Population Growth and Demographic Transition
A common misconception is that the global population just continues to grow. But the story is not so straightforward. According to the UN, the rate at which the global population is growing has in fact been in decline since its peak in 1988. However, as the world modernises, access to healthcare and its quality are improving and life expectancy is increasing. At the same time, the World Economic Forum states that global fertility rates have declined by 50 per cent in the last 70 years. While many may see this as a positive control for overpopulation, the declining birth rate combined with the ageing population has serious implications for the dependency ratio (the ratio of the workforce in comparison to the unemployed). The findings by the UN and World Economic Forum already show that the picture is much more nuanced than is commonly believed. And questions are beginning to rise over how we will continue to support a growing elderly proportion of the population whilst the workforce in many countries is shrinking.
A New Demographic Landscape
Across the globe, we are undergoing what is known as a ‘demographic transition.’ Prior to the Industrial Revolution, the global birth and death rates were at a relatively balanced level. While people had many children, child mortality rates were significantly higher than today, meaning that overall population growth remained subdued. Once the Industrial Revolution took off in 1760, living standards were transformed, causing the rate of premature deaths to drastically fall. In 18th and 19th century Europe, people would have a large number of children because the likelihood of death before adulthood was high. This is still the case in many Least Developed Countries (LDCs). In many middle and high income countries, however, premature deaths are lower, and people are having fewer children as a consequence.
Is this a Global Phenomenon?
Western nations were the first to experience the demographic transition because the Industrial Revolution allowed them to improve their living standards. However, development has since spread and most countries have now either completed the transition or are currently undergoing it. In other words, nations classified by the UN as being less developed are catching up at a rapid rate. For example, the platform Our World in Data shows that it took 80 years for most Western countries to reduce fertility rates from more than six children per woman to less under three. However, the same transition took Bangladesh only 20 years, according to Researchgate. In 1971 Bangladeshi women had an average of seven children, with a child mortality rate of 25 per cent. By 2015 Bangladeshi women had an average of just 2.2 children and the country’s child mortality rate dropped to a remarkable 3.8 per cent. Bangladesh is just one example, but it highlights a global and rapidly evolving trend in the world’s population.
The Changing Role of Women
Improving health standards are not the only reason people are choosing to have fewer children. Previously, the role of a woman was strictly confined to the domestic sphere in many societies. However, as development has created the conditions for women’s emancipation, this role has shifted. Sex education and the availability of contraception have also played a substantial role in this trend by helping women to separate sexuality from the choice of childbearing. The invention of the contraceptive pill in the 1960s was a milestone in this journey. As women were liberated socially, economically and educationally, more opportunities became available to women than motherhood, further contributing to declining child birth rates.
An Ageing Society
Female empowerment and reduced child mortality rates have caused fertility rates to decline. In parallel, the elderly proportion of the population is growing. Improvements in healthcare and overall quality of life mean that we are living longer than ever. The UN has predicted that by 2050, the number of people over 65 will triple from 500 million in 2010 to 1.5 billion. The resulting proportion of the global population that is over 65 has already rapidly increased to nine per cent in 2019 from six per cent in 2010. Even more, in many developed countries this age group accounts for more than 20 percent of the population. It is anticipated that this trend will not only replicate itself in other places, but that 155 countries by the end of the century will have comparable rates.
Economic Consequences of Growing Dependency
Ageing populations have more complicated needs. However, the way in which we meet these needs has changed. Many countries have, or currently are, moving away from caring for the elderly within the family. Instead, elderly care is taking place within the public and private sectors. This becomes problematic since ageing populations combined with declining fertility rates mean that the dependency ratio is changing; the number of retirees relative to those of working age has drastically increased. What does this mean? When the dependency ratio changes in favour of the dependent population there are fewer workers to support their needs. As demand rises and supply continues to shrink, negative consequences arise for economies. A shrinking workforce may cause investment and GDP to slow, resulting in economic stagnation. Amongst other nations, this phenomenon has engulfed Japan for the past 30 years.
What Will The Future Hold?
It is difficult to visualise just how great the impact of changing demographics will be, given that it is somewhat distantly removed from the concerns of our everyday lives. However, similar to climate change, if it is left unaddressed then it will quickly become evident how serious the challenges ahead are. Even nations with young and currently growing populations will eventually become exposed to the demographics of a shrinking workforce which cannot sustain the needs of the elderly population. This is going to require a global shift in the way that we view care for the elderly, however, what this shift entails currently remains unknown.
