Solutions Economic and Market Watch

Join Antony Davies, director of economic research at CFC, as he considers the fallout and opportunities from slowing birth rates and changing population trends.
 
Contact the Economic & Market Watch team at economicresearch@nrucfc.coop. Visit us, download the dashboard and intelligence brief and explore other Solutions media on our website, nrucfc.coop/Solutions. 

Creators and Guests

Host
Antony Davies
Antony Davies is director of economic research at CFC. Visit his full bio at https://www.nrucfc.coop/content/solutions/en/author/antony-davies.html for more.

What is Solutions Economic and Market Watch?

Listen to the latest economic insights from CFC experts John Suter, Sam Kem, and Antony Davies.

Antony Davies:

Welcome to the Economic & Market Watch podcast for the week of August 18, 2025. This is Antony Davies.

Antony Davies:

The Ehrlich-Simon wager is one of the most famous bets in economics. In his 1968 book, The Population Bomb, biologist Paul Ehrlich predicted predicted that by 1990, population growth would have depleted the Earth's resources, causing higher prices and widespread famine. Economist Julian Simon countered that human ingenuity and markets would make resources more abundant even as the population rose.

Antony Davies:

In 1980, they wagered: Ehrlich would pick five raw materials. If, by 1990, the real prices of those resources had risen, Simon would pay Ehrlich an amount proportional to the increase. But if the prices fell, Ehrlich would pay Simon. Ehrlich chose chromium, copper, nickel, tin and tungsten.

Antony Davies:

By 1990, despite the world's population growing by nearly one billion, real prices of all five commodities had fallen — the price of tin by 70%. Simon won. Not only had the "population bomb" not exploded, the evidence suggested that it had never existed.

Antony Davies:

Yes, more people require more resources, but human ingenuity finds cheaper ways to obtain them or discovers better alternatives. And when paired with markets that reward innovation, the more scarce a resource becomes, the more profit incentive humans have to figure out how to make it more abundant.

Antony Davies:

Concerns about overpopulation date to the late 1700s, when 90% of humans lived in poverty at the same time that the world population was exploding. Experts said that global famine was imminent. Yet today, two centuries later, the world's population is ten times what it was, while global poverty is one tenth. But today, we face a new problem that would concern Simon: population stagnation.

Antony Davies:

UN projections show that the world's population will peak at 10 to 11 billion within 70 years.

Antony Davies:

Japan's population has been declining for 15 years. Europe's began falling five years ago and will decline by almost 10% by the end of this century. China's peaked in 2020 and will drop by half. India's will continue to grow to 1.7 billion before it, too, declines. Meanwhile, Africa's will triple to more than 4 billion.

Antony Davies:

In the U.S., growth will continue to slow, topping out around 370 million people by the end of this century. Our population decline will start in the Midwest in the 2030s. The Northeast will follow in the 2040s. The West will grow through at least the 2040s. The South will be the last to see their population decline.

Antony Davies:

At the same time that U.S. population growth is slowing, our population is also shifting away from rural areas toward urban.

Antony Davies:

Centuries of history show that living standards rise with population growth, but the reverse may also hold, and that makes population decline worrisome.

Antony Davies:

Beyond encouraging people to have more babies, there are things we can do to offset stagnation.

Antony Davies:

Research shows that taxation and regulation can affect migration between states. States that are more business friendly and lighter on taxes attract residents from states that aren't. Among the 50 states, California and New York have the highest tax burdens and the highest rates of out-migration. Meanwhile, the two states with the lowest tax burdens, Alabama and Mississippi, are also among the top 10 for in-migration.

Antony Davies:

Immigration also matters. The U.S. birth rate is so low that today more Americans arrive via immigration than via birth. And immigration is a filter. People willing to uproot themselves and adapt to a new language and culture, all for a better life, are entrepreneurial. That's exactly the people we need for continued economic growth.

Antony Davies:

The ongoing shift toward remote work and improved work life balance presents an opportunity for rural America. Its lower cost of living, business-friendly climate and closer-knit communities can offer workers a life style that urban areas can't match.

Antony Davies:

If rural America seizes this moment by investing in infrastructure and promoting itself as the nation's new land of opportunity, it could turn shifting demographics into an economic revival.

Antony Davies:

This is Antony Davies for the Economic & Market Watch podcast. Thank you for listening. Download the weekly Economic & Market Watch intelligence brief and dashboard, and send us email at economicresearch@nrucfc.coop.