The consequences of declining fertility are many

#GS-03 Economy

What is the current rate of population increase:

According to the World Population Prospects 2022 the average number of children per woman in the reproductive age group has declined by 50%, from an average of five children per woman in 1951 to 2.4 children in 2020.
Britain took 130 years to change from a fertility rate of five per woman in 1800 to two in 1930, whereas South Korea took 20 years from 1965 to 1985 to achieve the same.
This shows that the newer countries are reducing their population growth rate much faster than what happened previously.
Sub-Saharan African countries are expected to contribute more than half the population growth after 2050 and grow through 2100.
Meanwhile, most advanced economies have their fertility rate below the replacement rate of 2.1, with South Korea reporting the lowest at 1.05 children per woman.
At the time of Independence, India’s fertility rate was six per woman, and it had taken 25 years to reach five, India’s fertility further declined to four in the 1990s and Kerala became the first State in India to have a fertility rate below replacement level.
Currently as per NFHS 2021, only five States have a fertility rate above the replacement rate: Bihar (3), Meghalaya (2.9), Uttar Pradesh (2.4), Jharkhand (2.3), and Manipur (2.2).

Lower fertility rates are viewed as both a cause and consequence of economic development.
Lower fertility impacts women’s education positively, which in turn lowers the fertility of the next generations.
There is a time period during the lowering of fertility when the ratio of the working-age population is higher than that of the dependent age groups.
The falling fertility rate will also lead to lower pressure on land, water and other resources and would also contribute to achieving environmental goals.

Japan became the first country to realise that declining fertility rates meant an ageing population which results in a near zero GDP growth and struggles to meet increasing social security costs.
This shows that a fall in fertility rate beyond replacement level would have a negative effect on the proportion of the working population, which in turn will affect output in an economy.

A rise in education and independence among women would enhance their labour participation, which could arrest the fall in labour participation up to a limit.
An influx of immigrants from countries with higher population growth could also play a positive part.
The advancement in health care and better nutrition around the world have increased the life expectancy and productivity of older citizens which means that we can think about increasing retirement age.
Reforms in the labour market to induce more flexibility in the labour market would encourage working women to have more children and non-working mothers to enter the labour market.