What Will The World Look Like In 2040? Part 1--Demographics

A recent Bombs & Bants Podcast revolved around the subject of what the world would look like in 2040. And while John Wilder, his wife and I had a great discussion, time limitations meant that the topic could not be explored to the depth that we would have wished. I would like to take a deeper dive into my thoughts concerning the matter.

    I am not a prognosticator. All I can do is consider what others have written and consider trends from which it might be possible to extrapolate future conditions. This doesn't mean that the trends will necessarily continue, but it is not an unreasonable supposition that they will continue over the next 19 years.

VIDEO: "Demographic Winter - the decline of the human family (Full Movie)" (52 min.)

    The most important trends over the next decades will be demographics and declining fertility rates. While predictions of population vary according to the statistical models and assumptions, it is clear, no matter which model is used, that we will not suffer a runaway population as predicted by the "Population Bomb" doomsayers of the 1960's, 70's and 80's. 

    In his book, How Civilizations Die (And Why Islam Is Dying Too), David P. Goldman outlines the problem:

    Population decline is the elephant in the world’s living room. As a matter of arithmetic, we know that the social life of most developed countries will break down within two generations. Two out of three Italians and three of four Japanese will be elderly dependents by 2050. If present fertility rates hold, the number of Germans will fall by 98 percent over the next two centuries. No pension and health care system can support such an inverted population pyramid. Nor is the problem limited to the industrial nations. Fertility is falling at even faster rates—indeed, at rates never before registered anywhere—in the Muslim world. The world’s population will fall by as much as a fifth between the middle and the end of the twenty-first century, by far the worst decline in human history. 

    The world faces a danger more terrible than the worst Green imaginings. The European environmentalist who wants to shrink the world’s population to reduce carbon emissions will spend her declining years in misery, for there will not be enough Europeans alive a generation from now to pay for her pension and medical care. For the first time in history, the birth rate of the whole developed world is well below replacement, and a significant part of it has passed the demographic point of no return. 

    But Islamic society is even more fragile. As Muslim fertility shrinks at a rate demographers have never seen before, it is converging on Europe’s catastrophically low fertility as if in time-lapse photography. Iranian women in their twenties who grew up with five or six siblings will bear only one or two children during their lifetimes. Turkey and Algeria are just behind Iran on the way down, and most of the other Muslim countries are catching up quickly. By the middle of this century, the belt of Muslim countries from Morocco to Iran will become as gray as depopulating Europe. The Islamic world will have the same proportion of dependent elderly as the industrial countries—but one-tenth the productivity. A time bomb that cannot be defused is ticking in the Muslim world. 

    Imminent population collapse makes radical Islam more dangerous, not less so. For in their despair, radical Muslims who can already taste the ruin of their culture believe that they have nothing to lose.

Unfortunately, it is not just Islamic countries that will be caught up with rapidly ageing populations, essentially becoming old before becoming rich. Fertility rates are already collapsing across much of the third world and will eventually even overcome Sub-Saharan Africa.

    The U.N. expects the world's population to reach 9.7 billion in 2050 and could peak at nearly 11 billion around 2100. More specifically:

    The new population projections indicate that nine countries will make up more than half the projected growth of the global population between now and 2050: India, Nigeria, Pakistan, the Democratic Republic of the Congo, Ethiopia, the United Republic of Tanzania, Indonesia, Egypt and the United States of America (in descending order of the expected increase). Around 2027, India is projected to overtake China as the world’s most populous country.

    The population of sub-Saharan Africa is projected to double by 2050 (99% increase). Regions that may experience lower rates of population growth between 2019 and 2050 include Oceania excluding Australia/New Zealand (56%), Northern Africa and Western Asia (46%), Australia/New Zealand (28%), Central and Southern Asia (25%), Latin America and the Caribbean (18%), Eastern and SouthEastern Asia (3%), and Europe and Northern America (2%).

    The global fertility rate, which fell from 3.2 births per woman in 1990 to 2.5 in 2019, is projected to decline further to 2.2 in 2050. In 2019, fertility remains above 2.1 births per woman, on average, over a lifetime in sub-Saharan Africa (4.6), Oceania excluding Australia/New Zealand (3.4), Northern Africa and Western Asia (2.9), and Central and Southern Asia (2.4). (A fertility level of 2.1 births per woman is needed to ensure replacement of generations and avoid population decline over the long run in the absence of immigration.)

But these estimates are based on a "Medium Variant" where the fertility rate of Sub-Saharan Africa remains above three through 2050, and stays above 2.1 through 2100. There is a "Low Variant" model which predicts that Sub-Saharan Africa's fertility rate will be roughly 2.5 by 2050, and at 1.67 by century's end. Under that model, the U.N. predicts a world population of  8.9 billion in 2050, and 7.3 billion by 2100, with the world population peaking in 2054. In November 2012, Spanish researchers used a novel way of projecting population that indicated that the "Low Variant" prediction was probably the more accurate. (You can see the abstract of their paper here). 

    What needs to be kept in mind, however, is that many countries and regions are already below the 2.1 replacement rate and have been for decades. Their populations are already declining. For instance, the overall fertility rate for Western Europe was only 1.45 (with some countries well below that). The population of Western Europe was 196 million in 2020. In 2040, it will be 189 million. 

    But this is more than just a reduction in overall population. Because of longer life expectancies but falling birth rates, we are seeing a transition from a young population to an older population. Most significantly for the purposes of political economy, there will be fewer people of working age supporting a growing number of pensioners. As Selwyn Duke explains in his 2009 article, "Empty Cradles, Demographic Destiny and the Death of the West":

    ... Normally, a civilization can be represented with a population pyramid standing right-side-up, with the youngest people at the bottom and the age increasing as you move up (okay, we'll forget pharaoh buried underneath).  So the aged would be at the very top, with lots of youngsters down below to do civilization's heavy lifting.

    When birthrates collapse, however, this pyramid is turned on its head, with the elderly outnumbering the very young.  This usually means hardship, as the young often have to care for their elders.  Specifically, though, in our nation it means that the burden of paying an ever-increasing social security bill will fall on ever-dwindling young shoulders.  Worse still, it can create a vicious circle: as the young pay progressively higher taxes, the financial strain makes it even less likely that they will have children.  It's a recipe for the winding down of a civilization toward the nadir of non-existence. 

    Yet there are problems even when social programs are removed from the equation.  The young and vibrant are the worker bees; they are the inventors, innovators and creators of wealth.  They drive the economy.  Of course, the elderly may take jobs out of necessity or boredom, but they can match the economic engine of a peak-working-years population little more than they could match it on the athletic field.  This is part of the reason why famed economist Adam Smith taught that decreasing population correlates with economic depression.

VIDEO: "China’s economy: what’s its weak spot?"--The Economist (13 min.)

The demographic consequences on China.

    Outside Europe, one of the hardest hit regions is north-eastern Asian: Japan, South Korea, and China. In 2014, Japan had a population of 127 million. This had fallen by approximately half a million by 2020. By 2050, this will have declined to 108.5 million. China will also feel this pinch. U.N. data indicates that China's population in 2020 was 1.44 billion. By 2040, this will have shrunk to 1.38 billion. By 2100, it will have further declined to 684 million--half what it was in 2020! Charlie Campbell, writing in Time Magazine in 2019, explained:

If current trends continue, China’s population will peak at 1.44 billion in 2029 before entering “unstoppable” decline, according to a Chinese Academy of Social Sciences study released in January. The country will enter an “era of negative population growth,” the report says, warning that by 2065 numbers will return to the levels of the mid-1990s. Fewer people means less domestic consumption, and thus rapidly slowing economic growth. The ratio of young to old will be dramatically imbalanced by the rising ranks of the elderly, putting unprecedented weight on the ties that hold society together.

He notes that the precipitous decline is primarily the consequence of China's one-child policy. China went to a two-child policy in 2016, but it didn't help. "After an 8% bump in 2016–mainly women who’d waited for years to have a second child–births then fell 3.5% the following year." But that is not the sole cause. Campbell observes:

The trend is being exacerbated by China’s entry into the “middle income trap,” where rapidly developing economies stagnate as incomes reach median level and the emerging middle class start having fewer babies. Just like in the West, many Chinese women are prioritizing careers and stable home life over raising children, especially as the costs of living and education soar.

    Campbell also appears to believe that the results in China will probably be even more disruptive than in other industrialized countries.

Many seniors in China reach retirement age without having obtained the necessary capital to fund their pensions, health care and lifestyle. According to a 2013 study by Peking University, only 3% of respondents had a commercial pension and 0.2% a private occupational pension issued by a private employer. Instead, the cost of elderly care is borne by families and the state–effectively shunted to the next generation of workers. As in many Western countries, the shrinking population means fewer young taxpayers are available to prop up an older generation that is living for an unprecedentedly long time.

    He also explains that due to the one child policy, a Chinese person from an upper-middle-class or wealthy family stands to do well when their grandparents die, inheriting assets from 4 grandparents and two parents (4-2-1 as the Chinese express it). But for the poor, not so much. In addition, he notes that marriage rates are declining as divorce rates increase. On top of this, there is a large disparity between women and men of marriageable age in China. 

China has 34 million more men than women, because of a preference for male heirs and a history of selective abortions. By 2020, China will have 24 million single men of marrying age unable to find wives. Imagine the combined male populations of Texas and New York State were perpetually lonely, depressed and sexually unfulfilled. The consequences could be dramatic; multiple studies implicate gender imbalances in maladies including reduced consumption and real estate bubbles, and correlate with spikes in violent crime, spousal abuse, trafficking and prostitution.

Conversely, hypergamy means that what women China has are going to be less willing to marry. Campbell writes:

Although the highest echelons of the Chinese government are still exclusively male, women are outperforming men in education and increasingly in the workplace. Despite China’s gender imbalance and positive discrimination favoring male students, more women than men attend Chinese universities. Women are responsible for 41% of Chinese GDP–the highest proportion in the world. Some 7 in 10 Chinese mothers work. Eighty percent of all female self-made billionaires, globally, are Chinese.

Campbell concludes:

The result is a picture of China’s future that bears little relation to its leaders’ dreams of global supremacy: an increasingly unequal society of oppressed women and lonely men, many burdened by the care of elderly parents and grandparents, and an economy crippled by unsustainable debts. China’s pension shortfall could top $130 billion by 2020, according to Beijing’s National Academy of Economic Strategy, and China’s debt burden is already estimated at three times its GDP. But beyond social engineering, the government is failing to make preparations for the gray wave to come; pension reform, for example, has been torpid. “Perhaps we must wait for the next Tiananmen Square–level crisis in China for the government to finally act,” Leckie says.

    There are two major strategies countries have taken to stave off or reverse the trend toward declining populations: (i) boost fertility rates by paying women to have children and (ii) immigration. Japan has taken a third path: using robotics to make up the difference.

    Countries as diverse as Finland, Estonia, Italy, Japan, and Australia have taken to paying parents to have children or otherwise try to incentivize having children. Germany, for instance, offers paid childcare leave — up to $35,000 over the course of a year. Sometimes it works: for instance, Estonia saw birth rates edge up in 2019; in 2013, the Finish municipality of Lestijärvi, started offering women a “baby bonus” of $11,000 per child, paid over a period of 10 years, which doubled its birth rate; and France, which offers generous tax breaks and subsidies for having larger families, has a higher birth rate than much of the rest of Europe. But often the effect is temporary. The New York Times delved into this topic in a February 17, 2021, article, and noted that:

    ... Research from other countries shows that direct payments lead to a slight increase in birthrates — at least at first. In Spain, for instance, a child allowance led to a 3 percent increase in birthrates; when it was canceled, birthrates dropped 6 percent. The benefit seems to encourage women to have children earlier, but not necessarily to have more of them — so even if it increases fertility in a given year, it doesn’t have large effects over a generation.

    In addition to the international evidence, there is data on the effect of direct payments on parents in the United States. Alaskans get a payment each year, based on oil revenues. Because it varies annually and increases with the number of children, researchers have been able to examine its effect on fertility. Payments increased fertility, their studies have shown. A study that covered the years 1984 to 2010 found the increase was bigger for some groups: Alaskan Natives; those without college degrees; and unmarried women.

    “These groups had economic barriers to enacting their fertility goals, and this cash somehow was enough,” said Kiara Douds, a doctoral candidate in sociology at New York University who wrote the study with Professor Cowan.

    The Alaska data, like that of Europe, suggests that women had babies earlier, but most didn’t necessarily end up having more. The biggest increase in fertility was among people 25 to 34 and for first births, but there was little change in third births.

The reason for this is because having children has become more an issue of a lifestyle choice than an issue of cost or other socioeconomic barriers. 

    Unlike in Europe and Asia, the United States has followed a policy almost wholly concentrated on increasing immigration; the idea being, I suppose, that bringing in workers from poor, underdeveloped countries with high fecundity rates will not only keep wages low but will also ensure a future supply of workers due to the number of offspring. The consequence is that the United States has more immigrants than any other country. For instance, in a 2020 Pew report, it was observed that "[t]he U.S. foreign-born population reached a record 44.8 million in 2018." Nearly a quarter of these are here illegally, according to the same source (the actual number of illegals may be much higher). Pew also states that "immigrants and their descendants are projected to account for 88% of U.S. population growth through 2065, assuming current immigration trends continue." Between 1965 (when immigration restrictions were lifted) and 2015, "new immigrants, their children and their grandchildren accounted for 55% of U.S. population growth," adding "72 million people to the nation’s population as it grew from 193 million in 1965 to 324 million in 2015." A 2015 article from Time Magazine relates:

In 1965, 84% of Americans were non-Hispanic whites, 4% were Hispanic, and less than 1% were Asian. In 2015, the numbers are astonishingly different: 62% of Americans are white, 18% of Americans are Hispanic, and Asians count as 6% of the populace.

However, as the New York Times article cited above noted, one of the reasons that the United States has continued to see declining birth rates is because birth rates have dramatically fallen among Hispanics and teens. 

    So why the decline? Urbanization, education and literacy (particularly of women) and modernization are all factors associated with declining child births. Although governments and NGOs tend to cite the cost of having and rearing children as a barrier--and it no doubt is--what they tend to ignore is that it is also a lifestyle choice. Educated women frequently choose careers over family. And younger generations are quite blunt that they prefer the "freedom" that comes from not having children. As Goldman puts it in his book, "[i]n the industrial world today, a prospective child has to compete against material pleasure, and the child is losing the competition." Moreover, there is no incentive to have children since "[c]hildless singles who spend their money on entertainment receive the same pension and medical benefits as people who raise big families." Children have essentially become a luxury good. Or a matter of faith.

    Goldman explains:

    Children in traditional society had an economic value, as agricultural labor and as providers for elderly parents; urbanization and pension systems turned children into a cost rather than a source of income. And female literacy is a powerful predictor of population decline among the world’s countries. Mainly poor and illiterate women in Mali and Niger bear eight children in a lifetime, while literate and affluent women in the industrial world bear one or two. 

    But what determines whether it is one child or two? Children also have a spiritual value. That is why the degree of religious faith explains a great deal of the variation in population growth rates among the countries of the world. The industrial world’s lowest fertility rates are encountered among the nations of Eastern Europe where atheism was the official ideology for generations. The highest fertility rates in the developed world are found in countries with a high degree of religious faith, namely the United States and Israel. And demographers have identified religion as a crucial factor in the differences among populations within countries. When faith goes, fertility vanishes, too.

Thus, the groups we see bucking the trend are those with a high religiosity, where religion is more than attending a worship service once per week but is a lifestyle. Goldman observes, for instance, that "[o]nly a few pockets of the industrial world's population continue to raise six or more children, and they do so out of religious motivation--for example, the Amish and ultra-Orthodox Jews."

That is why the world's population outlook is not as bleak as the forecasts make it appear. Two cultures are contending at the family level throughout the world: secular modernity and renewed faith. Secular families have few children and religious families have many. That means that in each generation, religious families will increase in number and secular families will diminish. We do not know how many children raised in religious families will cleave to the faith of their parents, to be sure; the blandishments of hedonism will always be there. But it is possible that self-selection will reverse the fertility collapse of the industrial world at least in those countries that have not passed a demographic point of no return.

Interestingly, however, contrary to what you might hear in the news, the fertility rates in the majority of Muslim countries has collapsed over the last two decades, and is hardly more than in Europe. 

    Turning to the United States, a 2015 Washington Post article similarly reported:

According to Pew's data, the average Mormon can expect to make 3.4 babies in his or her lifetime. Jews, Catholics, and most flavors of Protestantism have fertility rates ranging from 2 to 2.5. At the low end of the baby-making spectrum you've got atheists, with 1.6 kids, and agnostics, who average only 1.3.

Nonetheless, the number of Americans identifying as "unaffiliated" have been increasing. "The unaffiliated share of the North American population is projected to grow over the next 40 years, according to an earlier Pew report," the Post observes. "But the unaffiliated share of the global population will decline, partially due to those low fertility numbers charted above."

    In short, in 2040, the Earth's population will be less than two decades from peaking. Japan and most European countries will have seen their populations decline versus today, with the corresponding increase in abandoned villages and properties--what native population remains will be more urbanized. China's population will have been in decline for over a decade. The increased numbers of elderly versus young workers will probably have stoked a political crises in China, the probable result of which will be the government having to take over more of a role in supporting and caring for the elderly. Whether it will be able to afford to do so is a separate question. One thing that is clear, however, is that a declining number of workers will drive up wages in China. We are already seeing industry moving to other countries in search of cheaper labor, and this trend will have greatly accelerated by 2040.

    In the United States in 2040, the population will probably still be increasing, but, like now, this will be the result of immigration not fecundity. Only, the surplus population that the U.S. will draw upon will most likely no longer be from Mexico (Mexico's share of immigration to the U.S. has already been declining) and Central America, but from Africa. Thus, I would anticipate that the proportion of the population that is black will start to edge upward by 2040. 

    I would expect that by 2040, there will be social upheaval in many countries to one extent or another when public pensions and socialized medicine become unaffordable. To compensate, many countries will have to increase taxes, which will be protested. Or cut benefits and further restrict medical care, which will be protested. Or increase retirement ages which, as we have already seen in European countries, will be protested. 

    In the United States, we will, by 2040, have seen many public employee pensions plans go bankrupt, as well as several large cities and, even states, declare bankruptcy or become insolvent--all over public employee pensions and elderly care. 

    Where populations are declining, we will see a continued decline in property prices in those areas where the young no longer want to live; primarily rural areas and outlying suburban areas, but also less desirable urban areas, such as we've already been seeing in Detroit over the last several decades. I expect that land will become very cheap in countries like Italy and Greece which have experiencing the greatest declines in fertility and will be rapidly shrinking by 2040.