September 30, 2023


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Old-age is the next global economic threat

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For now, global population continues to grow. That means that if countries skewing older can overcome domestic political hurdles, they can keep growing by taking in young working-age immigrants; that’s how Canada, the U.S., the U.K. and Germany have all grown faster than Japan, and it’s why Japan itself has been ramping up immigration.

But this solution will be temporary, because the transition to small families is happening all over the world. Fertility in Muslim countries, once believed to be bastions of high birth rates for religious reasons, has crashed in the last two decades. Even Sub-Saharan Africa, the last bulwark of high fertility, is seeing its numbers fall faster and faster.

This doesn’t mean that the globe is headed for a childless future like the one depicted in the movie “Children of Men.” But it does mean that the window is closing for a few developed countries to continue to meet the challenges of population aging.

Societies like Japan are therefore on the front lines of what will eventually be a global challenge. The human species has never before dealt with prolonged and continuous aging. Countries need to continue to aggressively search for solutions — especially technological fixes like automation — in order to ease this unprecedented transition.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.