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It Will Be a Smaller World After All, The New York Times, March 8, 2003

By Ben J. Wattenberg

WASHINGTON - Remember the number 1.85. It is the lodestar of a new demography that will lead us to a different world. It should change the way we think about economics, geopolitics, the environment, culture — and about ourselves.

To make their calculations orderly, demographers have typically worked on the assumption that the "total fertility rate" — the number of children born per woman — would eventually average out to 2.1. Why 2.1? At that rate the population stabilizes over time: a couple has two children, the parents eventually die, and their children "replace" them. (The 0.1 accounts for children who die before reaching the age of reproduction.)

Now, in a new report, United Nations demographers have bowed to reality and changed this standard 2.1 assumption. For the last five years they have been examining one of the most momentous trends in world history: the startling decline in fertility rates over the last several decades. In the United Nations' most recent population report, the fertility rate is assumed to be 1.85, not 2.1. This will lead, later in this century, to global population decline.

In a world brought up on the idea of a "population explosion," this is a radical notion. The world's population is still growing — it will take some time for it to actually start shrinking — but the next crisis is depopulation. The implications of lower fertility rates are far-reaching. One of the most profound is their potential to reduce economic inequality around the world and alter the balance of power among nations.

The United Nations divides the world into two groups, less developed countries and more developed countries. The most surprising news comes from the poorer countries. In the late 1960's, these countries had an average fertility rate of 6.0 children per woman. Today it is 2.9 — and still falling. Huge and continuing declines have been seen in countries like Brazil, China, India, Indonesia, Iran, Turkey and (of great importance to the United States) Mexico.

The more developed countries, in contrast, have seen their fertility rates fall from low to unsustainable. Every developed nation is now below replacement level. In the early 1960's, Europe's fertility rate was 2.6. Today the rate is 1.4, and has been sinking for half a century. In Japan the rate is 1.3.

These changes give poorer countries a demographic dividend. For several decades the bulk of their population will be of working age, with relatively few dependents, old or young. This should lead to higher per capita incomes and production levels. Nations with low fertility rates, meanwhile, will face major fiscal and political problems. In a pay-as-you-go pension system, for example, there will be fewer workers to finance the pensions of retirees; people will either have to pay more in taxes or work longer.

Among the more developed countries, the United States is the outlier nation, with the highest fertility rate — just under 2.1. Moreover, the United States takes in more immigrants than the rest of the world combined. Accordingly, in the next 50 years America will grow by 100 million people. Europe will lose more than 100 million people.

When populations stabilize and then actually shrink, the economic dislocations can be severe. Will there be far less demand for housing and office space? Paradoxically, a very low fertility rate can also yield labor shortages, pushing wages higher. Of course, such shortages in countries with low fertility rates could be alleviated by immigration from countries with higher fertility rates — a migration from poor countries to rich ones. But Europeans are actively trying to reduce immigration, especially since 9/11. Wisely, America has mostly resisted calls for restrictions on immigrants.

The environmental future, however, looks better. Past research on global warming was based on a long-term United Nations projection, issued in the early 1990's, of 11.6 billion people in 2200, far more people than we're ever likely to see. The new projections show the global population rising from just over six billion now to just under nine billion in 2050, followed by a decline, moving downward in a geometric progression.

With fewer people than expected, pollution should decrease from expected levels, as should consumption of oil. Clean water and clean air should be more plentiful. We know that many of these people will be richer — driving more cars, consuming more resources. We also know that wealthy countries tend to be better at cleaning up their pollution than poor nations. With fewer people, open spaces should also be more abundant.

Still, it is the geopolitical implications of this change that may well be the most important. There is not a one-to-one relationship between population and power. But numbers matter. Big nations, or big groups of nations acting in concert, can become major powers. China and India each have populations of more than a billion; their power and influence will almost surely increase in the decades to come. Europe will shrink and age, absolutely and relatively.

Should the world face a "clash of civilizations," America may find itself with weaker allies. It may then be forced to play a greater role in defending and promoting the liberal, pluralist beliefs and values of Western civilization. We may have to do more, not because we want to, but because we have to.

Ben J. Wattenberg, a senior fellow at the American Enterprise Institute, is author of "The Birth Dearth."