• China’s population has started shrinking a year ahead of schedule, with India projected to surpass China’s population in 2023.
• Aging demographics are a source of national weakness for all industrialized countries, with fertility already low or falling fast everywhere on Earth.
• Aging can reduce living standards by increasing the old-age dependency ratio, ossifying management, and reducing entrepreneurship.
• Research literature generally finds that aging is a drag on productivity, with studies finding a strong negative effect on growth for a number of economic variables.
• Strategies to fight against the tide include building more machines, having workers retire later, and improving capital allocation and education.
• In the long run, solving the aging problem will require figuring out how to entice the populace to have more kids.
Published January 20, 2023
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