The Economic Challenges of Low Fertility

Abstract

Low fertility has become a characteristic of high-income countries with implications for labor markets, innovation, fiscal sustainability, and social cohesion. This chapter examines the economic consequences of sustained below-replacement fertility and evaluates potential policy responses. While demographic decline poses serious economic challenges, higher labor force participation of women and older workers, greater human capital investments, and technological progress can help to offset demographic pressures. However, effective adaptation depends on sound policymaking. The authors assess the role of family, education, health, immigration, and innovation policies in responding to demographic challenges. Ultimately, demography is not destiny, and coherent policy strategies can transform demographic challenges into opportunities for renewal.