Fertility Crisis Will Cause National and Global Financial Crisis and Greatly Increases Risk of Dying Poor and Alone

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Robin Hanson had a lot of tweets about the global fertility crisis. Nextbigfuture has had many articles about the important topic of the fertility crisis.

I will be talking with Robin Hanson this Friday and posting a video recording of the conversation.

I cite the movie Inception where the Japanese character Saito offers the hope of the main character reuniting with his children by taking a risk. Japan is the nation that is leading the way into a fertility crisis with not enough babies or children. The lack of children and families is increasing the percentage of people who are growing old and dying alone. Kodokushi (孤独死) or lonely death is a Japanese phenomenon of people dying alone and remaining undiscovered for a long period of time. NLI Research Institute, a Tokyo think tank, estimates that about 30,000 people nationwide die this way each year. However, there is a far larger number of solitary and lonely elderly in Japan. A study on Japanese older adults reported that 31.5% were socially isolated. In addition, it has been reported that 27.0% of older adults in the United Kingdom and 24% of older adults in the United States are socially isolated. People cannot unite with children that they never have. They have to take a leap of faith to have children.

For Japanese women born in 2000, between 31.6% to 39.2% will remain childless throughout their life according to estimates from the Tokyo-based National Institute of Population and Social Security Research (IPSS). The statistics in Japan and countries with 1.0 total fertility rate is that 40% of women and 50% of men will be childless. Research in Europe shows that childless individuals in family-oriented countries are more likely to become isolated.

As Inception says, do you want to take a leap of faith or become old filled with regret. Waiting to die alone.

Nextbigfuture has had many articles about the important topic of the fertility crisis. A shrinking and aging population can lead to a permanent global great depression.

The Great Depression was a global event in the 1930s. There are proposed definitions of economic depressions, which are
* a decline in real GDP exceeding 10%, or
* a recession lasting 2 or more years.

I am writing about it because it has already been happening in Japan. Japan’s population peaked in 2008 at over 128 million and they are now at 122 million and will be under 100 million in 2050. The median age in Japan is now 48 and will be about 55 in 2050. Japan’s GDP peaked in 1995 at $5.5 trillion. It is now 28 years later and its GDP is 20% less.

Japan was the second biggest economy in the world and is now third and will soon drop to fifth. I am writing about it because I see the math and the population demographics. I see there are too few babies and there are too few women of fertile age. I see the fertile women numbers dropping. This problem is over ten times bigger than climate change. I see the risk to the China and Japanese banks and the global financial system. There is no uncertainties like in some climate science. There is no disputing how many women are in each 5 year bracket of various national population pyramids.

Real estate constitutes about 30% of China’s GDP, making it the single biggest contributor to the world’s second-largest economy. Japan’s population decline of 6% from 2008 to 2023 and median age increase from 35 to 48 caused its real estate to halve over the last 25 years. This is less demand with the same supply. If China experiences the same thing or more then its real estate will crash to less than half. China could lose 20-30% of its population and median age from 39 today to 50 in 2050. This alone would be a 15% hit to China’s GDP.

In 2018, I wrote that the world will need free egg freezing, free IVF and an army of surrogates for each nation.

In 2018, China had about 200,000 babies per year from IVF. I predicted in 2018 that over the next ten years, China will push towards using free egg freezing and free IVF and baby bonus payments to drive up fertility rates. It makes no sense to allow couples to drift into infertility when there is a national baby bust.

In China, maximizing egg freezing and IVF could add 40 million babies per decade from 2030 onwards and 10 million in the 2020s. This would nearly balance out the 2100 population to 1.39 billion. However, free IVF and free egg freezing could still fall short of maintaining desired population levels. The Chinese government of government-controlled hospitals and clinics would then have billions of frozen eggs. 40% of frozen eggs go unused.

The Chinese government will need to choose to recruit domestic or immigrant women to act as surrogates. Those willing women could rent their womb to bring to term selected frozen eggs.

China population is shrinking but more important to population collapse is the number of girls 0-4 is half the number of women who are in 35-39 and aging out of fertility. The biggest problem with China has a fertility rate of 1.09 is that there are only 0.54 fertile daughters produced by the average women. The Fertile women population plummets far faster than overall population.

IF China still has a fertility rate of 1.09 from now to 2050, then its population will drop below 1.1 billion. They will lose more than the entire population of the USA. A drop of over 20% in overall population could halve the working age population. This will be a massive hit to China’s economy and the world economy.

In 2023, < a href="https://www.bloomberg.com/news/articles/2023-06-15/beijing-to-reimburse-ivf-costs-as-china-tackles-plunging-birth-rate">Beijing is making invitro fertilization and other reproductive procedures free as China gets more aggressive handling dropping birth rates. This is as I predicted in 2018.

In 2023, China’s capital Beijing will pay for IVF and “semen storage” in its latest move to tackle the country’s shrinking birth rate but some experts warn it won’t work. As of July 1, 2023, 16 types of assisted reproduction technology will be available under Beijing’s health care system. In-vitro fertilization (IVF), embryo transplantation, freezing and storing semen will now be included under basic insurance, said Du Xin, deputy director of Beijing’s Municipal Medical Insurance Bureau.

A Chinese study has found that using a method called preimplantation DNA methylation screening (PIMS) the live birth rate of assisted reproductive technology increased from less than 30 per cent to 72 per cent. The study, led by researchers from the Chinese Academy of Sciences and Shandong University, was published in the peer-reviewed journal Cell Research on May 8.

The ICMART preliminary data also record that globally around 750,000 babies were born from IVF in 2019. This has likely increased to 1 million babies per year in 2023.

China (1 million cycles) and Japan (455,000 cycles in 2019) now account for almost one half of all global IVF cycles, and far outstrip former treatment front runners (USA approximately 280,000 cycles, Spain 129,000 cycles, France 117,000, and Germany 107,000).

10% of all babies born in Denmark are by IVF. China is likely at 4-5% of all births are from IVF.

There are many couples and women who end up involuntarily childless. They overestimate how late they can successfully have children. Free egg freezing at a young age (18-25) for all women and free IVF would mostly prevent involuntary childlessness. IVF can be successful with young eggs for women into their mid-40s.

23 thoughts on “Fertility Crisis Will Cause National and Global Financial Crisis and Greatly Increases Risk of Dying Poor and Alone”

  1. Anti-aging life extension is the cure for this problem. There are too many jack wagons who fail to see this.

  2. China’s RE crash is entirely of its own making due to speculation and rent seeking policies instead of rewarding building and taxing land, not building. I have known the economist Michael Hudson for over a dozen years; my activist Georgist group sponsored him twice at the Pace University Left Forum. Hudson made regular trips to China at the near highest levels of policy making to convince them to impose a Land Value Tax and to untax buildings. This would have promoted healthy, affordable housing, not speculative ghost towns where no one can afford homes or even want to live there.
    In the West, the problem is even bigger, with the wealthiest sucking money for useless speculation out of the real economy. Efficient allocation of capital is mostly hogwash. Yesterday it was announced that the oil industry spent more on stock buybacks and dividends than on exploration. Industry is like this all over, says economist William Lazonick. He and Hudson both claim over 90% of corporate profits now go to buybacks and dividends, mostly benefiting the C-suite execs, instead of production enhancements, training and R&D.
    Meanwhile, supposedly worker desperate China can’t figure out what to do with >20% of its highly educated 16-24 year olds and they are unemployed (and now hidden from the stats China releases, since July). The demographic bomb is nothing compared to the speculation and rent-seeking megabomb.
    Japan is growing again, passing Germany to be the #3 economy.
    The rest of the world will eventually stabilize too. Tripling the human population in one person’s lifetime was the exception, never normal for humans or any other species either. With environmental stresses at every level, and too few taking the advice of NBF on growing food, preserving water, etc., the planet needs a rest from our appetites, which grow exponentially faster than our numbers. Why shouldn’t Africans, SE Asians, etc. enjoy the fruits of wealth the West takes for granted? Only because the Earth can’t support that in such numbers? To heck with that, the Global South says.
    The tech fix-merge is coming too. If we don’t kill ourselves first, humans will be mostly unrecognizable in 100 years, cyborgs, genetically enhanced, living 100-150 years on average. Our perspective has already changed from live fast and die young to wait a few years, there’s time…except when it comes to fertility, where there really isn’t, for now. But there will be tech fixes to that too, including artificial wombs, as well as the other things already mentioned. This is just a pause, not the end of humanity.

  3. The Global Economy Is The Unfriendly AGI We’ve Been Waiting For — NOT To Turn Humans Not Into Paperclips But Rather Into Mechanical Turk Sterile Workers — And All The Hysteria About “Unfriendly AI” You Are Seeing Is The True Unfriendly AGI’s Smokescreen.

  4. That “Where have all the babies gone” graphic is inaccurate. Just for starters, it shows China (which is really 1.2, we thing), Japan (which is really 1.6), and Russia (which some report as 1.5 although that is probably way high now) as being in the “2” band. Rounding up isn’t really kosher. The chart should be in ranges, less than 1, 1 or higher but below 2, etc.

  5. As long as there continues to be an affordable housing crisis in the Western world, women will naturally not want have a lot of children. Housing inflation (high rent and high mortgages) is at the core of the growing poverty and political anger amongst the middle class.

    • Housing inflation results from currency inflation used by the government to print currency and steal the purchasing power of working people to pay for the votes.

      • Currency inflation also increases wages so the main problem with inflation is the interest rates hikes used to bring inflation down for those paying back variable rate loans. Housing cost is basic supply and demand. Is housing density great enough that most people can live close to their work? Is transport infrastructure keeping up? If not costs will be very high close to the city. What proportion of houses are owned for living in rather than as investment rentals? Has housing construction kept up with population? The desirability of the city. All that determines housing costs.

      • I’m no catholic but I can’t imagine life without the adventure of having kids. Admittedly I’m well off enough that finances were never a serious factor in the choice. But in terms of general wellbeing and life enjoyment I would never have it any other way. I do not really understand the negativity re kids.

  6. I think there is some hyperbole in play.

    FIRST, who cares really? With the rise of Artificial Intelligence — which let’s face it, will NOT be declining anytime soon — and the inevitable injection of that AI into a vast swath of ‘jobs’ which humans presently occupy, the on-paper and at-shipping-dock ability of our civilization to produce mountains of stuff … will continue, even if the world population drops by 50% or more. So, if from a ‘production’ point of view, the position is moot.

    SECOND, Youngsters of this present 2023 world are coming to a great big schism in purposefulness. Way back (say 1940s), church-and-community acknowledged that maturing men and women both have an almost irrepressible urge to mate. Often. And the inevitability therein is ‘kids’. And church-and-state-and-community saw the inevitable flush of kids as perfectly normal, and to be praised. Educated ‘for free’, to help civil society prosper. Medicated for free, if one couldn’t afford it. Marriage to help raise the kids competently.

    The Great Schism is that the present reproductive generation is feeling a whole lot of ‘but why bother?’ for the enterprise of following one’s biological urges. Kids are not ’empowering’ or even terribly ‘fulfilling’ for most electronically tethered youth. They’re taxing, they’re vexing, they’re annoying, and worst of all, they’re inconvenient almost all the time. Why would anyone young want to accept those terms and conditions?

    Nope. DARWIN is still merrily at work. The overabundance of population is immolating itself demographically, but not completely. Way fewer people will leap into the future. And though we haven’t instituted or lobbied for eugenics, I don’t see that as very far off either. Maybe not … after all, AI will be doing almost all the ‘dumb jobs’. People — maybe even the majority — will be able to exist on universal income payments, going forward.

    Well after I’ve been turned into worm-food, I expect. But still, it’ll come. The only people really ‘working’ will every year be limited to the ever smaller demographic of clades of higher IQ people. And no matter how much it is an ethical quagmire, only measures such as Universal Basic Income (AKA “Welfare”) aim to empower ‘the rest of us’ with sustenance enough to survive without prosperity.

    But the trick is, to also make sure that Planned Parenthood is active and acting in its unspoken role as a eugenics provider of societal acceptance. Which is what it is. Much though the Catholic in me is just crazy-angry at the prospect.

    Anyway.
    Enough to get me banned.
    Or burned.
    … at The Stake …

    ⋅-⋅-⋅ Just saying, ⋅-⋅-⋅
    ⋅-=≡ GoatGuy ✓ ≡=-⋅

    • Yay, it’s Goat Guy again!

      Yep. Many people, Elon Musk among them, are concerned that the reduction in births below replacement may pose an existential threat in that it may be irreversible. Much like the supposed concerns about London becoming buried in horse manure, it is to be expected that this might not really be a concern in the long run.

      With things like radical life extension, age-reversal, cyborgs (advanced prostheses), AI/SI, man-machine interfaces, along with many other changes, all seemingly just around the corner, I am sanguine about the continuance of the human race in the face of falling birth rates. The planet probably should not have to support more than about a billion paleo-style people anyway, and much better that we get there by attrition (and a partial ‘hiring’ freeze) than by any other means.

      The future does not need to be “Meet the Duggers.” All of us are the descendants of people (and before that, creatures) that managed to meet or exceed replacement birth rate for around 3.7 billion years. It has not been bred out of us in a couple of centuries.

      But if a government really is worried and is serious about increasing its birth rate? Well, to start with, we assume the country is somewhat developed and able to afford this, as it likely wouldn’t be having a depopulation problem in the first place, otherwise (with some exceptions, sorry China).

      Gov’t picks up the ticket for infertility issues, for OB GYN visits, and for all costs of medical treatment during pregnancies, for childbirth (deliveries), and for a basic level of medical care for all children under 18. (Basic levels of national health care to remain a separate issue, for now, but this probably also plays into keeping population numbers up.) There would also be basic allowances for children’s clothing, food, shelter, and education, with some serious safeguards to ensure they are getting these things. And, real big one, free childcare, as well as childcare credits if not used.

      Sounds too expensive? Hey, I thought they said they really wanted these kids. They got to put their money where their mouth is or forget about it. When they get serious enough, they will. Besides, accelerating levels of automation will pick up the tab.

      Not Catholic myself, but all my serious girlfriends, and both wives, turned out to be. Purely coincidence on my part at least so far as I know, yet I noticed none of them were against taking precautions except when we specifically wanted kids. I do have six grandkids though, with more on the way. All six parents have good jobs, but the mothers all work from home, either a lot or exclusively. Hmm, maybe something important about that, too. Just saying.

    • You chose your pet peeves as sole scope for the above. So it predicts only a slice of the future.
      If indeed it happens in a vacuum as the above pretends.

      The future is not just ai or any single development.

      Curing aging is inevitable in moral terms. Moral terms which seem (?) to be non-negligible in your intent… So from a not Overton window-limited but morally correct perspective, the above curmudgeonly perspective is not offensive but not right either.

    • I think you’re right about Artificial Intelligence but it does not exist yet nor is it likely to exist soon. All the products being called AI today aren’t. They are sophisticated machine learning language models and that’s all. At the moment we don’t have the first clue how to build True AI because despite mountains of data about brain function we still don’t know how the brain produces intelligence/consciousness.

  8. If you want to have a lot of well educated, hard working, honest citizens then you need to REWARD the parents that produce these children.
    Seriously.
    Parents should receive a 20% bonus per child added to their Social Security benefits (incentive to have MORE children) and an additional bonus equal to 25% of the taxes their children pay (incentive to produce tax PAYING children; children not on welfare, in jail, or druggies).

  9. The point of life is to create more life. The childless are taking themselves out of the genepool to earn sad Darwin awards. We’ve got 4 kids now, totally worth it though glad I waited. Last newborn son this year at 48, first at 38. Planted tropical hardwoods for the future, they’re ~30cm dbh now and >20m high at 8 years. Time works for you when you plant trees. If the rat race isn’t working, go back to the land.

  12. I went to a poor rural elementary public school, an underfunded crowded urban junior high and high school, and most of my working life has been in retail. Dying alone isn’t a bug, it’s a feature. Dying poor might have more to do with a near 50% tax burden on society than on my neglect to provide the world with more versions of myself to kick around for the next generation. If people are bitter about my lack of production of future wave slaves then good. They can eat bitterness. I may die poor and alone but I will be laughing at the survivors. No regrets.

  13. I know of plenty who have children who then move hundreds or thousands of miles away so having spent their lives and money raising kids they are still poor and alone.
    Personally I have not had kids and was able to save and retire early. For my wife and I this is the happiest time of our lives.

  14. Egg freezing and IVF won’t help much if people can’t afford education and housing and healthcare. No one wants to struggle. A life of subsistence is no longer the only option. We want reasonable financial security. We want to enjoy our lives and have children too. We are willing to work and sacrifice for it but by the time we are ready we are too old to do either. There is massive financial insecurity in the world. Here in America there is the wealthy getting wealthier and everyone else stagnating or falling behind. Most of the wealthy I see and read about are just engaged in financial manipulation and rent seeking not doing anything productive. Most people I know are productive yet paycheck to paycheck. It is not all because of keeping up with the Joneses. When you work multiple jobs, have low wages, crappy or no benefits, and no job security and one unexpected expense puts you into a debt spiral you can’t get out of you make the only sane choice which is to delay and ultimately not have children. I work. I’m frugal to stay out of debt. I am not the only one. Having children would be financial suicide. Brain if you are really worried then sell your assets and pay me and others to have and raise kids. You don’t even have to give it away for free. Your spending is someone else’s income. If you and Elon and whoever Robin Hanson is are not willing to do that then you must not actually take this problem seriously. My take on it but do I really care? Dead is dead whether I have kids or not.

  15. Hm… Or you just wait a while to let natural selection have its course.

    In Sweden, ~15% of couples have 3 children or more. If you wait a couple of generations, the population will be smaller but the average fertility will be fine. In the mean while, you use robots and industrialization to compensate for the (temporarily) shrinking labor force.
    With a more family oriented population the market for culture would change ever so slightly. Movies depicting women as – essentially – men, who care little for children would resonate slightly less with the audience. So the culture would shift a bit, further enhancing the fertility.

    Is this not vastly preferable to making child bearing a mechanized industrial process?

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