Dependency and depopulation: Confronting the consequences of a new demographic reality

McKinsey & Company

Research

82 Pages

McKinsey highlights a demographic tipping point: two-thirds of the global population now lives in countries with fertility rates below replacement level, triggering “obelisks” of aging societies. The “first-wave” economies—like advanced nations and China—face shrinking workforces, underscoring urgent needs for productivity boosts, policy reform, and restructured retirement systems.

Key Takeaways

Fertility below replacement: Over two-thirds of countries now have fertility rates under 2.1, reshaping populations from youthful pyramids into aging obelisks.
Labor shortages hinder growth: The working-age share in advanced economies and China will drop significantly, slowing GDP per capita without intervention.
Multi-pronged policy needed: No single solution can offset demographic drag; a mix of productivity, migration, fertility, and retirement reforms is required.
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