Making Sense of Global Demographic Megatrends

Introduction

For decades people have warned that our rapidly growing global population is stressing the planet’s resources, dooming us to a gloomy fate. Those predictions haven’t come true, because humanity has always managed to develop more efficient ways to use natural resources. But you don’t need to be a cynic to understand why it’s important to study global population trends, especially in terms of economic development and sustainability.

The impacts aren’t all negative. For instance, the rapid population growth we see in developing countries will increase the amount of available labor there, which creates opportunities to boost economies and reduce poverty. Developed countries, however, will see their populations stagnate and even decrease, which pose long-term risks. Timely and accurate population estimates, then, are critical to policymakers and anyone with a stake in global development.

That’s what we’re going to address here. This June, the Population Division of the U.N. Department of Economic and Social Affairs released its latest revision of World Population Prospects, the most widely cited global population forecast. It includes historical data and projections for 235 countries up to the year 2100. It’s a lot of data, but this breakdown will help you visualize key global and regional demographic trends, and plan accordingly.

1. There’s a 30% chance the world’s population will stabilize before 2100

Global population growth peaked during the period between 1965 and 1970, when it was increasing by 2.1% per year on average. That pace has slowed by half — under 1.1% percent per year between 2015-2020 — and it’s projected to drop further by the end of the century. The U.N. estimates there’s a 27% chance the global population won’t be growing at all after 2100. Before we get there, though, the population could increase by 3.2 billion people, to a planet with 10.9 billion people on it.

Africa will account for most of that growth, possibly adding three billion people by 2100 (94% of total projected growth). Asia and Northern America are projected to add 120 million people each. Europe’s population, however, is expected to contract by 120 million.1

Strikingly, more than half the projected population increase will be concentrated in just six countries, five of them in Africa. In order of absolute increase, those six are: Nigeria; Democratic Republic of the Congo; the United Republic of Tanzania; Pakistan; Ethiopia; and Angola.1

Those uneven growth rates will dramatically reorder population rankings. China and India will remain the most populous countries (India is expected to pass China around 2027), but both will likely peak between 2030 and 2060. The rest of the top ten will see bigger changes. By 2100, five African countries are projected to be in the top ten. Today there’s only Nigeria.

All told, 90 countries will likely see decreases, especially in Asia, Latin America, and Europe. The largest losses are expected in China, Japan, Brazil, Thailand, and South Korea.

2. The fertility rate will fall below the replacement rate

Population trends are driven largely by trends in fertility, and in many countries the average number of live births per woman over a lifetime has fallen significantly.1

Though the fertility rate in the developing world is dropping, it’s still higher than the replacement rate needed to maintain population size (2.1 births per woman). This isn’t true in many developed regions. For instance, 1990, fertility rates in Australia/New Zealand, Europe, and Northern America were already below an average of two births per woman, where they remain today.Globally, we can expect fertility to decline steadily over the course of the century, from today’s global average of 2.5 live births per woman to 1.9 births by 2100.

Data clearly shows that as living standards go up, birth rates go down. This is because income, education levels, and healthcare access all have negative effects on fertility. Today we find the highest fertility rates in African countries, where only about 30% of women are enrolled in secondary education, the average annual per capita national income is quite low, and less than 60% of births are attended by skilled health staff. The birth rate is much lower in developed countries, however — less than two children per woman.

3. The population is getting older, but “demographic dividends” might pay off in most developing countries

Over the next 80 years the decreases in fertility will combine with increases in life expectancy, and all countries will grow older. The U.N. expects the global median age will increase to 42 in 2100 (up from the current 31, which itself is up from 24 in 1950). We’ll add more than 700 million people ages 80 and older by 2100, when that population will stand at 881 million. And by 2073 the planet will have more people ages 65 and older than below age 15 — the first time this has happened.

In most of sub-Saharan Africa, and scattered across other regions, the working-age population (between 25 and 64) is growing faster than other age groups. These conditions can create opportunities for economic growth known as the “demographic dividend.” Africa’s working-age population is projected to rise for several decades, from the current 37% to 44% in 2050, and to 50% in 2100. In Latin America and the Caribbean, however, that demographic will peak around 2039, and Asia will peak around 2025.1

Only Europe will face an unprecedented demographic burden, where the ratio of non-working-age to working-age population is expected to rise from 83% in 2020 to 122% in 2100. This demographic shift will impact regional labor markets and overall economic performance. It will also put stress on health care systems, pensions, and other social programs.3

4. Life expectancy will increase globally, but it won’t be evenly distributed

Global life expectancy at birth reached 73 years in 2019. In 2100 it’s projected to hit 82 years. Across all countries and regions, the projected gains depend on medical advances, as well as on the absence of catastrophic events, such as war or major epidemics.1

Though we’ve made considerable medical progress generally, that progress isn’t evenly distributed. Gaps between the longest-lived and shortest-lived countries amount to 30 years, from 84 (Japan and the Hong Kong and Macao special administrative regions of China) to below 55 (the Central African Republic, Chad, Lesotho, Nigeria, and Sierra Leone).1

 We can chalk up a large portion of that gap to disparities in the under-five mortality rate (the probability of death between birth and age five). Even though that rate has fallen globally, children born in sub-Saharan Africa in 2019 are still 20 times more likely to die before their fifth birthday than children born in Australia/New Zealand.1

5. In Northern America, migration will drive growth

According to U.N. projections, the United States immigrant population is expected to see a net increase of 85 million over the next 80 years — roughly equal to the combined total of the next nine highest countries. Migration will also factor importantly in Canada, where deaths are expected to outnumber births.2

Conclusion: Opportunities and challenges

These shifts suggest the potential for substantial regional growth of higher employment. Along with that, we can anticipate increases in national savings, and hence the investment rate. Third, we could see increases in productivity: Households might have more resources to invest in fewer children, and mothers with lighter child-rearing responsibilities might find it easier to enter the labor market.3

 But growth won’t happen automatically. People don’t just skate into good jobs and smart investments don’t come from thin air. These population shifts must be paired with smart policy. Governments need to help new entrants to the labor market find productive employment, and they need to facilitate smart investments in human and physical capital.3

On the other side, as an increasing share of the population moves into retirement, demographic change in certain regions might limit growth. Those areas require an increasingly large share of capital in order to maintain or improve public welfare. In these countries, governments should focus now on how they plan to shore up healthcare, retirement plans, and other “safety nets” for an older population.3

References

  1. World Population Prospects 2019. Highlights. United Nations Department of Social and Economic Affairs, 17 June 2019. Link
  2. Anthony Cilluffo, Neil G. Ruiz, 17 June, 2019. World’s population is projected to nearly stop growing by the end of the century. Pew Research Center. Link
  3. Development Goals in an Era of Demographic Change. Global Monitoring Report 2015/2016. The World Bank / International Monetary Fund, 07 October, 2015. Link

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