Tipping Point: When Populations Peak

As July 11 marks World Population Day, celebrating the approximate day that the world's population reached 5 billion on July 11, 1987, we're taking a closer at one of the population trends that will affect many countries sooner or later in the 21^st century: population decline. Especially prevalent across Europe and developed Asia, this demographic trend is a consequence of declining birth rates and ageing populations and poses significant challenges to the countries affected.

In countries like Japan and Italy, where population decline is estimated to have begun in 2010 and 2014, respectively, fertility rates have fallen below the replacement level of 2.1 percent a while ago. Influenced by factors such as higher education and career opportunities for women, shifts in societal norms regarding family and childbearing and an ageing overall population, natural population change, i.e. the difference between births and deaths, turned negative years ago. For several years, positive net migration stopped the overall population from declining until the (negative) natural population change eventually became larger than the population growth from migration.

Countries with declining populations face a number of challenges, both economic and social. Economically, a shrinking workforce can lead to labor shortages, reduced productivity and increased pressure on social welfare systems. With fewer working-age individuals to support a growing elderly population, the financial burden on pension systems and healthcare services intensifies. Socially, a declining population can result in the depopulation of rural areas, shrinking communities and the ensuing challenges in maintaining infrastructure and public services.

Addressing these issues requires comprehensive strategies. Raising the retirement age or increasing taxes/social contributions can help alleviate the financial burdens associated with a demographic imbalance. Policies to support work-life balance and affordable childcare can help slow the population decline and immigration of young, skilled workers can help address labor shortages and increase productivity.

According to the latest revision of the United Nation’s World Population Prospects, many countries will face these challenges within this century if they don't already, such as the aforementioned Japan and Italy, China and South Korea, which were expected to see their first population decline in 2021. Brazil's population is expected to start declining in 2042, France's in 2049 and even India’s vast population is projected to start shrinking in 2062.

Among developed nations, the United States, Canada and Australia are notable exception, with none of them currently expected to see their first population decline in the 21^st century. Geographically, many African nations are still growing rapidly, resulting in a continental shift in global population that will see countries like Nigeria, the Democratic Republic of Congo, Ethiopia and Tanzania among the most populous nations in the world by 2100.