Why you should stop worrying about the birth rate collapse
Money & Macro · 2026-08-20 · 16 min
https://www.youtube.com/watch?v=IabDOXf7AcsVideo summary
A study links low 1950 fertility to faster growth, but South Korea’s 0.8 rate and aging risks challenge the optimism.
A new study by Daron Acemoglu and coauthors compares fertility and economic data across more than 100 countries over 70 years. Countries with lower birth rates in 1950 later recorded faster GDP growth, more patents and greater high-tech exports, suggesting labor scarcity can push firms to innovate. A historical example comes from Britain’s war with France: naval recruitment tightened farm labor, raised wages and made threshing machines more worthwhile. But the presenter warns that today’s fertility collapse is far more extreme: South Korea’s rate is 0.8, and annual births fell from about 650,000 in the early 1990s to 230,000 last year. The study also coincided with falling dependency ratios, unlike today’s rising burden of retirees. The presenter remains concerned about fewer workers supporting more pensioners, while allowing that labor shortages could still spur innovation; history cannot yet show which force will dominate.
Chapters
- 0:00Intro: a study links 1950 low fertility to faster 70-year growth
- 1:33Demographic doom: fewer workers and smaller markets threaten growth
- 4:46War’s unexpected blessing: 1809 labor shortages sped up British farm mechanization
- 7:2870-year evidence: low-birth countries grew faster and exported more high-tech goods
- 9:53Why this time could differ: South Korea’s 0.8 fertility and rising dependency ratio
- 12:55Conclusion: pension risks remain uncertain as labor shortages may spur innovation
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