Ageing and shrinking populations are no longer distant projections but a defining reality for a growing share of the world. Governments across continents are grappling with the twin demographic pressures of fewer births and longer lives, trends that are reshaping economies, welfare systems, and political debates. What was once considered a challenge limited to a handful of wealthy nations has become a global phenomenon with far-reaching consequences.
The economic implications are among the most immediate and severe. As the number of retirees rises and the working-age population contracts, governments face mounting pressure to fund pensions, healthcare, and social safety nets. Fewer workers are supporting more people who are living longer than any previous generation, straining public finances and exposing vulnerabilities in systems built for younger, growing populations.
According to United Nations data, around 63 countries and areas, accounting for approximately 28 percent of the world’s population of 8.2 billion in 2024, have already reached their population peak and are now shrinking. Another 48 countries and areas, representing about 10 percent of the global population, are projected to peak within the next fifty years. In contrast, the remaining 126 countries, home to 62 percent of the world’s population, are expected to continue growing until at least 2055, with some not peaking until later in the century.
Beyond population size, the structure of populations is undergoing a dramatic shift. Many countries have experienced what demographers describe as a historic reversal, a milestone reached when the share of people aged 65 and older exceeds that of those aged 17 and younger. Italy became the first country to cross this threshold in 1995, followed by several others, including Germany and Japan, by the turn of the millennium. By 2025, 55 countries and areas had undergone this reversal, with more expected to follow. In Italy and Japan, the imbalance is particularly stark, with older adults making up roughly twice the share of children.
Low fertility rates lie at the heart of this transformation. More than half of all countries and areas worldwide now have fertility levels below the replacement rate of 2.1 births per woman. In many major economies, fertility has fallen well below that benchmark. South Korea’s rate stands at 0.73, while China, Italy, and Japan hover close to or just above one birth per woman. Even countries traditionally associated with higher fertility, such as the United States, the United Kingdom, and France, now fall below replacement level.
At the same time, people are living significantly longer. Global life expectancy at birth has risen from 46 years in 1950 to 74 years in 2025, with a growing number of people reaching their 90s and beyond. In about 50 countries and areas, immigration is expected to partially offset population decline, but migration alone is unlikely to fully counterbalance long-term demographic shifts.
Faced with these realities, governments have pursued a wide range of policy responses. Around 55 countries have introduced incentives aimed at boosting fertility, from child allowances to parental leave schemes. Yet despite these efforts, there is little evidence that fertility rates will return to replacement levels in the near future, given the powerful economic, cultural, and personal factors shaping family decisions.
Other measures have been more controversial. Some governments have raised or proposed raising retirement ages, increased taxes, sought to enhance productivity, or encouraged higher labor force participation among women and older adults. Policies have also included greater reliance on migrant workers, reductions in pension and healthcare spending, and, in some cases, debates over ethically fraught options such as medically assisted dying.
These choices have fueled political and social tensions. Many governments already devote substantial resources to pensions and healthcare for older people, prompting some officials to argue that such spending is unsustainable as workforces shrink. They contend that extending working lives and reducing reliance on public support are economic necessities. Some have even suggested a return to family-based care for older relatives, echoing historical norms.
Public opinion, however, often diverges sharply from these views. Surveys across several European countries and the United States show that while citizens recognize the financial pressures facing pension systems, most believe state pensions are already too low. They tend to oppose raising retirement ages or cutting services for older people, and many younger workers doubt they will be able to retire comfortably at all.
Ageing and shrinking populations are emerging as two of the most powerful demographic forces of the 21st century. Their impact reaches far beyond economics, touching questions of intergenerational fairness, social solidarity, and the role of the state. Rather than attempting to reverse these trends, many analysts argue that governments must accept demographic reality and adapt their policies accordingly. How societies respond to becoming older and smaller may ultimately define their stability and prosperity in the decades ahead.
