But humanity still needs them

By Tom Evslin

Used to be that people needed to provide for their old age. Even if they owned or had rights to a farm, it wouldn’t support them without someone to work it. Same for other productive assets like a forge. Those without assets hoped to be cared for as part of their children’s households and/or by their children’s earnings. The lower the survival rate of infants and children, the more pregnancies a woman needed to have for a good chance of support in her old age.

The rich didn’t need to have as many children as the poor. Their children had a better survival rate; and their assets, if necessary, could be used to pay for food and people to care for them. For most of history, as survival rates improved, women had fewer children but always enough children to keep the population as a whole slowly growing.

Even today very poor countries have higher fertility rates than better off ones. Until about 1977,as shown in the chart below by Jesús Fernández-Villaverde, the OECD (most developed countries) tended to have lower fertility rates the richer they were.

But after 1977 the correlation flipped: richer countries tend to be more fertile. Note that the total fertility rate (TFR, the average number of live births per woman over her lifetime) of OECD countries was 1.48 as of 2024, well below the 2.1 needed to maintain the population level without migration.

In his paper “Terra Incognita” written with Patrick Norrick, Fernández-Villaverde says:

As of 2026, humanity is likely below replacement fertility. That has never happened before, not in wars or pandemics. But the real surprise is that the fall has been concentrated in low- and middle-income countries and among poorer and less educated women.

Falling below replacement follows from a fast and accelerating drop in fertility worldwide. Demographers and economists have long expected fertility to fall, but its decline over the last decade has been unusually steep, above all in countries where no one expected such a fast decline. Mexico’s total fertility rate (TFR) in 2025, 1.51, for instance, is likely to be below that of non-Hispanic whites in the U.S., 1.57, despite a GDP per capita at purchasing power parity (PPP) of only around 28% of the U.S. level. Even more striking is Tunisia, whose TFR in 2024 stood at 1.45 with a GDP per capita at PPP of 18% of the U.S. level.

Mexico and Tunisia are not anomalies. In 2025, Thailand was at 0.87, Colombia at 1.01, Iran at 1.35, and Brazil at 1.52, all at a fraction of U.S. per capita income.

This inversion of the historical relationship between income and fertility across countries also seems to be happening within countries. The negative relationship between household income and fertility, one of the oldest regularities in demography … flattened in the U.S. between 1980 and 2010, a phenomenon that seems to be spreading to other countries (a similar statement holds for the relation between fertility and education). Even more surprisingly… the cross-country correlation between the TFR and the female labor force participation rate has also become positive in the OECD data.”

Why, for the first time in known history, are the poor having even fewer children than the rich? Why are working women having more children than those who don’t work outside the home?

After extensive statistical analysis, the authors can’t find any single factor to account for the observed data. They speculate that both the drop in TFR worldwide and the reversal of the traditional relationship between affluence and number of children are caused by a complex they call “modernity.”

Our conjecture is that a modern society makes the third child expensive and childlessness cheap, even when GDP per capita is only a fraction of the frontier (i.e., the U.S. level). Children are expensive because a child must be equipped to function in a world of formal knowledge and credentials, which takes years of costly investment.

At the same time, children are no longer productive in the household, not even for smaller chores, having been replaced by “engines of liberation” such as the electric appliances now available even to poor households .

Modernity also imposes tight career schedules, set by large-scale organizations, that collide with the biological clock and with the kin networks that used to share the work of raising children. And modernity makes childlessness cheap, because an impersonal society imposes next to no penalty on those who have no children: pensions and health care do the work that sons and daughters once did (Boldrin et al., 2015), and lineage counts for little.

In other words, children, who once were an essential investment for which there was no substitute, are now a very poor investment to which there are many alternatives. Instead of paying for the college education of someone who may or may not put that education to productive use and may or may not support me in my old age, I can simply put the money into annuity.

Similarly children take a lot of time; if I put that time into work, I’ll have more assets for a secure old age. In fact with Social Security and Medicare and the like, society is doing this saving for me (partly with my tax dollars); I can live better now on the money children would have cost me. (It’s important to note that the birth control pill makes family planning much more effective than it ever was and, along with modern equality, gives women much more control over the number of children they will bear the burden of raising.)

OK. But that still doesn’t explain why the affluent are now more fertile than the poor. There is a simple (although conjectural) explanation: many people like children; they want to have them. The children are a financial burden rather than an asset, but so is a yacht. Children are often fun. I’m speaking as a father and not an economist; but, in economic terms, children are a luxury good, something you pay for because you want it, not because you need it.

Back when we all believed that a Malthusian nightmare of population explosion would doom humanity, we might have just said: “Great news. Less children means less overcrowding, less anthropogenic global warming, less poverty. Only those who can afford children are having them.”

But there’s a problem!

We may not need children family by family, but we still need enough of them collectively to take care of us as we get old. Maybe robots will change our geriatric diapers and feed us; but we still have a problem. The collective pension schemes like Social Security and Medicare are Ponzi schemes; they count on payments by future workers to make payouts to the retired. Works fine so long as the number of current workers is much greater than the number of retired they support. Breaks catastrophically if there aren’t enough current workers. Even our private pension savings may be insufficient if there are not enough workers to invest in or if a worker shortage leads to rampant inflation. That’s where we’re headed!

Something must change. In fact, some things are changing but we’re not dealing with that change very well (see my post “Where Are We Going to Recede From?”). The paper I’ve been quoting from is called “Terra Incognita” because we literally have no experience in human history with a general decline in population; we’re in unknown territory.