Economists, technology leaders, and politicians have expressed worry about the significant decline in birth rates across various countries. The decreasing fertility rates both in developed nations and emerging markets like China have led to widespread apprehensions regarding a potential population cliff looming on the horizon.

Economist Jesus Fernandez-Villaverde has recently highlighted a unique observation: “For the first time, humans are not producing enough babies to sustain the population. Individuals aged 55 or younger could witness a phenomenon unseen for over 60,000 years, not even during wars or pandemics: a consistent decrease in the global population.” Although a gently declining population might be beneficial for sustainability, the reality ahead seems to point towards a population collapse and economic unrest.

However, these alarmist sentiments might be overly pessimistic. A recent UN report predicts that the world population will continue to grow for the next 50 to 60 years, reaching a peak of around 10.3 billion individuals in the mid-2080s, up from 8.2 billion in 2024. Following this peak, a gradual decline is expected, potentially reaching 10.2 billion by the century’s end. Even if this projection may be overly hopeful, it is unlikely that peak population levels will be reached before 2054.

Various economic theories present conflicting views on the correlation between population growth and income per capita growth, often used as a measure of living standards. While models like the Solow growth model indicate a negative relationship due to the capital dilution effect from rising populations, the Romer model suggests a positive link between population growth and innovation. The latter argues that a larger population allows for increased prospects of identifying revolutionary ideas that could benefit society in the long term.

In addition to these economic theories, the world is confronted with more fundamental challenges, particularly in maintaining global economic and political stability. Issues such as inadequate job creation, widespread youth unemployment or underemployment, and the global migration problem are all linked to poor job prospects and dim futures faced by the younger generation.

The increase in post-secondary education has failed to address many societal issues, as obtaining a college degree does not guarantee access to well-paying job opportunities. With the decline of traditional manufacturing-led pathways for economic growth, underdeveloped regions like Africa and South Asia struggle to generate decent jobs for millions of young entrants into the labor market.

As the youth bulge in Africa and South Asia demands millions of productive jobs annually to capitalize on the demographic dividend, some developing countries, including India, face challenges in creating sufficient job opportunities. The impending threat of AI-induced job displacement exacerbates concerns about job scarcity in the future, highlighting the importance of developing sustainable strategies for generating decent-paying employment opportunities.

The rise in populism, protectionism, and geopolitical instability serves as a warning sign of the consequences if the genuine demographic challenges facing the global economy are not adequately addressed. Beyond merely providing welfare support for retirees, policymakers and economists in developed nations must consider broader implications, including environmental degradation and quality-of-life factors, before advocating for population growth.

Before investing in pro-natalist initiatives, it is crucial to recognize that fears of a population collapse may be exaggerated, resembling previous concerns about overpopulation. Instead of focusing solely on workforce shortages, addressing the real challenge of creating stable job markets for individuals aspiring to enter the global middle class is essential to safeguarding economic stability in the coming decades.