• Joshua Konstantinos

The Unprecedented Demographic Boom and Bust

Adapted from chapter two of Sleeping on a Volcano: The Worldwide Demographic Decline and the Economic and Geopolitical Implications


In 1968, Paul Ehrlich published The Population Bomb. Opening with the line “The battle to feed all of humanity is over” Ehrlich argued that the increase in fertility rates and the accompanying surge in population that was the baby boom meant that “hundreds of millions of people are going to starve to death.”

In retrospect, we know this did not happen. But to be fair to Ehrlich — the scale of the baby boom was tremendous and his prediction was not unreasonable. The enormous increase in world population did not result in worldwide hunger as Ehrlich predicted, largely because of the work of Norman Borlaug, “the man who saved a billion lives .”



Norman Borlaug


Norman Borlaug was the father of the Green Revolution in agriculture. His development of high yield and disease resistant wheat strains prevented worldwide hunger and allowed the planet to feed the massive increase in population. In acknowledgement of the profound impact of his work, Borlaug was awarded the 1970 Nobel Peace Prize, the Presidential Medal of Freedom, and the Congressional Gold Medal. Without the increase in crop yields from Borlaug’s work the worldwide population explosion that was the baby boomer generation would have undoubtedly led to starvation in some areas of the world.


Yet by the time that Paul Ehrlich published his influential work, an even more unprecedented demographic change had already begun — a collapse in fertility rates — unlike anything ever before in human history.


The Scale of the Demographic Upheaval

Most people do not realize the magnitude of the post-war baby boom or the fall in fertility rates that followed it. When fertility rates fall below 2.1 births per woman (the point known as the minimum population replacement level), each preceding generation will be smaller than the last. Many nations in the developed world have been near half of the minimum replacement rate for decades, meaning that the generations after the baby boom were only just over half the size of the previous generations in many countries




Fertility Rates


When looking at fertility rates, it’s important to have some intuition on how different rates will impact future population levels. If a country has a fertility rate of 6, as China did around 1960, then the next generation will be three times larger than the generation before it. One billion people grows to three billion in a generation. Then nine billion the next, then 27 billion. The growth rate is exponential. A fertility rate of 2.1 keeps the population stable, but when it drops below 2.1 the population begins to fall exponentially.


Rates have been far below 2.1 for several generations now in most countries — and rates have continued to fall even lower. In 2017, Singapore had the world’s lowest fertility rate — measured at 0.83. Hong Kong’s more typical 1.19 fertility rate means that the next generation will be forty percent smaller than the previous generation. In this case, one billion turns into roughly 600 million, then 350 million, then 210 million. In three generations a nation with a 1.19 fertility rate will see the size of their generations fall almost eighty percent.


The graph below illustrates the impact of fertility rates on the size of the following generations. Starting with a hypothetical population of one million people, you can see that a sustained fertility rate of 3 creates a 440% increase to 4.4 million in four generations, while a rate of 1.2 leads to a generation of only 106,000 — an almost 90% decrease in four generations.



Life Expectancy

The shock of the generational population decline has been somewhat masked in total population projections by a simultaneous surge in life expectancy around the world. While fertility rates have fallen, life expectancy has continued to rise. In 1950 the average lifespan ranged from sixty to seventy years. Now life expectancy is predicted to rise to over ninety by the end of the century — an incredible fifty percent increase in human lifespans.




The abrupt plummet in fertility rates combined with the jump in life expectancy has pushed the world into a situation that is “without parallel in the history of humanity.” according to the United Nations. In the Second World Assembly on Aging in 2002, the UN reported how:

The world is undergoing an unprecedented demographic transformation. Between now and 2050,the number of older persons will rise from about 600 million to almost two billion. In less than 50 years from now, for the first time in history, the world will contain more people over 60 than under 15.

This is because the world saw one of the largest population booms and a jump in life expectancy immediately followed by a dramatic and sustained population decline caused by falling fertility rates that can only be compared to the Black Plague in Europe or the fall of the Ming dynasty in China.

Looking at fertility rates in a broader view of history shows how unprecedented this really is. For centuries the world has seen sustained relatively high fertility rates -though some nations, like France during World War I or Germany during WWII, would briefly dip below the minimum population replacement rate. After the Second World War, fertility rates began to move closely in sync, first surging higher for the post-war baby boom, and then simultaneously crashing beginning in the late 1960s.





After centuries, if not millennia, of unabated growth, the collapse in fertility rates that began in the late 1960s will bring the trend of population growth to an abrupt end. Looking at a graph of the combined population of The United States, China, India, Italy, Japan, he United Kingdom, Germany, Russia*, Spain, France, Mexico, Belgium, Australia, Brazil, South Korea, Poland, and Canada (countries who together represent 74.5% of world GDP and for whom there is accurate long-term data) we can see the imminent and unparalleled population plummet that lies ahead.



Working-Age Populations

While this graph of total population illustrates the magnitude and the unprecedented nature of the future decline in population, before the decline in total population, the crucial working-age population will begin to plummet.

A graph of the working age population of Southern Europe — the region that includes nations such as Italy, Spain, Portugal, Greece, and Croatia — illustrates the impact of the fall in fertility rates and the scale of the demographic shift facing the world.



And although the number of working-age people has already begun to fall sharply, increasing lifespans and the size of the baby boomer generation means that the number of older people will continue to increase until 2050. This lag will continually narrow the dependency ratio (the ratio between working-age people and the young and old which depend on them) of the developed world.




While the working-age population will return to 1950 levels in many countries, the elderly population will be much different than it was in the 1950s. Compare for example, the population pyramids of Japan in 1950, and what its population will look like in 2050.


Looking at the dependency ratio of various countries illustrates how the world has just entered the beginning stage of rapid aging. And this is not limited to a few select nations. Essentially every major economy is projected to age rapidly over the next few decades. With this aging, the ratio between working-age adults and the elderly over sixty-five will increase sharply. The is true even for the few nations (like the United States) who’s fertility rate did not fall too far below the minimum replacement rate — the ratio of working-age adults to the elderly has already begun to shrink dramatically.




This demographic shift is unprecedented on a scale of centuries — if not millennia. Over the next few decades its impact will swamp most other issues humanity faces as the world struggles to support an increasingly large elderly population with an increasing small working-age population.

850 views

©2019 by Cassandra Capital LLC.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.