A report from McKinsey Global Institute warns that major global economies may experience a “population collapse” by 2100 due to falling birth rates, with some countries facing population declines of up to 50%. The study found that two-thirds of the world’s population lives in countries where fertility rates are below the replacement rate of 2.1 children per family.
The primary driver of this trend is not longer lifespans but a “youth deficit,” meaning fewer young people. This has significant implications for economic growth, social security, and government finances. The study notes that without changes, increasing numbers of seniors will cause government deficits and debts to rise, threatening debt sustainability and social contracts.
To mitigate these effects, countries need to boost fertility rates, labor intensity, and productivity. However, there are no clear examples of a country successfully increasing its birth rate while maintaining productivity. Businesses must adapt to an aging workforce and governments must start preparing for the demographic changes now.
The report’s findings come as other experts, including Elon Musk, have warned about the risks of population collapse. While some countries, like China and Italy, face more severe population declines, others, such as the US, may see a slight increase in population due to immigration. However, even the US must address the growing costs of social security and Medicare.
The study’s lead author is optimistic that humanity will find ways to thrive despite the challenges posed by demographic changes.
Source: https://fortune.com/2025/01/19/top-economies-population-collapse-fertility-rates-china-us-debt-gdp-growth