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The long term implications of changing demographics

Alongside COP26, Glasgow hosted some expert gatherings of thought leaders.  One of the most challenging discussions was in the Longevity Forum.  The focus was on sustainability, but with some surprising evidence and conclusions.  World population may not be on the upward trajectory built into current long term planning.

Immediately ahead lie two or three decades of growth, mainly from longer lifespans.  But the long term trend will see numbers stabilise and fall.  Stark evidence pointing to sharply declining fertility around the world means that many nations are already destined to shrink in the second half of the century.  And in 80 years’ time, the world population total might be little changed from today heading down.  Without intervention, this will be a shock for many nations, both western and developing.  The result will be a very different demographic profile.

The factors involved are a mix of good and bad.  Better access for women to education and careers brings delays to family formation and new views on family size and life/work balance.  Surprisingly it is not just a feature of industrialised societies; women in every developed country have taken up more tertiary education.  All of this is good news, but it interacts with declining fertility to impact population trends.

For reasons not entirely clear, male fertility has been declining for two generations, now estimated at around 50% of the level of 1970. Plastics, and plasticisers seem the most likely suspects.  It is not simply about urbanisation - the chemical impact is embedded in food and soils.  Covid has added an additional downward shock to population growth.  For example, US births over the pandemic are down 7%.  Southern Europe shows a similar pattern.

The COP26 approach to reduce pollution and adverse chemicals in the environment is undoubtedly right.  But even if world population is currently too high - and for perhaps two or three decades might grow further – does it really help to have fewer births?  These are the resource for change and tomorrow’s tax payers.  Looking at the carbon footprint of children seems the wrong way to approach climate change and sustainability.

In future more of the world may look like Japan.  That is likely to mean a shrinking working age population and labour shortages.   Migration masks some of the underlying trends, so Scotland is not exempt. Scotland’s fertility rate has not been at replacement levels since 1973.  Even before population numbers change much, the demographic shape will start to make the economy look very different.

There are no quick fixes.  Around the world, incentives to have children have generally not worked.  In the past 70 years, the global fertility rate has nearly halved and this century will see a collapse in the population of several nations, including China.  Half of the world population lives in nations with sub-replacement fertility.

The solution will be social change; recognising the importance of lowering opportunity costs for women in having families.  There are signs that good support for working mothers, with high quality affordable childcare certainly helps.  Indeed, some of the Nordic countries have already shown that slowing the trend with good family support is possible.  In Sweden, this involves heavily subsidised day care and generous shared parental leave.  This goes along with a culture ordered around community and family life. Even so Sweden still runs below population replacement rate.  Swedish birth rates are still declining, but the trend has been much improved with social change.

The decline of reproduction rates below replacement rates will have social, political and economic implications that should not be ignored. The challenge needs much more research and to be given a central place in business and public policy. Demographics is a slow moving but powerful force. Policy and planning must look decades ahead, well beyond the timeframe of most public or business planning.  It does point to the urgency of addressing food supply and pollution, but also to some key long term benefits of progressive social policies.

A version of this article was published in The Herald on 23.11.2021.