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From Jesus Fernandez-Villaverde and Patrick Norrick:
As of 2026, humanity is likely below replacement fertility. That has never happened before, not in wars or pandemics. But the real surprise is that the fall has been concentrated in low- and middle-income countries and among poorer and less educated women. We fit a single-factor model to 236 countries since 1950: the common component peaked in 1978, and what drives fertility down today are country-specific trends, 219 of them negative and not one leveling off. None of the commonly cited mechanisms can account for this pattern, so we offer a conjecture: modernity itself, which makes a third child expensive and childlessness cheap. Children come in integers, so it takes very little to move a cohort’s fertility rate from 1.8 to 1.3. And nothing in an economy pushes fertility back to 2.1. We close with the main economic consequences, in particular slow growth.
When I read “The estimated common factor peaks in 1978 and has been declining since.” I do think of birth control, however, albeit with lags. The actual availability of birth control, all economic and social constraints considered, is a lot more fraught and difficult than some of the more superficial accounts might indicate.
The post The Economics of a Shrinking World appeared first on Marginal REVOLUTION.
