- Jan 05, 2026
- Mukul Asher
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Global Fertility Rates of Countries: Implications for Development Economics
The Context As global fertility rates continue to decline, albeit unevenly among countries, several implications arise for assessing successful outcomes in development economics. Such an assessment requires reflection and further research, which has the potential to impact the nature of development economics itself. This deserves to be a high priority for researchers in development economics. The Global Total Fertility Rate (TFR) has declined from around 5.0 in the 1950s to about 2.2 in 2025. TFR measures the average number of children a woman produces in her reproductive years. TFR of 2.15, if it persists, portends a stable population. But a TFR below 2.15 portends a declining population over time. The current global TFR trends indicate a steady movement towards below replacement rate fertility. Managing declining populations, with relatively little experience globally, will be critical for most countries in sustaining their accustomed way of life. Indeed, for some countries, their very prospects for preserving their existence are likely to be at stake1. Trends in TFR are not just about population numbers, but have wide-ranging consequences for society, and on the financial sector, asset markets, household welfare, labour markets, and other areas of society and economy, as well as on political dynamics2. A 2025 Report by McKinsey has argued, “The challenges of global low and falling fertility go beyond the economic hurdles —they could have big implications for human development and the geopolitical balance. On the human development side, shifts in the weights of the global population could amplify the importance of issues such as gender parity and child nutrition, as more population growth occurs in regions that lag on these dimensions. Shifting global demographics will also influence the reconfiguration of global trade flows. The view of future global interconnections will require a new lens that incorporates demographic changes in the aperture as the world’s centre of gravity tilts toward later wave regions in the coming half-century. Businesses can consider talent supply as an additional factor to shape their global footprint, along with the shifting global map of consumers. Meanwhile, policymakers can weigh options to secure longer-term access to human capital by investing in infrastructure and education in less developed later wave regions.3” Figure 1: Relationship Rates Across Regions Global TFR: Implications for Development Economics In addition to declining TFR, Figure 1 suggests that relationship formation, defined as the percentage of 25-34-year-olds who are married or cohabiting, across the globe is also declining, not an encouraging indicator for future TFR trends. Figure 2: Global TFR Across Countries Figure 2 provides 2024 data on global TFR across countries. The analysis of TFR data in Figure 2 leads to several important implications for development economics. In the literature on development economics, the success of East Asian countries (Japan, South Korea, Singapore, and Taiwan) has been persistently lauded. The TFR data suggests that South Korea has the lowest TFR of 0.73 globally, when the TFR rate at which population becomes stable is 2.15. TFR of Taiwan is 0.86, Singapore is 0.95, and Japan is 1.22. TFR of Hong Kong, not in Figure 2, hovers between 0.7 and 0.8. Births in Japan for 2025 are set to fall below 670,000, the lowest number since national records began in 1899, and worse than the most pessimistic government projections. This fast population decline is raising a troubling question: Can Japan sustain its economy and society with so few young people? 4 At these fertility and birth rates, these countries simply cannot reproduce themselves, and without large-scale net immigration can not only not continue accustomed social norms and structures, but may not even physically exist. The persistent lauding of the success reflects an incomplete assessment matrix used in development economics. The policymakers need to take into account the type of society their economic and social policies are creating. Just as focus on short-term business performance could result in the long-term health of a business enterprise, excessive focus only on quarterly or yearly Gross Domestic Product (GDP) and other such macro-economic numbers could lead to societal outcomes which may be dysfunctional and adversely affect society’s ability to continue as a functioning entity. It is noteworthy that some of the Southeast Asian countries that have attempted to emulate the above East Asian countries are also beginning to grapple with similar challenges. Figure 2 suggests that the TFR of Thailand is 1.20, Malaysia is 1.54, and Vietnam is 1.89. In recent decades, Vietnam has been widely regarded as a country that has successfully leveraged changing globalisation trends to deservedly achieve economic success. But, “Vietnam, once known for its high fertility, is now rapidly transitioning into a “child-scarce society. The risk of falling into the trap of ‘growing old before getting rich’ is more real than ever…This is no longer a technical number confined to demographics and public health. Behind it lies a cautionary tale about the potential collapse of the traditional family structure, as increasing numbers of young people are unable to secure stable housing, leading them to delay or even forgo marriage and childbirth. A silent generation of ‘Three No’s is emerging: No home – No marriage – No children.”6 A similar scenario is also evident in Thailand. “Thailand is facing a severe demographic crisis due to a record-low birth rate and a rapidly growing elderly population, officially becoming a ‘fully aged society’ in 2024. This shrinking workforce is dragging down the economy by causing labour shortages, reducing consumer demand, slowing GDP growth diminishing the country's appeal for foreign investment. The demographic shift is creating a major fiscal threat, as a smaller tax base must support a rising welfare burden for the elderly, leading to warnings of potential fiscal collapse without urgent reforms.” There have been some voices in East Asian countries that have pointed out that such low TFRs are not inevitable, but a result of policy choices. Thus, Wasa Ikeda, a Tokyo-based journalist, finds that several interconnected structural factors have created uniquely challenging conditions for family formation in Japan, South Korea and Taiwan. They include extreme academic competition, persistent gender inequality, and the overwhelming and hobbling political influence of older generations. Wada further argues, "The unprecedented fertility crisis in these societies represents not just a demographic challenge but a profound indictment of social structures that have become hostile to family formation," Ikeda concludes. "Until policymakers address these fundamental issues, no amount of exhortation for women to have more children will succeed."7 It appears that there is very limited political will to address the interconnected forces Wada has identified, and therefore, prospects for significant improvements in TFR of East Asian and South East Asian countries noted above are dim. Data in Figure 2 suggests that TFR in China is also very low at 1.01, and prospects for improvements are dim as many interconnected factors Wada identified for East Asia are also present. But given its very large population (1420 million in 2025), and by far the largest GDP globally in Purchasing Power Parity (PPP) terms of USD 41 trillion, suggests that its continuation as a functioning society and civilisation is never in doubt. The main implication of the low TFR in China is likely to imply that it will need to rely on the external sector for growth dynamism, while reliance on domestic consumption will be muted. This will have its own geo-economic and geo-strategic implications for not just China but also the rest of the world. Figure 2 suggests that India’s TFR at 1.96 is closer to the replacement rate. But the average masks uneven TFR among different states. With unrestricted mobility among states, this will have internal economic, labour market, and socio-political implications. India will also need to address the inescapable consequence that, with a lower TFR, it is the improvements in productivity and innovations that will need to drive India’s future growth. Since 2014, the national Democratic Alliance (NDA) government has recognised the urgent need to address demographic issues in a multifaceted manner. But the challenges remain formidable, including persuading younger population that reproducing to facilitate continuation of the society and civilisation should be a high priority. The second important implication for development economics from the TFR data in Table 2 may be drawn from the welfare states of Europe, Oceania, and North America. These regions were among the first to achieve high income status and experience demographic ageing. Even then, the TFR of countries in these regions is higher than that of the East Asian countries. TFR of Germany is 1.45, France 1.64, Sweden 1.43, and Australia 1.64. The TFR of the USA is 1.62, and Canada is 1.43. Their challenge in managing ageing societies arises from their gross misconception that their elaborate social welfare states can continue to function normally when their immigration policies enable a disproportionately large number of people who do not subscribe to their social norms and practices, and in too many cases, indeed to their civilisational values, to enter their countries and become recipients of their social protection systems. The resulting dysfunctionality in their societies has moved their attention away from improving productivity, making progress in emerging new technologies, and on their fiscal and other resources. The implication for development economics is that a country’s economic, social, immigration and other policies can operate when there is overall consensus on social norms, practices, and the desire to advance its civilizational values. There is significant scope for research in this area, and building these aspects into a matrix assessing success in development economics. The main message arising from this column is that in formulating economic, labour market, and social policies, the policymakers must incorporate their impacts on the type of society that will emerge in the medium term, and not just their impact on relatively short-term GDP and similar macroeconomic variables. The development economics must also broaden its assessment matrix to incorporate the impact of policies on the kind of society that will emerge in the medium term. The current development economics literature strongly suggests that plenty of scope for academics and researchers to move in the above direction. References https://www.statista.com/statistics/1034075/fertility-rate-world-continents-1950-2020/#:~:text=Fertility%20rate%20of%20the%20world,fertility%20rate%20above%20replacement%20level - Accessed on 28 December 2025 Roy, Amlan (2022). “Demographics Unravelled: How Demographics Affect and Influence Every Aspect of Economics, Finance and Policy “ New York: Wiley, Accessed on December 25, 2025 Madgavkar, Anu etal. (2025). Dependency and Global Depopulation. McKinsey Global Institute.https://www.mckinsey.com/mgi/our-research/dependency-and-depopulation-confronting-the-consequences-of-a-new-demographic-reality, Accessed on December 26, 2025 https://www.wionews.com/world/japan-births-fell-lowest-on-record-in-2025-won-t-it-have-enough-people-to-run-its-future-economy-1767093532021 https://vietnamnet.vn/en/vietnam-s-birth-rate-hits-historic-low-sparking-urgent-warning-2424037.html#:~:text=Health%20Minister%20Dao%20Hong%20Lan,is%20more%20real%20than%20ever. Accessed on January 3 2026 Wada, Ikeda. 2025.“Why are fertility rates so low in East Asia? It's the society, stupid”, Nikkei Asia. https://asia.nikkei.com/opinion/why-are-fertility-rates-so-low-in-east-asia-it-s-the-society-stupid- Accessed on 3 January 2026- Jan 03, 2026
- Vladimir Adityanaath
