The world needs to make more babies because underpopulation is the forecasted problem a few decades from now. It's a continuation to my adventures in learning macroeconomics for a hobby.
Less people, less pollution, less competition for resources, and less chances to find your soul mate. It sounds great until one realizes that having an aging population is just as problematic as overpopulation.
As of 2022, Philippines has a reported 1.9 fertility rate according to the Philippine Statistics Authority
The total fertility rate in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates. It is calculated by totalling the age-specific fertility rates as defined over five-year intervals. Assuming no net migration and unchanged mortality, a total fertility rate of 2.1 children per woman ensures a broadly stable population. Together with mortality and migration, fertility is an element of population growth, reflecting both the causes and effects of economic and social developments. The reasons for the dramatic decline in birth rates during the past few decades include postponed family formation and child-bearing and a decrease in desired family sizes. This indicator is measured in children per woman.
Fertility Rate Definition
We need it at least 2.1 to replace people that died and keep the population stable (assuming migration, and death rates remain constant) because falling under this number means we're going to have an aging population in decades time.
The graph below shows a trend all over the world where countries show a steady decrease in fertility rate. I highlight Japan (red) and Korea (Blue) because these two are often the countries mentioned that are having problems with replacing the population. It's not really an understatement that given in a few decades time native Koreans and Japanese would face extinction unless more babies are born.
OECD (2024), Fertility rates (indicator). doi: 10.1787/8272fb01-en (Accessed on 29 March 2024)
The graph shows the age specific fertility rates for women. Ages 20 to 39 are what I find significant, well they all are but this age range is when working age women develop their careers.
Below is a percent distribution of currently married women aged 15-49 by desire for children, Philippines 2022.
Almost half already want no more children. We'll this isn't the total picture because the survey only states married women. So women who are unmarried and have children may skew the distribution.
At least the survey shows support for the declining fertility rates. It's just costly to raise a family and women now are more educated and are driven to be career oriented than decades ago.
How does underpopulation affect the economy?
There will be less people in the working age group and that is detrimental to the economy's productivity. If the Philippines remains a consumer driven economy, how do you think businesses who rely on people buying their goods will survive if there are less and less people to sell their goods?
There's also the real estate problem. I'm sure some people who heard of investing in real estate because the prices for land eventually go high over time took some mortgages. If you're buying a house to stay in, there maybe some merit to acquire it now before inflation eats up your purchasing power. But for real estate investors that bought some house and lot, condominium units to sell higher or commercial buildings for office renting spaces, who do you think would be buying up those properties if there were less in the working class to afford them?
The current projections show that it's going to be a problem at the mid century when population of 8+ billion people are around then it proceeds to go downhill from there. We may see deflation rather than inflation because there's going to be less demand and growth now that the economy has less work force to maintain it's productivity and people that will demand goods and services.
If you're within the working age group now, reaching 2050's would matter a lot because you're getting or at your retirement age. If inflation hasn't been good, expect the costs of health care to eat up what's left of your pension. It's going to be a heavy adjustment to your lifestyle especially when you're used having a regular wage. You're still eligible for voting and probably favor politicians that would support laws that increase your senior citizen's benefits.
But that's also the problem because these laws need some tax payer funding and who do you think would be shouldering those costs by then? the younger generation and their numbers are lesser to sustain the economy. I haven't even started with mentioning the projected health care costs in the aging population especially from chronic diseases, and things like clinical depression will be a norm than it is right now. Experts could still get it wrong just as how previous forecasts foretold about the exploding overpopulation since the 1970's leading up to this point.
Well, you know how some futures foretold never happen? if someone told you you're going to to get hit by a bus tomorrow, and you opted to stay at home the next day, what are the chances of that prediction ever happening? I think that's what happened when overpopulation became a forecasted threat in the past, there were national to global programs implemented to control overpopulation like family planning.
Solutions to the problem can include reducing taxes for people raising families, improve the country's existing infrastructure and convince people from other countries to live here, convince people to remain working here, and a load of incentives to make more babies.
Who's to say the future is set in stone when it just looks bleak right now? I mean, if the previous forecast says we're heading for overpopulation and deflation but turned out different now, there's also a chance to change that possible future.
Thanks for your time.