Demography Doomsaying is a common topic these days, although it carries with it a certain political stigma because a lot of Demography Doomsaying occurs among the authoritarian elements of the Right (especially the so-called "alt-right," which is defined by Ethnic-European Identitarianism) - for example, the very first three sentences of the manifesto put out by Brenton Tarrant (the Christchurch mosque massacre perpetrator) were "it's the birthrates. It's the birthrates. It's the birthrates."
But Demography Doomsaying is a mainstream topic in several East Asian nations, particularly Japan and South Korea. Japan recently hit a 125-year low in its birth rate (it is now 1.2 births per Japanese female), and South Korea's birth rate is even lower (and has the world's lowest birth rate). Even the People's Republic of China is facing a collapsing birth rate (see https://www.piie.com/research/piie-charts/2024/chinas-population-decline-getting-close-irreversible). Economists worry greatly about the impact of population collapse on economies, governments worry greatly about the impact of population collapse on their finances (more elderly to take care of via social services, less young people to tax to fund said social services), and (unfortunately) people with ethno-supremacist beliefs worry about the impact of their preferred ethnicity's population collapse on their political project.
But recently I began to think about this subject a bit more closely, and whilst I am likely not the first or only person to have realized this (I fully confess I haven't checked), I have noticed that much Demography Doomsaying reflects an interesting, and flawed, economic understanding of having children.
Let us begin by ruling out some potential 'culprits' for low birth rates.
Firstly, we can't blame individualism or classical liberalism for low birth rates, because East Asian nations are notoriously collectivistic in terms of their cultures, even if they are liberal democracies like Japan. In addition, the People's Republic of China is quite literally a fascist dictatorship ("Socialism with Chinese Characteristics" is, technically speaking, a form of economic fascism), yet is similarly burdened with a low birth rate.
Secondly, we can't blame feminism for low birth rates. China is hardly a feminist society, and both Japan and South Korea still have strongly gender-traditional expectations for the sexes, despite the latter two societies both having small feminist movements. In the case of South Korea, they elected an openly anti-feminist President - such a thing would almost certainly never happen in any Western nation.
Thirdly, we can't blame a lack of religiosity for low birth rates. Japan is quite a religious country, and a syncretism of Shinto and Buddhism is the norm. Buddhists and Taoists combined represent a majority of the Chinese population, and Chinese folk religion is also significant. Some may then argue that a lack of Christianity specifically explains low birth rates, but not only does South Korea have a substantial Christian minority, but the problem of low birth rates also even extends to Russia (see https://www.reuters.com/world/europe/russias-birth-rate-slides-lowest-quarter-century-2024-2024-09-10/), where over sixty percent of the population are Russian Orthodox Christians, and the Russian Orthodox Church is the de facto State Religion.
What has been consistently noted however, since the days of Thomas Malthus, is a very strong correlation between having children and living in poverty. The poorer a country is, the more likely it is to have a higher fertility rate (see https://www.stlouisfed.org/on-the-economy/2016/december/link-fertility-income). Within a country, the same correlation is observed, where poorer people are more likely to have larger numbers of children.
South Korea and Japan are highly wealthy nations. China recently experienced rapid economic growth, and Russia has experienced some of that as well (at least before they invaded Ukraine). In the context of the US, the statistics speak for themselves when explaining how birth rates are impacted by family income (https://www.statista.com/statistics/241530/birth-rate-by-family-income-in-the-us/). Whilst it has been argued that birth rates in the US are more influenced by political affiliation and/or religiosity (see https://www.fatherly.com/health/republicans-have-more-children), the fact that the Democratic Party is now the party of the rich (see https://unherd.com/2022/05/how-the-democrats-became-the-party-of-the-rich/) suggests that it is income that has the impact, not political ideology or religious affiliation (indeed, historical data strongly suggests that religiosity and wealth are inversely correlated).
So, we must ask the same question that vexed Malthus and has annoyed many other demographers: why does poverty seem to encourage the poor to have more children, given that children are expensive to raise?
In answer to this question, I would argue that the question tacitly but erroneously treats having children as an act of consumption. If you see children as an expensive hobby or some form of entertainment or perhaps as an ornament or a social positioning good (i.e. something to show off to the other parents in order to gain social status among them), then it makes sense to wonder why poor people would be more likely to have them.
But having children is an investment behavior (an expenditure of resources with the expectation of making more resources out of it later), not a consumption behavior. A child gives you an additional pair of hands to perform labor with, after you raise and socialize it enough. A child gives you someone to take care of you in your old age presuming the child survives. Once you see a child as an investment in future production, the correlation between poverty and fertility begins to make more sense.
However, this children-as-investment theory is hard to square with the fact that many nations have tried to encourage increases in their birth rates by lowering the cost of making such an investment, and experienced little success at best. A common policy initiative with this intention is granting money to those who choose to reproduce, also known as a "Baby Bonus." Baby Bonus policies were introduced in Switzerland and only had a temporary impact on the fertility rate (https://pmc.ncbi.nlm.nih.gov/articles/PMC8453695/). One Australian researcher found that, in answer to the question of whether or not the baby bonus impacted the Australian birth rate, "the answer... is a resounding no" (see https://theconversation.com/the-baby-bonus-failed-to-increase-fertility-but-we-should-still-keep-it-4528). A different study of Australia's implementation of the Baby Bonus (see https://www.demographic-research.org/volumes/vol42/18/42-18.pdf) suggested that there was a positive impact on fertility, but it was mostly concentrated among "immigrant women with low levels of human capital" (i.e. women who are more likely to be poorer than average), yet this result is quite paradoxical given that wealthier families can likely get far greater ROI on their children. If children are indeed an investment in the future, citizens in Australia and Switzerland at least aren't really acting like rational economic investors.
This leads me to suggest an amended version of the children-as-investment theory: evolved psychological adaptations, not rational responses to immediate economic incentives, drive people in poverty to have more children.
Children are still an investment. Indeed, back in the evolutionary environment, children absolutely were a very productive investment on average, since the primary means of production (the stuff we use to make other stuff) was human labor. Many potential specific mechanisms could be suggested and tested for. Perhaps the experience of crushing poverty just makes people hornier. Perhaps this happens but more indirectly (poverty causing suffering and sex causing a moment of happiness which temporarily alleviates that suffering). Or maybe poverty just made people sexier back then, since subsistence living in a labor-intensive economy is essentially a low-calorie diet with very regular exercise. But whatever mechanism we propose, the evolutionarily-encouraged-propensity-to-invest-under-the-strain-of-poverty theory seems to fit with the facts. Fertility is inversely correlated with income, but the decision to have a child doesn't seem to be strongly responsive to rational economic incentives. Rather, the decision seems to be made in accordance with archaeo-economic incentives that impacted human evolution and favored those who were more inclined towards breeding their way out of poverty.
So why does this matter?
Well, if my theory is correct, governments will have at-best-modest success using economic "carrots" to get people to have more children. Apart from Adverse Selection issues (do we really want more children in poverty or to encourage parenthood in people who are just doing it for the fiscal benefits?), there is strong evidence that pro-natalist policy is insufficient to fix population declines.
So what alternatives are there? The obvious one is truly abhorrent - government-enforced reproduction (if Baby Bonuses are the carrot, this policy is the stick). As a classical liberal I cannot consider this an acceptable alternative, both on simple liberty grounds and on the grounds that there are huge drawbacks to large numbers of unwanted children in a society (unwanted, mistreated children are substantially more likely to become very antisocial and outright-destructive adults).
Another is immigration, which is a complex matter of costs and benefits. The success of it as a strategy for population growth depends on the immigrants having a high level of fertility as well as a willingness to accept the civic values of a free society (such as tolerance, pluralism, the democratic process, individualism and secularism) and, depending on the host society's various policies, deft management of the influx to prevent undue strain on government services and negative impacts on the living standard of the native population. As the European Migrant Crisis (which is still ongoing) makes exceptionally clear, screwing this up is quite easy. Not to mention, as immigrant populations become wealthier, their fertility begins to wane as well. What happens when the wealthy societies of the world run out of poor populations with a willingness to accept classically liberal civic values to source migrants from?
This leaves us with the third strategy: adjusting to a smaller population via automation and bureaucratic cost-cutting. Frankly, this will be necessary. As the number of state-dependents grows and the number of net-taxpayers shrinks (due to the aging population), each individual net taxpayer will have to become much more productive, and the only way to do that is to augment their labor with capital. In addition, taking the chainsaw to the bureaucracy and improving service delivery without cutting the services (as Elon Musk is attempting to do in the USA via the Department of Government Efficiency) is certainly a very compelling approach to reform, but just how much money can be saved this way is debatable, and if what we see in the USA is any indication, the political pushback against it will be savage.
And even then, we may face some degree of reductions in state benefits for the elderly. This is a painful reality, particularly given research has shown over and over again that people generally (even those who think state benefits should be curtailed) have a contributive mindset towards the welfare state; since you've paid into it and been forced to do so, the government owes you what it promised to give you. I cannot contest that argument normatively - a state owes what it promises, particularly to its own citizens (whose rights it necessarily violates via taxation and the monopolization of rights-protective services). But, at least without some radical technological improvements, automation has limitations, cutting the cost of bureaucracy encourages vicious blowback and civil unrest, and clearly immigration has risks and challenges as much as it has opportunities (and it could be argued that, as the world gets wealthier, those opportunities shrink to some extent).
If we have anyone to blame for this, it is those policymakers that designed the welfare state on the presumption of eternal population growth. The result is now that advanced economies across the world are saddled with intergenerational Ponzi Schemes that are in slow-motion collapse. Clearly, cuts to promised benefits are the last resort, but our policymakers better be thinking very hard about the options we have before we reach that point.
Demography Doomsaying is, sadly, here to stay.