An Aging, Shrinking World Population

The United Nations “World Population Prospects 2019” is the 26th edition of the publication combing over 1,600 population censuses and result from 2,700 representative sample surveys. The current edition of this report confirms several things about global demographics. The world population is growing but at a slower rate than usual mostly caused by decreasing fertility rates and an aging population.

Since fertility rates are expected to be a major factor, countries with higher than average fertility are expected to make the largest additions to the population. The UN expects over half of population growth will be caused by 9 countries: the Democratic Republic of the Congo, Egypt, Ethiopia, India, Indonesia, Nigeria, Pakistan, the United Republic of Tanzania, and the United States of America. On the other hand, the UN sees the populations of 55 countries decreasing by 1 percent or more by 2050. The following countries are expected to see decreases of 20 percent or higher: Bulgaria, Latvia, Lithuania, Ukraine, and the Wallis and Futuna Islands.

The UN expects that fertility rate reduction will continue in the future as its "medium-variant" projection sees fertility rate falling from 2.5 in 2019 to 2.2 in 2050 and 1.9 in 2100. The projections are based on the idea that a population with a younger mix (which high fertility nations will have) will benefit from the "demographic dividend" and experience better economic development. Since economic prosperity is linked to lower fertility rates, the increase in development should push fertility rates lower. There is some uncertainty in expecting lower levels of fertility rates to stay that way. The UN reports that "women continue to express a desire for around two children" even in regions with birth rates in the range of 1-1.5 births per women. Since there is no historical precedent for such low-fertility rates, there's no reason to dismiss the idea that birth rates can rise, especially if it becomes more economically viable to have more children.

Longer life expectancies are also playing into population dynamics as humans are expected to live longer on average. The UN reported that in 2018 the 65 years and older population outnumbered the younger than 5 years population for the first time. In 2050, the organization expects the 65-year-old population to outnumber the population between 15-24 years old. Europe and North America should lead the aging trend through 2050 as estimates have these regions with about 26.1 percent of the total population above the age of 65 years. For other regions, the growth is expected to be slower like the Sub-Saharan African region, Northern Africa and Western Asia region, and Oceania.

Assuming the trend persists, the UN sees some "a profound effect on the potential support ratio" which is defined as the number of working individuals divided by the number considered elderly. Japan currently has the lowest support ratio at 1.8 an unusually low ratio for such a large nation. Twenty-nine other nations have ratios below three, but few approach Japan's number. However, projections have at least 48 countries in 2050 with support ratios under two. The trend confirms the fact that figuring out how to maintain economic prosperity at the hands of a shrinking human capital base will be one of the largest problems to solve in the 21st century.


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