Population Trends & the Economic Impact

"World Population Prospects 2024" and "World Population Prospects 2022," both published by the United Nations, offer detailed projections for global population growth through the end of the century. [1, 2] These reports utilize a wealth of data, including census data, vital statistics, and demographic surveys, to model future population trends. [3-5]

• The "Global Demography: Fact, Force and Future" chapter by Bloom and Canning explores the relationship between population trends and economic development. [6] This chapter examines various arguments about the impacts of population growth, including the possibility of a "demographic dividend" when declining fertility leads to a larger proportion of the population being of working age. [7]
• The excerpt from "The End of the World Is Just the Beginning," by Peter Zeihan, offers a different perspective. [8] This book argues that globalization is in decline, and nations will need to adapt to a future characterized by less interconnectedness. [8] While not directly addressing population aging, the book's exploration of shifting global power dynamics and potential economic disruptions is relevant to understanding the broader context of an aging world. [9]
• The "ECB Agining & Economy" paper examines the macroeconomic and fiscal impacts of population aging, primarily in the context of the Euro Area. [10] This paper specifically explores the potential for aging populations to impact labor supply, productivity, and interest rates. [10, 11]

Key takeaways

• The global population is projected to peak in the coming decades. While the exact timing remains uncertain, it is highly probable that the world's population will stabilize and potentially decline before the end of the century. [12, 13]
• An aging population presents both opportunities and challenges for economic growth. Declining fertility can initially lead to a "demographic dividend," with a larger proportion of the population in their prime working years. [7, 14] However, as populations continue to age, economic growth may be hindered by labor shortages, slower productivity growth, and increasing strain on social welfare systems. [15]
• Countries with youthful populations have a limited window to benefit from the demographic dividend. [14] Investing in education, healthcare, and infrastructure is crucial to ensure that younger generations are equipped to drive economic growth. [16]
• Countries with aging populations will need to adapt to a changing economic landscape. This may involve finding ways to boost productivity, encouraging longer working lives, and rethinking social support systems to accommodate a larger older population. [15, 17]

It is important to note that these sources offer a snapshot of a complex and evolving issue. Projecting long-term population trends and their economic implications involves a significant degree of uncertainty.

Citation Notes

Here is a citation note showing the details of the sources in this notebook:

• Bodnár, Katalin, et al. The Macroeconomic and Fiscal Impact of Population Ageing. No. 296, European Central Bank, June 2022.
• United Nations Department of Economic and Social Affairs, Population Division. World Population Prospects 2024: Summary of Results. UN DESA/POP/2024/TR/NO. 9, United Nations, 2024.
• United Nations Department of Economic and Social Affairs, Population Division. World Population Prospects 2022: Summary of Results. UN DESA/POP/2021/TR/NO. 3, United Nations, 2022.
• Zeihan, Peter. The End of the World Is Just the Beginning: Mapping the Collapse of Globalization. Portfolio, 2022.
• Bloom, David E., and David Canning. "Global Demography: Fact, Force and Future." Global Demographic Change: Economic Impacts and Policy Challenges, edited by G. H. Sellon Jr., Federal Reserve Bank of Kansas City, 2006, pp. 9-56.