Over 70% of the World’s population live in countries that are below replacement fertility levels and this includes poor countries like India and Pakistan. 30% of the World’s population is in countries that have declining populations and this includes China, Japan, South Korea, Italy and Spain.
Replacement fertility is 2.07 which means a women will have 2.07 children on average over her lifetime. This is simply that the average women in a population must have an average of one daughter who also has children in order to have a stable population. Lifespan below immortality mean that a population might stay closer to stable for longer with long lifespans but eventually not replacing mothers with daughters causes a collapse and if not reversed it will lead to extinction.
How severe are these issues? Japan’s population peaked in 2008 at over 128 million and is now about 122 million. Japan is on track to about 100 million people in 2050. Japan’s economy peaked in 1995 at $5.5 trillion and is now $4.4 trillion. In the same time the US economy tripled. This is because of the decline in the working age population and the average age increasing from 38 to 48 in Japan. Japan’s average age will increase to 55 by 2050.
China’s population pyramid is terrible because of decades of the one child policy. China had a total fertility rate of 1.09 in 2022. China’s population is headed from over 1.4 billion today to less than 1.1 billion in 2050 and the average age will go from 38 today to 50 by 2050.
The World economy lost $5-10 trillion from 1995 to 2023 from Japan’s demographic collapse. The World economy will lose $30 trillion from 2023 to 2050 from the population aging and collapse in major countries.
It gets tougher and tougher and more and more costly to try to reverse the population avalanche.
How much would it cost now to use all financial means and policy to get to back replacement levels in 2024 and onwards in Japan and China and the other countries?
In 2020, the total fertility rate in the USA 1.71 children per woman. Getting to replacement of 2.07, we would need a 21% increase in birth rates. To accomplish this, the would need the present value of child benefits would need to increase by somewhere between 52% and 400% of household income. For the median woman, this would mean providing a child benefit for the first 18 years of a child’s life worth approximately $5,300 per year in addition to currently-provided benefits, with the range running from $2,800 more per year to $23,000 more per year. This would be $50k to 400k per extra child. In the USA, this would be to increase births from 3.6 million to 4.35 million. This would be 750,000 more babies per year. This would be constantly paying $4 billion per year and increasing to $72 billion per year by 2042 and then $150-200 billion per year in 2060. However, the actual amount might need to be four times more if women and families need more money to be willing to have babies.
In 2022, the total fertility rate in China is 1.09 children per woman. Getting to replacement of 2.07, we would need a 95% increase in birth rates. Instead of 9.5 million there would need to be 18.5 million. China’s household income is about 20% of the USA. 9 million more babies per year at $1,100 per year for 18 years of benefits. This would be $10 billion per year and increasing by $10 billion per year. This would be $180 billion per year by 2042 and $400 billion per year in 2060. The actual amount might need to be four times more if women and families need more money to be willing to have babies.
Japan’s total fertility rate, the number of children a woman has in her lifetime, likely fell to about 1.2 in 2022, the lowest in 17 years. Getting to replacement of 2.07, we would need a 73% increase in birth rates. Instead of 800,000 babies per year there would need to be 1.38 million. Japan’s household income is about 50% of the USA. 580,000 more babies per year at $3,000 per year for every year of 18 years of benefits. This would be $1.75 billion per year and increasing by 1.75 billion per year each year. This would be $31 billion per year by 2042 and $80 billion per year in 2060. The actual amount might need to be four times more if women and families need more money to be willing to have babies.
Japan paying $200-300 billion from now to 2050 would be totally worth it for the economy to stabilize by around 2040. Instead of halving by 2050, the economy might only be 30% less. It would be a 5X to 10X return every year from GDP that was saved.
China would need to pay $500 billion to $1 trillion would be totally worth it for the economy to stabilize the working age population by around 2040. Instead of halving by 2050, the economy might only be 30% less. It would be a 5X to 10X return every year from GDP that was saved.
The traditional pro-baby policies used in Sweden would likely not be enough. Free egg freezing for all women and free invitro fertilization and support and subsidies for surrogate births will likely be needed.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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Category: Science
Source: Next Big Future
