What’s going on here? Birth rates in the world’s most industrialized economies have more than halved since 1960, as the baby boom becomes more of a murmur. What does this mean? A recent report showed that across the world’s 38 most industrialized countries, the average birth rate for a woman was a record low of 1.5 children in 2022. That’s down from 3.3 in 1960 – the point that pushes you toward a people carrier. So now, that rate's sitting well below 2.1 children – the level where a country’s population is considered stable without relying on immigration. France and Ireland had the highest fertility rates in Europe, while the measure of childlessness more than doubled in Italy, Spain, and Japan. Interestingly, birth rates slipped in many countries with extensive policies designed to support families. Meanwhile, higher birth rates were associated with countries that have higher levels of female employment. Kids are expensive, after all, and the cost of housing was cited as an increasing barrier. Why should I care? Zooming out: The hard facts. The fewer children born in a country, the smaller its future workforce. That means labor shortages are more likely, which can force companies to hike salaries to attract rare talent – a tactic that can fire up inflation. On top of that, a shrinking workforce means fewer folk paying taxes, and that’s far from ideal when the government needs to care for an aging population. But there could be opportunities for some: healthcare and AI sectors could supplement workforces and aid the elderly – and make cash doing it. The bigger picture: A new hope. On the flip side, investors see potential in countries with increasing populations. Case in point: India’s population of 1.4 billion – the biggest in the world – is pushing the country’s economy forward at some pace. It’s no coincidence that investors have been drawn to it, especially now that China’s stop-start economy is looking less alluring. |