to demographic and economic realities rather than simply promote political wishful thinkingabout increasing family sizes, as Viktor Orbán did in May when he blamed diversity and illiberal democracy for shrinking families and a fertility rate of 1.4 children per woman. A significant boost in fertility levels is unlikely, at least for the foreseeable future.
Certainly, below-replacement fertility resulting in smaller populations can lead to benefits including conservation of natural resources, enhanced educational opportunities, higher labor force participation rates, and in some instances higher standards of living. At the same time, however, the expected demographic changes for low-fertility countries pose challenges for economic growth, retirement, social security and health-care systems.
Despite more countries facing population decline and rapid population aging, world population continues to increase, likely reaching 8 billion by 2023, 9 billion by 2037 and 10 billion by 2055. This growth is largely due to the high rates of demographic growth in sub-Saharan African countries, where fertility levels are generally in excess of five births per woman. While the populations of 40 low-fertility countries are projected to be smaller by mid-century, some 25 high-fertility countries, nearly all in Africa, are expected to see their populations more than double by 2050.
For most countries, sustained below-replacement fertility rates promise population decline. Communities that refuse to adjust will only exacerbate the consequences of these powerful demographic trends.
*Joseph Chamie is an independent consulting demographer and a former director of the United Nations Population Division.