World Population Day: Elon Musk Might Be Right About Underpopulation Crisis

Mohit Oberoi, CFA - Author
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Jul. 11 2022, Published 10:11 a.m. ET

World Population Day is being observed on July 11. The U.N. Environmental Program estimates that the world population will hit 8 billion in 2022. While some have been worried about overpopulation, many others including Tesla CEO Elon Musk are worried about an underpopulation crisis.

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China is the world’s most populous country, followed by its neighbor India. Both of these countries’ populations are over 1 billion. The U.S. is a distant third with a population of just over 330 million.

The global population growth has been falling for years.

According to Worldometer, the global population rose 1.05 percent in 2020 to reach 7.79 billion. The global population growth rate has fallen every year since 2008. The last time the global population growth rate increased over the previous year was in 1987 when the growth rate of 1.87 percent was 1 basis point higher than in 1986. Also, the global population growth rate has been below 2 percent since 1972.

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Japan has been an example of an underpopulation crisis. The country has an aging population and hasn’t been open to immigration. Japan is a case study example of how underpopulation can play havoc with an economy.

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The developed world is also facing a crisis of sorts. In most developed countries, the population growth is running below replacement levels. In the U.S., 4 percent fewer babies were born in 2020 compared to the previous year, the sixth consecutive year of fall. The country’s birth rate has been running below the replacement level for years now.

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Even China is worried about underpopulation.

A decade ago, China was worried about overpopulation and had its controversial “one-child” policy in place. Things have turned upside down in the country now and its birth rate has fallen for five consecutive years. Far from penalizing parents who had more than one child, the country is incentivizing people to have more babies, but to little avail.

In 2021, a survey in India showed that the country’s TFR (total fertility rate) fell below the widely accepted replacement level of 2.1. Simply put, the population growth in the world’s three most populous countries has fallen below the replacement level.

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However, this doesn't mean that the global population isn't rising. First, it will take time before the low TFR manifests in the total population. Second, parts of Africa continue to witness high population growth.

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Elon Musk is doing his “best” to address the underpopulation crisis.

Musk has been championing the cause of underpopulation in the U.S. both verbally as well as in action. He has tweeted multiple times about low population growth and called the previous two years a “demographic disaster.”

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After reports emerged of him having fathered twins with Shivon Zilis (a senior Neuralink employee), Musk tweeted that he's doing his “best to help the underpopulation crisis.” Musk termed the falling birth rate as the “biggest danger civilization faces by far” as said that those who believe that the earth is overpopulated are in an “illusion.”

There seems to be some merit in Musk’s argument. The developed world has been battling falling birth rates for years. However, developed countries haven't felt much impact from falling birth rates thanks to immigration.

The global population growth is expected to fall further in the coming years as more women get educated in countries where population growth is still high. China might not find it as easy to increase its population, even though it was successful in curtailing its birth rates in the past.

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