The Demographic Future: What Population Growth -- and Decline -- Means for the Global Economy Nicholas Eberstadt

November/December 2010
ESSAY
The Demographic Future: What Population Growth -- and Decline -- Means for the Global Economy Nicholas Eberstadt

NICHOLAS EBERSTADT is Henry Wendt Chair in Political Economy at the American Enterprise Institute and Senior Adviser to the National Bureau of Asian Research.

It is already possible to draw a reasonably reliable profile of the world's population in 2030. This is, of course, because the overwhelming majority of those who will inhabit the world 20 years from now are already alive. As a result, one can make some fairly confident estimates of important demographic trends, including manpower availability, the growth in the number of senior citizens, and the resulting support burden on workers.

Overall, it is apparent that the future global economy will not be able to rely on the kind of demographic inputs that helped fuel growth in the era before the current global recession. For today's affluent Western economies, the coming demographic challenge of stagnant and aging populations combined with mounting health and pension claims on a shrinking pool of prospective workers is already generating concern, especially in Europe and Japan. But at the same time, demographic constraints in the rising economies that are expected to fuel future global growth are more serious and intractable than generally recognized.

When the current painful and protracted economic crisis is eventually resolved, the global economy will likely embark again on a path of sustained long-term growth -- but at a slower pace, because of new demographic realities. These demographic pressures can be substantially offset only if both rich and poor countries undertake profound and far-reaching changes in working arrangements, lifestyles, business practices, and government policies.

MORE HEALTH, FEWER BABIES

The twentieth century was an era of unprecedented population growth. Between 1900 and 2000, the world's population almost quadrupled, from about 1.6 billion people to around 6.1 billion. This huge expansion did not occur because people suddenly began reproducing at higher rates; instead, population surged because humans finally stopped dying like flies. Over the course of the twentieth century, global life expectancy at birth more than doubled, soaring from about 30 years in 1900 to about 65 years in 2000. This global population explosion was, in reality, a health explosion: the entirety of the enormous increase in human population over the past several generations was due to dramatic declines in mortality and improvements in general health conditions.
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