(cont'd from yesterday's post)
A declining birth rate will eventually mean less national wealth. Here's why:
Younger people try risky entrepreneurial innovation far more than older people do. This is the driver of a growing economy (creation of wealth). So growth of total wealth in society slows down as younger people make up a smaller percentage of population.
Entitlement programs will be affected. You may know that U.S. Social Security payments to current payees are supported by current workers' taxes. In 1940 there were 150 workers for every retiree, then 16.5 workers in 1950, and by 2010 "just 2.9 workers were paying for the benefits of each retiree."
China will experience this change. Its "population will soon get very old and then begin to rapidly contract: By 2050 the country's population will be falling by 20 million every five years; one out of every four citizens will be over the age of 65." They've started to see a labor shortage.
From What to Expect When No One's Expecting
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