Dwindling Fertility Rates Pose Substantial Challenges for Global Economy, Report Finds

A new study indicates that declining fertility rates will trigger a significant demographic shift over the next 25 years, with profound implications for the global economy. Published in The Lancet medical journal, the research predicts that by 2050, three-quarters of countries will fall below the population replacement birth rate of 2.1 babies per female.

This demographic shift will leave 49 countries, primarily in low-income regions of sub-Saharan Africa and Asia, responsible for the majority of new births. The report suggests that these future trends in fertility rates and live births will reshape global population dynamics, influencing international relations, geopolitical landscapes, and presenting new challenges in migration and global aid networks.

By 2100, only six countries are expected to maintain population-replacing birth rates: Chad, Niger, and Somalia in Africa; Samoa and Tonga in the Pacific islands; and Tajikistan in central Asia. This changing demographic will have profound social, economic, environmental, and geopolitical impacts. In particular, advanced economies with shrinking workforces will require substantial political and fiscal interventions, even as technological advancements offer some support.

Dr. Christopher Murray, a lead author of the report and director at the Institute for Health Metrics and Evaluation, emphasized the economic implications: “As the workforce declines, the total size of the economy will tend to decline even if output per worker remains constant. Without liberal migration policies, these nations will face significant challenges. AI and robotics may mitigate some economic impacts, but sectors such as housing will continue to be strongly affected.”

Funded by the Bill & Melinda Gates Foundation, the report did not quantify the economic impact of these demographic shifts but highlighted a divergence between high-income countries, where birth rates are steadily falling, and low-income countries, where they continue to rise. From 1950 to 2021, the global total fertility rate (TFR) dropped from 4.84 to 2.23 as countries grew wealthier and women had fewer children. This trend was driven by societal shifts, such as increased female workforce participation, and political measures like China’s one-child policy.

The TFR is projected to fall further from 1.83 in 2050 to 1.59 by 2100. Despite this, the global population is expected to grow from 8 billion currently to 9.7 billion by 2050, peaking at around 10.4 billion in the mid-2080s, according to the UN.

Currently, many advanced economies have fertility rates well below the replacement rate. By mid-century, this will include major economies such as China and India, with South Korea having the lowest birth rate globally at 0.82. Meanwhile, lower-income countries are expected to see their share of new births nearly double from 18% in 2021 to 35% by 2100. By the end of the century, sub-Saharan Africa will account for half of all new births.