Baby Busts and Growth Booms: Demographic Change and the Macroeconomy
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Showing 101 database articles primarily about Demographics
Terra Incognita: The Economics of a Shrinking World
AI Summary. Global fertility has fallen below replacement level, meaning population will peak at roughly 9 billion around 2056 and then decline, driven by large existing generations masking the underlying shortfall in births.
Jesús Fernández-Villaverde and Patrick Norrick University of Pennsylvania- Date Posted:
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The UN appears to systematically overestimate births; e.g. 33 of 37 countries with high-quality statistics registered fewer births in 2024 than the UN had forecast. Fernández-Villaverde and Norrick infer humanity is below replacement fertility in 2026.
Will declining birth rates eventually shrink the global economy?
Core argument: Global fertility has fallen below replacement level as of 2026, ending humanity’s ability to sustain long-run population stability without a reversal in trends.
In Table A1 we compare the World Population Prospects (WPP) estimates of births in 2022-2023 with the official numbers reported by several countries. [A2 shows the full sample with the deviations.] As of 2026, humanity is likely to be below the replacement fertility level: we are having fewer births than we need to keep population constant in the long run. This astonishing fact does not mean that population has stopped growing. Because of momentum effects (the large cohorts of women born two or three decades ago are having their children now, and their own parents have not died yet), world population will keep growing for another 30 years or so. But unless trends change, it will peak at roughly 9 billion around 2056 and then start falling, first slowly, then fast.Takeaways by Macro Roundup® AI
- Global fertility has fallen below replacement level as of 2026, ending humanity’s ability to sustain long-run population stability without a reversal in trends.
- Population momentum—driven by large cohorts of women now in peak childbearing years—will sustain growth for roughly 30 more years before world population peaks at approximately 9 billion around 2056 and begins declining.
Related Articles:
- The Demographic Future of Humanity: Facts and Consequences — The world’s 2024 total fertility rate (TFR) was likely ~2.17, below the replacement rate of 2.21, notes Jesús Fernández-Villaverde, intensifying…
- Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Nicholas Eberstadt warns that depopulation will stress families as smaller families “become ever less able to bear weight—even as the demands that might…
- The Wealth of Working Nations — Japan achieved GDP growth per working-age adult of 31.9% between 1998 and 2019, slightly faster than the US at 29.5%. @King_ofSweden
Americans Are Done With Being Put in Racial Boxes
AI Summary. Intermarriage across racial and ethnic lines is rising across all major demographic groups in the United States, producing a growing share of the population that does not fit neatly into any single government-defined racial or ethnic category.
Justin Fox Bloomberg- Date Posted:
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Less than half of Americans < 29 years old are non-Hispanic whites. As of 2020, 33.8mm Americans – 10.2% of the population – identify as being of two or more races, largely driven by intermarriage between whites and either Hispanics or Asian Americans.
Is the traditional racial classification system becoming obsolete?
Core argument: Post-1960s immigration from Asia and Latin America is the primary driver of rising U.S. demographic diversity and the declining non-Hispanic White population share.
The increase in immigration from Asia and Latin America since the 1960s has been the chief driver of the rise in diversity and decline in the non-Hispanic White share of the population. But those immigrants have been doing what generations of immigrants before them did and, well, becoming Americans. Marriages across racial and ethnic lines are much more prevalent among Hispanic and Asian Americans than Black or non-Hispanic White Americans, while intermarriage rates have been rising steadily for the latter two groups, too. As a result, a growing share of Americans just isn’t going to fit neatly into any single racial or ethnic category that the US government can come up with.Takeaways by Macro Roundup® AI
- Post-1960s immigration from Asia and Latin America is the primary driver of rising U.S. demographic diversity and the declining non-Hispanic White population share.
- Intermarriage rates among Hispanic and Asian Americans exceed those of Black and non-Hispanic White Americans, expanding a multiracial population that no single government racial category can accurately capture.
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- Do Adults Have the Skills They Need to Thrive in a Changing World? — The 2023 OECD Survey of Adult Skills reveals the US has ~ 3 low-scorers for every high-scorer. Germany has nearly 3X as many high-scorers per low-scorer as the…
- Do Past Wealth Gaps Explain Modern Inequality? Evidence From Immigration To The United States — European immigrants who arrived with nearly no wealth converged to similar wealth levels as earlier European settlers within a few generations, while Black, Cuban, Mexican, and Puerto Rican households remained substantially behind, indicating that initial wealth gaps do not uniformly predict long-run inequality across all groups.
- America’s Immigration Mess: An Illustrated Guide — The US foreign-born population reached 51.4mm, or 15.4% of the population in 2024, Nicholas Eberstad notes, surpassing the prior peak of 14.8% set in 1890.
The Pig In The Python: US Decennial Labor Flows And Economic Opportunity, 1910–2040
AI Summary. A surge in labor force entrants during the 1970s created a persistent worker glut that suppressed wages and hiring demand for decades, as the oversupply remained embedded in the workforce until retirement rather than dissipating at entry.
Steven Ruggles Proceedings of the National Academy of Sciences- Date Posted:
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Accounting for both inflows and the overhang of previous labor market entrants, Ruggles predicts a labor shortage such that “Americans born in the 2020s might be the first cohort in a half century that earns significantly more than their parents did.”
Does a one-time labor surge create permanent wage pressure?
Core argument: Baby-boom labor-force entry during 1960–1980 suppressed young-worker wages, which declined sharply after peaking in 1973, reducing economic opportunity for new.
Figure 3A highlights the influx of workers that occurred between 1960 and 1980, as the large baby-boom cohort entered the labor force, female labor-force participation expanded, and immigration rose [see Figure 2 for a detailed breakdown]. It was difficult for the economy to absorb all the new workers, and wages for young people declined sharply after peaking in 1973. Figure 3A does not, however, provide a valid measure of labor-market competition because the baby boomers and newly employed women and immigrants did not suddenly vanish after they entered the labor force; they kept working and occupying jobs until they eventually retired decades later. The glut of workers entering the labor force in the 1970s would continue to stifle demand for new workers until their eventual exit from the labor force, a process that is still in progress. The index of employment competition shown in Figure 3B is [a better] measure of relative cohort size than 3A. It represents the cumulative net labor-market entries over the previous five decades as a % of the working-age population in the current decade. As shown in Figure 1C, we are already seeing signs of an uptick in the wages of young workers, and as the demographic shortage accelerates we may finally see real wages of the young exceed the levels of the early 1970s.Takeaways by Macro Roundup® AI
- Baby-boom labor-force entry during 1960–1980 suppressed young-worker wages, which declined sharply after peaking in 1973, reducing economic opportunity for new.
- Cumulative labor-market entries over five decades as a % of working-age population drives employment competition that persists decades after initial.
- Female labor-force participation expansion and immigration during 1960–1980 created a sustained worker glut that stifled demand for new employment until.
Related Articles:
- Baby Busts and Growth Booms: Demographic Change and the Macroeconomy — Cross-country evidence from 1950 to 2020 shows that a 1pp lower birth rate is associated with 22 log points (~25%) higher GDP per worker 40 years later and 29…
- Technology and the Baby Bust Paradox — Aging societies face structural labor shortages that create permanent incentives to automate, making demographics a long-run driver of AI deployment. Technology-producing economies benefit twice: by offsetting domestic labor scarcity and by exporting automation solutions to every other aging society.
- Can A Depopulating America Still Flourish? — Eberstadt finds as of the summer of 2025 ~7mm American men 25–54 were not in the labor force. Despite record high prime age female LFP, ~3.5mm prime age women…
What Demographic Prediction Can and Cannot Achieve
AI Summary. Population forecasts are dominated by model choice, not parameter uncertainty, with model selection accounting for up to 98% of output variance across projections. Different modeling approaches produce wildly divergent outcomes—from under 4bn to over 15bn people by 2075—making demographic projections tools for exploring possibilities rather than reliable predictions.
Samuele Lo Piano, Marta Kuc-Czarnecka, Roger Pielke, and Andrea Saltelli Social Science Research Network- Date Posted:
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Simulation of the decision chain yielding projections of world population in 2050 that range from 6 to 14B suggests most of the variance in demographic forecasts arises not from parameter uncertainty or data randomness but from model choice.
How much do demographic models actually predict versus explore?
Core argument: Model choice accounts for 98% of output variance in 2050 global population projections, driving divergent forecasts ranging from 4–25 billion.
We explore demographic predictions by propagating all plausible choices that can be made during the analysis through the modelling process. This approach involves navigating the so-called ’garden of forking paths’—mimicking in silico what would happen if multiple investigators were to examine the same problem. For this, we now abandon [the Chinese government mathematician] Song Jian’s ‘historic’ model and turn to models currently in use: the Cohort-Component and UN WPP models, the Lee-Carter model and the Lotka-Volterra model. Note that in standard use, these tools are used in isolation, see e.g. the FAO’s How to Feed the World in 2050, resting on a single UN WPP population trajectory shielding the reader from the compounding effect of their uncertainty. Unsurprisingly, the exercise capturing the modelling of the modelling process for global population projections to 2050 and 2075 reveals distinct characteristics regarding the sensitivity and projection outcomes of the different models. Once abandoned the straitjacket of Song’s approach, uncertainty is free to manifest itself. The overall uncertainty distributions of the projected populations show a wide range of possible outcomes, reflecting the inherent uncertainties in demographic projections.Takeaways by Macro Roundup® AI
- Model choice accounts for 98% of output variance in 2050 global population projections, driving divergent forecasts ranging from 4–25 billion.
- Song Jian’s optimization model converges to 700 million people by 2080 across all parameter variations (670–700 million range), demonstrating structural.
- Global fertility declined from 5 children per woman in 1950 to 2.1 currently, with no rebound in countries where rates.
Related Articles:
- The Demographic Future of Humanity: Facts and Consequences — The world’s 2024 total fertility rate (TFR) was likely ~2.17, below the replacement rate of 2.21, notes Jesús Fernández-Villaverde, intensifying…
- World Depopulation: Prospects and Implications — Nicholas Eberstadt @AEIecon argues that given its relatively high fertility rate relative to both East Asia and Europe, the US is primed to be the…
- Take the Under — .@RogerPielkeJr argues that more realistic projections of global population and GDP growth suggest that “even partial future policy successes could more easily…
The Midwest's Brain Drain Is Accelerating
AI Summary. The Midwest's brain drain is intensifying, with the income gap between those leaving and those arriving tripling from $5.6K to $15.6K (in real terms), while college-educated adults now make up 57% of out-migrants, up from 40% two decades ago.
Aziz Sunderji Home Economics- Date Posted:
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The “Brain Drain” is ongoing in the Midwest. The fraction of adult out-migrants with at least a bachelor’s degree is now 57%, up from ~40% in 2005. “It’s the most educated and highest-earning that are still leaving in droves.”
What factors are driving the Midwest's accelerating brain drain?
Core argument: Illinois high-earner out-migration surged +54K annually (2014–15 to 2023–24) while low-earner departures fell -104K, driving regional brain drain toward higher-income.
Take Illinois, the most populous Midwestern state: my analysis of Census Bureau microdata shows that between 2014–15 and 2023–24, annual out-migration by households earning under $50K fell by 104K. Out-migration by Illinois households earning over $200K rose by 54K over the same period. Across the region, the trend along educational lines is the same: the bachelor’s-or-higher share of adult out-migrants is now 57%, up from around 40% in 2005. It’s the most educated and highest-earning that are still leaving in droves.Takeaways by Macro Roundup® AI
- Illinois high-earner out-migration surged +54K annually (2014–15 to 2023–24) while low-earner departures fell -104K, driving regional brain drain toward higher-income.
- The Midwest’s leaver premium nearly tripled from $5.6K to $15.6K (2005–07 to 2022–24), indicating departing households earn substantially more than.
- Bachelor’s-or-higher share of out-migrants reached 57% vs. 40% in 2005, showing education-driven exodus leads to reduced regional human capital and.
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- Where is Standard of Living the Highest? Local Prices and the Geography of Consumption — For non-college Americans, high local prices mean lower living standards. “A high school drop-out household moving from the least expensive commuting zone to…
- The Determinants Of Declining Internal Migration — The decline in internal migration in the US has been driven by increasing housing prices; potential wage gains from migration are being offset by…
Why the U.S. Fertility Rate Has Hit a Record Low
AI Summary. The U.S. general fertility rate has reached a record low, continuing a decline that began before the last major recession and reflecting a broad shift toward delayed childbearing among women across most racial and ethnic groups.
Anthony DeBarros, Paul Overberg and Andrea Petersen Wall Street Journal- Date Posted:
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The US’s total fertility rate likely hit a record low of 1.57 in 2025, according to provisional CDC data. Childbearing continued to shift toward older women with the birthrate for American women 35–39 exceeding that of women 20–24 for the first time.
Core argument: Declining birth rates will shrink the future workforce, increasing pressure on social security and pension systems.
The nation’s fertility rates hit record lows in 2025 as childbearing continued to shift toward older women, according to new federal data released Thursday. For the sixth straight year, the number of children born in the U.S. remained at roughly 3.6 million. The number of births per 1,000 women ages 15 to 44—the general fertility rate—reached a record low of 53.1 in 2025, according to provisional data from the Centers for Disease Control and Prevention. The rate has mostly headed down since 2007, a prerecession peak when millennial women started to enter their prime childbearing years. While non-Hispanic white women saw a small increase in births last year, births by women of other racial and ethnic groups declined slightly.Takeaways by Macro Roundup® AI
- Declining birth rates will shrink the future workforce, increasing pressure on social security and pension systems.
- Delayed childbearing among older women signals shifting priorities toward education and career advancement over early parenthood.
Related Articles:
- The US Has One of the Highest Fertility Rates Among Peer Countries — As of 2022, the US had a “tempo fertility rate,” which is adjusted for life-cycle effects, of 1.82 – among the highest of advanced economies, and ~ on…
- The Eldest Millennials Had the Same Fertility as the Youngest Baby Boomers — Btw 1980 and 2000, US completed fertility fell from > 3 children per woman to < 2. Today, the oldest millennials, at 44, have 1.92 children, the same…
- Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Nicholas Eberstadt warns that depopulation will stress families as smaller families “become ever less able to bear weight—even as the demands that might…