Adapt or Suffer: Demographic Change and Consequences for the United States.

• Author: Grennes, Thomas
• Position: BRIEFLY NOTED

Major demographic changes are occurring throughout the developed world. Although world population has doubled in the last 50 years and grown almost continuously since at least 10,000 B.C.E., prominent demographers are now projecting a forthcoming peak in world population and a subsequent decline. The United

Nations estimates the peak will come around 2100 while a group at the University of Washington says it will happen around 2060. Though skepticism is appropriate for projections about the distant future, these estimates incorporate large reductions in total fertility rates (TFRs) that have been occurring for years in nearly all the high-income countries in the world, including the United States.

Declining fertility / TFR measures the number of children born to an average woman over her lifetime. A TFR of roughly 2 is necessary for a country to maintain a stable population (in the absence of immigration), with the offspring replacing their mother and father.

The TFR for the United States was 1.7 in 2019, the lowest in U.S. history. This is not a blip; the U.S. TFR has been declining continuously from a peak of 3.7 in 1960, and it has been below 2.0 since 2010. If it continues at this rate or below, the U.S. population will decline unless there is offsetting immigration. This same trend is occurring in other high-income countries around the world.

Slow or declining population growth is new to the United States and to the world. Negative consequences from this demographic shift have already occurred, and the problems will get worse unless there are major reforms in economic policy. The rate of economic growth has already declined in the United States from its earlier 3% to 2%, and the latest Congressional Budget Office (CBO) projection is for 1.6% annual growth over the next 30 years. A total fertility rate below the replacement rate contributes to aging of the population, and a smaller and older population reduces the rate of economic growth. Countries like Japan, Italy, and Russia, which are experiencing decreasing population, have had very little economic growth as a result.

Declining standard of living I A country's gross domestic product can be expressed as the size of its labor force multiplied by its average productivity of labor. A lower fertility rate lowers the population, which in turn reduces the labor force about 20 years later. A smaller population reduces GDP directly, and aging further reduces GDP by shrinking the size of the...