The Demographic Crisis Is Not as Bad as It Seems, For Now
Sunday thoughts 🤔
The demographic crisis is not as bad as it seems.
Hardly a day goes by without news about how the rich world is getting dangerously old. It is a fact. Fertility rate has fallen in almost every country of the OECD, dropping below 2.1 children per woman, the threshold to prevent a population from shrinking. Elon Musk even predicted the end of civilisation if the trend is not reversed.
The first good news is that this won’t happen since other countries are booming and the world’s total population has grown at a steady pace for at least the last 10 years.
The second good news is that the drop in fertility rate in the rich world and in the US in particular can be a good thing, at least for now.
Indeed, fertility is in serious decline only among <24 women.
In 1990 teenage pregnancies in the US accounted for one in eight births. By 2022 this had fallen to one in 25. In Britain and the EU they have fallen by 69% and 58% respectively. Meanwhile, fertility rate has increased among 30+ women. Teenage pregnancies often jeopardise a girl’s future, forcing her to drop out of school or settle in a low-skilled job just to make ends meet. They usually happen among the least educated women, who are usually the most financially vulnerable too. In turn, the kids’s future is also jeopardised.
Therefore, we should celebrate this data!
Problem is, 30+ women are still not having enough kids to cover for their younger counterparts.
But it might be too early to speak. The question is whether today’s teenagers who are not having babies now will eventually have some when they get older. Or maybe, they’re renouncing to pregnancy altogether?
Governments around the world are tackling the crisis with generous cash handouts and tax breaks for young families. However, as The Economist reports, this is not helping. For example, since year 2000 France has spent 3.5-4% of GDP a year on pro-natalist measures, the highest absolute amount in the OECD. Yet, in 2022 fewer babies were born than at any point since second world war. South Korea also spends billions yet its fertility rate keeps dropping.
This is likely because the handouts go to people who would have had kids anyway. On the other hand, financial incentives don't encourage teenagers to have kids when they don't want to. And this is good!
So we can only wait and see!
oh and there’s also something called immigration, which if well managed will solve all our problems :)
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