The US population is aging. Less and less people are having kids than were in previous generations. In addition, better medicine and technology have helped people live longer. Urban.org determined that “The number of Americans ages 65 and older will more than double over the next 40 years, reaching 80 million in 2040.”
“The number of Americans ages 65 and older will more than double over the next 40 years, reaching 80 million in 2040.”– Urban.org
An aging population will impact a country’s economy. As older people work less and younger people will work to support the older population. Urban.org stated that “By 2040, about one in five Americans will be age 65 or older, up from about one in eight in 2000. Because younger people are much more likely than older people to work and pay taxes that finance Social Security, Medicare, and all other public-sector activities, population aging could strain government budgets.”
Besides straining public spending, there could be long-term decreases in economic growth. More consumers in the population means that there will be a smaller ratio of producers; demand is higher than supply, which will raise prices. Further, a decline in population growth could result in secular stagnation, which is when the economy experiences slow or no growth and people have a tendency to save rather than invest.
One reason the population is aging is because recent generations feel less inclined to have kids. I spoke to two of my colleagues at ideamix about this trend and where they stand on having kids in the future.
Do you plan on having kids in the future? Why or why not?
Katie explained that she plans on adopting kids rather than having her own. “I was adopted from birth, so for me, family is really solely about the love we offer one another rather than a genetic tie… [I] would rather pass the love that my adoptive parents showed me to my children instead.”
Sarah said that her decision to have kids will depend on her career. She added that she feels that there is “no longer the rush to get married that there was 20-30 years ago.” She explained that she feels that now, people are expected to start a career and get their life settled individually before starting a life with someone else and eventually a family.
Why do you believe so many people from our generation do not want to have kids? What events do you feel have influenced this trend?
Katie said that our generation is turned away from having kids because we see how expensive it is. She added that “there are various trends within limiting freedoms that cause women of our generation to not want to have kids.”
Sarah explained that she feels the state of the world has influenced people not to have kids. Between the lasting impacts of COVID, impending climate change, and increasing restrictions on reproductive healthcare, she is “always worried something bad is going to happen.” This uncertainty about the future makes Sarah unsure whether she wants to have kids.
How do you think the decision to have no or less kids will affect future generations?
Katie stated that “I think that there will be economic repercussions as future generations will not have enough people to fill the work force and to run the world how we are doing so today… People who choose to have no kids will also struggle when they get older, especially if they have no family to take care of them.”
Sarah said that she expects there to be a smaller global population in the next 50-100 years. Although technology is catching up, she added, there will definitely be an economic impact of a shrinking global population and certain industries will need to scale down accordingly
Though theorists cite different reasons why the US population is shrinking, the numbers are definitive: the population is aging. The most commonly held notion is that an aging population will have devastating effects on the economy, but some alternate theories have emerged arguing otherwise.
Alternate Theories About the Future of the Economy
Alternate theories suggest that an aging population may not necessarily result in lower economic growth. Some sources suggest that immigration will make up for the labor shortage that will come from an aging population.
A study from MIT determined that as populations age, automation accelerates amidst labor shortages. This finding counters economists’ perceptions that aging populations will hurt the economy. A news article about the study states, “Within the U.S., the research shows the same pattern: Metro areas where the population is getting older at a faster rate are the places where industry invests more in robots.”