Wednesday, September 16, 2026 | Edition 195 | Item #2

The idea that falling birth rates will inevitably cause economic decline. According to new research from MIT and the London Business School, the decline in the number of younger workers has been accompanied by higher growth in GDP per working-age adult across countries and also higher wage growth across the US, with no negative impact on aggregate GDP or earnings. The decline in the number of younger workers has been offset by an increase in labor-saving technologies and growing high-tech activities. Overall, areas with aging populations tend to have higher growth in income per person, which offsets the relative decline of workers, leaving GDP unaffected by population aging.

The implications of this new research are widespread, starting with the doom and gloom that many people have spread around the impact of declining birth rates. There still may well be consequences, both economic and non-economic, but the research suggests that economies, especially ones with thoughtful public policy responses, have the capacity to adapt to a new demographic era.