There is a well-established tradition in the social sciences and, more generally, in the popular media to worry about the harmful impacts of excessive population growth.
In the post-World War II era, this tradition was perhaps best exemplified by the work of the biologist Paul R. Ehrlich. He erroneously argued that in the 1970s “hundreds of millions of people” would starve to death despite “any crash programs embarked upon” at the time.
The fact that Professor Ehrlich was wrong in his apparent eschatological zeal did not bother many observers who went on to worry about the demands that excessive population growth would place on our seemingly finite natural resources.
There is no doubt that a growing population comes with environmental challenges. However, a critical issue that the world appears to be confronting today is the opposite of what concerned Professor Ehrlich and many other doomsayers: a declining global population.
Little Studied Problem
Demographers indicate that to maintain a constant population, we need to have a total fertility rate of 2.1. Now, the United Nation’s World Population Prospects 2019 shows the fertility rate is 1.8 in the United States, 1.7 in China, 1.6 in Germany, 1.4 in Japan, and 1.3 in Italy and Spain.
These numbers indicate that the total fertility rate in many of the world’s high and middle-income nations is already consistent with negative long-run population growth. Simply put, women have fewer than two children throughout much of the developed world.
In addition, almost half of the world’s population now lives in countries with fertility rates below 2.1. The clear implication is that instead of worrying about excessive population growth, we ought to be worrying about global shrinkage.
Ideas Matter
Research on economic growth sheds light on what implications this shrinkage might have on humans in the future. In the long run, all the positive impacts of a declining population may be offset by the diminution in humankind’s creative abilities.
To see why, note that ideas take center stage in driving modern economic growth, and humans are the source of new ideas. Therefore, our future well-being depends fundamentally on long-run population trends.
New ideas permit a nation’s economy to do more with less or to create novel tasks to keep labor and capital, the two most important factors of production, occupied. The resulting technological progress has led to steady growth in real income per person over the last 200 years, even though the world’s population has grown over this same time.
Two Potential Scenarios
It is possible to increase the flow of new ideas by investing more in education to improve the stock of human capital and by getting more humans to work in research and development (R&D) rather than in production.
Even though these methods generated new knowledge in the 20th century, these methods themselves are subject to diminishing returns, meaning that as the proportion of the population working in R&D rises, the productivity of each incremental researcher declines.
Therefore, a reduction in the absolute number of humans (and their brainpower) may negatively impact innovation, which may certainly reduce the likelihood of sustained growth in incomes.
As such, the world is likely to be confronted with two possible futures.
In the upbeat “expanding cosmos” scenario, total fertility settles at a sufficiently high level and thus the stock of knowledge, population, and incomes all trend upwards. In contrast, in the gloomy “empty planet” scenario, a falling population leads to fewer new ideas, living standards deteriorate, and the world’s population eventually vanishes.
What We Should Be Thinking About
The bleak “empty planet” scenario might not materialize because computing advances increase the productivity of R&D or because discoveries ultimately reduce the mortality rate to zero, thereby permitting the population to grow despite low fertility.
However, the ultimate point is that a shrinking global population may hurt us in ways that we typically pay little attention to. Therefore, we need to alter this undesirable state of affairs.
