Shrinking Societies: The Other Population Crisis

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Such policies only have moderate success, says Dimiter Philipov, a research group leader at the Vienna Institute of Demography in the Austrian Academy of Sciences. As subsidies mainly cause people to have children earlier, the number of births typically increases in the first few years after a policy is passed. The allowances are much lower than the amount needed to raise a child, but "this is a success because it brings in more babies and makes population changes smoother," he says.

Also, while declining fertility was once attributed to the falling marriage rate, today the deteriorating job environment also affects people's decisions to have children, according to NLI Research Institute in Japan. Thus, in developed countries, rather than offer financial incentives, Philipov says, it is more effective to relieve pressure on parents through child-care services and ensuring job security for mothers. "Some would say no one has done it better than France," where there is a broad menu of services for women and parents, says Haub.

Ideal Fertility Rate

Some argue the need to boost the fertility rate might not be so urgent. Tomáš Sobotka, a research scientist at the Vienna Institute of Demography, wrote in February in a column for The Guardian in the U.K. that demographers have been envisioning the demise of Europe since birthrates in the region began declining in the late 19th century, but "it is not population size but affluence and technology that make some countries more powerful than others."

Philipov says a debate has emerged about the ideal fertility rate. Advances in science and technology that boost productivity might compensate for a fertility rate below the replacement level, such as 1.7 to 1.8, he says.

Still, a fertility rate of 1.4 or 1.5, as seen in many countries, is "too low," Philipov says. At that level, the number of entries into the labor force becomes too narrow, making it difficult to support pensioners and children.

Elder Care

As fewer children are born, the fastest-growing age group in the world is people age 80 and older, according to the U.N. In 2000, there were about 4 people over age 85 for every 100 people ages 50 to 64; by 2050, it will rise to 11.

The situation is more dire in places such as Japan, where the Population Reference Bureau predicts there will only be one working-age person for every person over age 65 in 2050. Already, there are long waiting lists at nursing homes in Japan's cities. To meet demand, the government has been recruiting, testing, and training nurses from Indonesia and the Philippines.

Also, new technologies are being introduced in Japan to serve the elderly, although they are no substitute for people. For example, companies have reportedly been designing robot caretakers, devices for remote medical care, and cars that monitor brain activity to assist older drivers.

Over the next 40 years, the age pyramid will be upside down and technological advancements will only provide limited relief. While demographic trends are difficult to change, Haub says, "something will have to happen."

Click here to see the 25 countries with the fastest-shrinking populations.

Wong is a lifestyle and real estate reporter for Bloomberg Businessweek.

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