Although many people still believe that the population explosion is the world’s most urgent global challenge today, the real demographic time bomb lies in the falling fertility rates. Today nearly two out of three people live in countries where fertility is below the replacement rate (2.1 children per woman). The United Nations expects that world population growth will begin to reverse in the 2080s, and some academics argue that the turning point could arrive even sooner.
The consequences of the shift are already visible. As shown by the latest Transition Report from the European Bank for Reconstruction and Development (EBRD), the median age in advanced economies rose from 29 years in 1950 to 41 in 2023. The trend is even more pronounced in Central and Eastern Europe: the figures for Croatia, Bulgaria, and Poland are 45, 44, and 42 years respectively. In Nigeria, by contrast, the median age is only 18.
But for the economies of Central and Eastern Europe there is a difference: they are undergoing the demographic transition with income levels that are between three and four times lower than those of advanced economies. In other words, they age before they become rich, and that leaves them less room to sustain growth.
“The decline in fertility is a reflection of profound changes in social norms and in cultural attitudes toward family planning”
The decline in fertility is a reflection of profound changes in social norms and in cultural attitudes toward family planning: today people marry later or (more and more) simply do not marry. The BERD report reveals that more than three-quarters of the baby boomers in the Eastern European countries of the EU married in the early thirties, while the share among millennials hovers around two-thirds.
Maternity has also changed. Women are having children later, as a result of a longer educational trajectory, shifts in gender roles and evolving professional aspirations. From 1990 to the present, the average age of first-time mothers rose from 24 to 29 in Croatia, from about 24 to 28 in Poland, and from 26.8 to 31.5 in Spain. There is a growing share of women who do not have children, and those who do tend to have fewer children than in previous generations.
Late motherhood and persistent economic pressures make it harder to form larger families, so many people have fewer children than they might wish. Surveys show that in rich countries, people have about one child less on average than the number they deem ideal. In poor countries, where fertility rates remain high, the opposite is true.
“The combination of falling fertility and rising life expectancy entails rapid population aging and a shrinking active population, which will raise the share of retirees relative to workers and erode living standards”
The combination of falling fertility and rising life expectancy entails rapid population aging and a shrinking active population, which will raise the share of retirees relative to workers and erode living standards. According to the BERD projections, demographic pressures will shave about 0.4 percentage points off the annual growth rate of per capita GDP in Europe’s emerging economies by 2050.
Foundational Adjustments in the Face of Demographic Change
Some of these pressures could be alleviated through . For example, raising the retirement age can extend the span of productive employment. An increase in immigration can offset the decline in the active workforce, and technological innovation can boost productivity.
But none of these measures will be easy. France’s stalled pension reform attempt is a clear example of how unpopular any rise in the retirement age is. Likewise, an increase in immigration (especially if it is the scale needed to offset demographic decline) can only provoke voter resistance in countries where immigration has become a major political dividing line. And although advances in artificial intelligence may raise the productivity of some workers, many others will be left without jobs and will need retraining.
“As populations age, so does the electorate, increasing the influence of older people on policy-making”
The aging of societies also ages the electorate, which increases the weight of older people in policy formulation. With higher electoral participation, they tend to favor increases in spending on pensions, health care, and defense, while showing far less enthusiasm for immigration, education, or short-term risk-taking for long-term growth.
Also aging is the political leadership (especially in countries with entrenched leaders); this reduces the room for much-needed reforms of pension systems, changes in the labor market, and pro-immigration policies. Reversing this trend will require not only bold policy decisions but also a sustained effort to mobilize younger voters.
But despite these limits, demographic forces do not dictate an inescapable fate. When reforms (for example, in pension systems) are approved with sufficient lead time and implemented gradually, they are less likely to face political opposition. What is needed is political courage: the willingness to explain trade-offs, resist immediate pressures, and act before demographic realities narrow the space of options. Only leaders who are prepared to confront those realities today (and above all, to involve younger voters in the debate) can ensure shared prosperity in the decades ahead.
© Project Syndicate, 2025.
In collaboration with the “la Caixa” Foundation
