“We have for many years addressed the very important issues of how to avoid becoming pregnant, how to avoid sexual diseases, how kids have a right to their own bodies, but we totally forgot to tell them we cannot have children forever.”
Suddenly, and it does seem to be a sudden realisation, Western countries are beginning to wake up to the fact that they are highly likely to face a problem of declining populations. Thus the head of Copenhagen University Hospital’s fertility clinic sounded the alarm in a Bloomberg interview this week, and added:
“A woman’s fertility diminishes as her eggs, present since birth, have tasted every cigarette and every glass of wine that she’s ever had.
“Men need to know that if they want to party till they’re 45, they’re going to miss the train, because when they wake up and want a family, their wives will no longer be able to conceive.”
Denmark is not alone in worrying about what will happen to its future population. As the chart above shows, based on UN Population Division data:
- Fertility rates have collapsed by 50% globally since 1950 to average just 2.5 children per woman (blue)
- Rates are down 40% in the More Developed countries to just 1.71 (red)
- They have also fallen 58% in the Less Developed countries to 2.56 children (green)
Countries need an average of 2.1 children per woman just to replace their populations. But the Developed world has been below this level since the end of the BabyBoom in 1970 (and Japan has been below it since 1955). This means it has been 45 years since the West’s populations were replacing themselves.
Globally, there is also no room for complacency. The UN figure quoted above of 2.56 children is their Medium forecast, based on a ‘best guess’ that the decline is slowing. But it will be 10 years before we know if this is right. They also produce a Low forecast, based on the view that Less Developed countries will continue to follow the Western pattern.
If the Low forecast turns out to be right, and we simply cannot know today, the World is already below replacement level at 2.05 children per woman.
THE ECONOMY SLOWS AS “YOU CAN’T PRINT BABIES”
These changes, of course, don’t just affect our personal lives. As we discuss in Boom, Gloom and the New Normal, the world went through a growth SuperCycle from the mid-1980s. This was when the vast number of BabyBoom babies reached the Wealth Creator 25 – 54 age range, when earnings and spending peak.
But now, we are on the downside of this curve. As the yellow line shows on the chart, fertility rates over the past 25 years have been at record lows. So for the next few years, no matter what now happens to birth rates, there will be relatively few young people joining the Wealth Creator generation.
We therefore don’t need to be rocket scientists to understand why the global economy is slowing. The simple truth, as Denmark has suddenly realised, is that the central banks can’t print babies.
And only babies, when they grow up, can create demand.