For much of human history, demographic patterns were reasonably stable; human populations grew slowly, and the age structures, birth rates, and death rates of populations changed only gradually.
In the past 50 years, however, this trend of long-term stability has given way to the biggest demographic upheaval in history, an upheaval that is still running its course. In the developed world, a sharp post-war rise in fertility was followed by an equally sharp fall. These changes in fertility transformed age structures through the creation of a ‘baby boom’ generation. The ageing of this generation and continued declines in fertility and old-age mortality are shifting the population balance in developed countries from young to old. In the meantime, the developing world has experienced a population explosion, the result of improved nutrition, public health infrastructure and medical care.
The rapid increase in the global population over the past few decades has resulted in large numbers of people of childbearing age. This creates ‘population momentum’, in which the populations of most countries, even those with falling birth rates, will grow for many years to come. This is particularly true of developing countries.
Population changes have potentially huge implications for the pace and progress of economic development. For example, an increasing proportion of elderly may act as a drag on economic growth where smaller working populations must provide for a larger number of non-working dependents. Rising life expectancy can also bolster an economy by creating a greater incentive to save and to invest in education, thereby boosting the financial capital on which investors draw and the human capital that strengthens economies. Where a country has experienced a baby boom followed by a decline in fertility, the relative size of the workforce is increased. Countries that are able to absorb the baby boom generation into productive employment can experience a rapid increase in economic growth.