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Some rich countries are visibly anxious about their falling birth rates and are, in some cases, providing the public with incentives to have children. But is a high birth rate really good for a country, especially one that is already doing well?
The Good
While a high population can indeed accelerate economic growth, it also places a great deal of strain on critical resources such as housing, education, and employment. The higher the population, the more scarce these resources become until a significant proportion of the population cannot access them. India, Nigeria, and Pakistan are common examples. The population is just too high for any meaningful progress to be made in addressing poverty. The result is high migration out of these countries. Almost every economically stable country you’ve ever heard of has a local population of Nigerians and Indians, for example, who are running away from the poverty back home. A low birth rate can reduce the strain on critical resources and ensure most of the local population lead comfortable lives.
A high and rising birth rate will also eventually lead to congestion and its associated vices. Urban congestion will often lead to vice-like behaviors for unemployed residents who have no means to survive. Cases of drug dealing, prostitution, gun violence, and even political instability are often higher than usual in countries with a high population of unemployed urban residents. Latin American countries with significantly high birth rates are, for example, dealing with runaway crime and gang activity. A low birth rate reduces urban pressure and the social problems associated with it.
A shrinking population and workforce are also an incentive for companies to automate their operations and reduce their reliance on human workers. A great deal of progress has already been made in terms of automation. The number of factory workers nowadays is nowhere near where it used to be in the 70s or 80s. Almost all repetitive tasks have been automated. A shrinking population will encourage firms to rely on even more automation to boost productivity without using human workers. This means that even with a declining population, productivity can still remain high.
Living standards will also remain high with a stable population as opposed to one that is growing rapidly. Countries with relatively low populations, such as Norway, Switzerland, and even Italy, often have better living standards when compared to developed countries that have significantly high populations.
Why Could Low Birth Rates be a Challenge?
Low births can, however, mean a significantly high population of aging adults who can place a great deal of strain on pension and healthcare systems. It can, as a result, be difficult for the government to effectively care for this segment of the population.
A low population of young adults can also lead to a less innovative society. Young people are largely responsible for innovation, risk-taking, and the adoption of new technologies. Older people tend to stick to established ways of life and proven business models.
Some sectors, such as healthcare, are also difficult to fully automate. A shortage of workers can persist in such sectors if a country has a low birth rate.
Conclusion
A low birth rate is not necessarily a problem, especially for relatively wealthy countries. Automation and AI can make up for most of the labor shortage that may result, meaning productivity can still remain high. The quality of life of people in the country will also be significantly improved.
