The alarm bells on fertility are ringing as countries around the world face historically low birth rates. In the United States, the number of annual births in 2020 fell to 3,605,201, the lowest level since 1979. Overall, population grows at the second slowest rate since records began in 1790. Meanwhile, a handful of East Asian countries have seen their birth rates drop to or below 1.0. And many middle-income countries like Iran and Brazil now have fertility rates below the replacement level of 2.1 children per woman..
Such a decline would soon shock our economic infrastructure and lead to a decline in living standards. Unless we act now. Fortunately, there are strategies to prevent economic catastrophe from occurring as populations shrink. One is increasing women’s labor force participation to offset falling birth rates. This choice is in everyone’s best interest because by promoting women’s workforce participation, we too will reap the collateral benefits of a more inclusive economy.
Falling birth rates: an economic problem with an economic solution
Falling birth rates push economic systems into disequilibrium. That’s why economists like me worry about the rate of reproduction. For us, fertility is not just a matter of kinship. It is an economic problem.
For example, difficulties countries will face a smaller tax base as the working-age population declines. How will they be able to pay a record number of 14.7 trillion dollars of stimulus injected into the economy in 2020 to make up for the loss from COVID-19? How will they fund health care and pension schemes?
Before the pandemic, the US Social Security program reached a figure of 13.2 trillion dollars cash shortage. In Japan, where the birth rate has fallen to the lowest level since 1899, the increase in taxes and social insurance contributions has eaten up recent income growth of the working-age population.
There is also the issue of a sharp reduction in investment in business innovation, as investors will cast their doubts about future consumer demand and a heavier tax burden through strategic strategies. discounted investment portfolio.
Perhaps most concerning, however, are the effects businesses will feel as their workforce shrinks. We are struggling with an under-optimized workforce because of gender inequality. It caused 6.48 trillion dollars erase the global economic potential. We cannot afford to limit the labor supply further.
As the birth rate falls, economic instability increases. But a solution to offset the drop in fertility does not require stimulating population growth.
Women’s labor force participation is key to offsetting population decline
Women’s labor force participation is key to counterbalancing falling birth rates. In fact, increasing the economic potential of half the world’s population benefits the entire economy, not just women. For every 10% increase in the share of women’s employment, real wages increase by 8%. open to all workers — men, women, non-binary folx, and those who identify as other. Furthermore, achieving gender equality in employment can increase The GDP of the United States grew by 5%, the GDP of Japan by 9% and the GDP of India by 27%.
Achieving employment parity will require targeted structural changes. Before the pandemic, about 80% of working-age men compared with 52.6% of working-age women in the world participating in the paid labor force. COVID-19 has only exacerbated…
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