Demographic trends taking place are fundamentally changing the future of developed economies and the way we look at ourselves. Europe and countries such as Japan are facing drops in fertility rates, often to levels that are below the replacement rate. Although fertility rates in the U.S. have been falling, we are still near or above the replacement rate. The big story is that for the first time over half of children under one year of age are minorities. In both the U.S. and much of Europe, more and more women are deciding not to have children and more people are living alone.
Fertility rates that are below replacement rates, absent immigration, inevitably lead to an aging population, a declining workforce and gradual depopulation. Economies will not have the same demographic inputs that fueled growth throughout the 20th century. This will likely put a strain on health and elder-care programs. The mix of products sold will change, and with this change some industries will benefit and others lose out.
Many see this trend as a good thing, lessening the environmental impact of humans in depopulating areas.
But many countries in Europe are trying to reverse or at least slow this trend by re-evaluating their family policies and offering generous benefits to parents. Unfortunately these policies seem to be having little effect on the birth rate or the number of women who choose to remain childless.
In the U.S., the fact that over half of children under one year of age are minorities reflects the influx of immigrants, and where they are from, over the past forty years. The trend of increasing percentages of minority births may temporarily reverse as currently many more immigrants are returning to their home countries than before. But over the long term, the trend appears to be unstoppable as the median age of non-hispanic whites is much older than that of other groups.
Immigrants have been important to the growth in the U.S. economy over the past two or three decades. According to a 2007 Congressional Budget Office report, immigrants had accounted for half of the growth in the U.S. workforce over the previous decade. This was certainly an important factor in our economy’s ability to grow.
Outside the workplace, society is enriched by an increasingly diverse population. Exposure to a wide variety of cultures is now commonplace all over the country, where forty years ago such experiences were limited to a few areas.