Nicholas Eberstadt holds the Henry Wendt chair in political economy at the American Enterprise Institute and is the author of “America’s Human Arithmetic.” This piece was adapted from a July AEI report.
Can America continue to prosper even if it veers into an indefinite period of depopulation?
The question is not as outlandish as you might think. For the first time in generations — since the Great Depression, in fact — the prospect of population decline looms on the U.S. horizon. Yet almost no serious consideration has been devoted to how well the United States will fare as its numbers contract. That inattention could prove costly. It’s possible that depopulation could arrive with surprising speed — potentially even before a baby born this year enters high school.
A switch from population growth to population decline could mean wrenching changes for America, placing unfamiliar new pressures on public finances, businesses, communities and families — indeed, on our entire national system.
Fortunately, a depopulating America can still prosper — in theory. The power of human ingenuity and adaptability made the world much richer during the era of the global “population explosion.” It can do so in an era of long-term population decline, too. U.S. history demonstrates our nation’s exceptional advantages over others in both ingenuity and adaptability.
But major changes in policy, practice and behavior will be required. To be blunt: America is not well positioned to pass the stress test that depopulation will unforgivingly impose.
The U.S. has developed a whole range of undesirable new habits — political, social and economic — over the past several decades. With steady population growth, it has managed to progress despite them.
But that gets much harder under depopulation.
For decades, the U.S. has enjoyed the most robust demographic growth of any developed society. But both engines powering that expansion — births and immigration — are faltering today.
The last time U.S. fertility blipped slightly above the replacement level was almost two decades ago, in 2007. Now, with under 1.6 births per woman in 2025, America is on track for sharply shrinking future generations of native-born Americans. On 2025 fertility trajectories, in fact, each new birth cohort would be 24 percent smaller than their parents’ cohort was.
As for immigration trends: While accurate real-time figures are notoriously difficult to collect, it’s obvious that U.S. net migration totals plummeted in 2025 because of the Trump administration’s crackdown on illegal immigration. (In fact, it is possible — not likely, but still possible — that 2025 marked the first annual net outflow of population from the U.S. in generations.) With persistent sub-replacement childbearing and a less favorable popular disposition toward immigration (especially illegal immigration), the arithmetic for long-term American population decline is falling into place.
The Congressional Budget Office projects that deaths will exceed births in the U.S. in just four years: i.e., by 2030. At that point, America becomes a “net mortality” society, with the gap between deaths and births steadily widening and only immigration potentially forestalling population decline.
Right now, the CBO expects immigration to postpone the advent of long-term depopulation in America until 2056 — positing a rebound from presumed lows in 2025-26 to stabilize at a level above 1 million a year from 2030 onward. But given all the uncertainties surrounding future migration flows, depopulation in America could actually begin a lot earlier. The CBO expects about 1 million more deaths than births a year for America in 2046. If net immigration, for any reason, fell below that compensatory level, population decline in America would begin just 20 years from now.
With a somewhat more restrictive immigration policy — say, with absolute annual inflows comparable to the Reagan era — U.S. population would enter into long-term decline by 2038, given CBO projections for births and deaths. Just 12 years from now, in other words. And American population decline could, at least plausibly, begin even sooner.
This vision of an endlessly shrinking U.S. population will seem foreboding to many Americans. Yet it is essential to realize that depopulation, if and when it comes, doesn’t preclude ever-greater prosperity — thanks to the remarkable “human-ingenuity-driven” nature of modern economic development.
Already humanity proved it could cheat Malthus during a population explosion. Since 1968, world population has more than doubled. Yet contrary to British demographer Thomas Malthus’s famous prediction, the world today is better fed, healthier and richer than ever. Furthermore, inflation-adjusted prices for cereals — corn, rice and wheat — are substantially lower than they were back then. Indeed, practically all natural resources have been getting less expensive despite unprecedented human numbers.
The seeming paradox of ever-cheaper natural resources and ever-greater wealth for a booming world population is actually not a paradox at all. Human beings are a uniquely adaptable, ingenious, problem-solving animal. We have figured out how to increase human productivity under more or less any material circumstances, regardless of whether the constraints at hand are geographic, climatic or indeed demographic.
In the era of rapid population growth, that meant figuring out how to make essential resources inexpensively available for consumption. In an aging, shrinking world, it will mean increasing productivity through “workaround” improvements in knowledge production, human capital (i.e., health and skills) and a propitious “business climate” to help unlock the value in human beings.
The rise of a worldwide human-ingenuity-driven growth model implies that continuing, possibly unending, improvements in living standards for shrinking and aging populations are within reach. The scope for advances in knowledge production and improvement of skills is still vast and untapped, if there is any limit at all to improving them. Artificial intelligence is only the latest “new thing” — and it’s unlikely the last.
Fortuitously for Americans, the United States would enjoy crucial advantages in a prospective depopulation. The U.S. has been a leader in our modern world’s revolution in human-ingenuity-driven development for generations. That’s why private wealth holdings in the U.S. exceed $180 trillion.
And the quintessentially American characteristics of drive, imagination, coping creatively with “disequilibria” and problem-solving entrepreneurship that accounted for such distinctive economic results can be deployed successfully under other demographic conditions as well.
But America is not as well poised as it could be to take advantage of opportunities that coming population changes may present, and it is all too exposed to vulnerabilities engendered by population decline.
Ironically, the U.S. actually looks to be less prepared to cope with depopulation today than it would have been a generation ago. Highly dysfunctional habits have infiltrated the American social, economic and political fabric over recent decades. Absent far-reaching and sustained reforms, depopulation would exacerbate the vulnerabilities from these dysfunctions, eroding the country’s competitive edge, increasing the risk of stagnation and financial crisis — and potentially compromising the American Dream itself.
Here are five worrying indicators:
First, flagging U.S. labor force participation. To maintain prosperity during depopulation, the United States will require a healthy, well-skilled workforce with high rates of labor force participation. Unfortunately, stagnation and indeed decline dominate participation trends for much of the U.S. workforce. Troubling in absolute terms, the U.S. trends look even more worrisome in international perspective.
U.S. work participation rates for 15-to-64-year-olds are lower today than 30 years ago. In fact, as U.S. labor force participation for the preretirement cohort has been stagnating and declining, corresponding rates in Japan and the European Union have been steadily improving — and are now more robust than America’s.
American performance is being impaired by a number of factors. One of these is troubling new health trends. Other factors depressing modern American labor force rates include criminality (every seventh man in America has been convicted of a felony) and growing dependency on government welfare and disability benefits (1 in 4 prime-age men without children at home is accepting means-tested benefits).
Second, slow and expensive U.S. health progress. The quality of America’s human capital — most specifically including the health and longevity of our people — will increasingly help define and determine national economic possibilities once demographic decline commences. But today, health and longevity are areas in which the United States struggles.
American life expectancy at birth today is markedly lower than it is in any other affluent Western society, even though per capita health spending is far higher. America’s health troubles are concentrated in the working-age population; the mortality risk for people between ages 15 and 59 has basically stagnated for a generation.
Why such halting progress? Cause-of-death data point toward answers. So far in the 21st century, overall age-standardized death rates in America have risen for poisonings (including overdose deaths) and more broadly for injuries (which includes suicide and homicide). But an even greater driver of divergence in life chances between America and other affluent societies has been deaths from cardiovascular disease.
At the same time, America’s excess mortality and morbidity reduce economically available labor, decrease the attractiveness of investing in human resources and increase overall health care costs. These constraints would be felt even more acutely under depopulation than they are today.
Third, weak saving and wealth building for too many. In a shrinking and aging society, saving and wealth building take on special urgency. All else being equal, social aging depresses national saving rates, and thus investment rates, productivity improvement, economic growth and future wealth generation.
The U.S. is fantastically successful at generating private wealth — in aggregate. For a great many Americans, however, the cushion of personal net worth is meager — or nonexistent. This is true for entire strata of American society.
In 2023, according to the Census Bureau, 28 million American households — over 1 in 5 — had less than $10,000 in estimated wealth. Hispanics, Black people, high school dropouts and welfare recipients were overrepresented. But what may surprise is the huge portion of renter homes in this pool. Half of all renters had less than $10,000 in net worth: 24 million households in all.
While the renter-owner wealth gap can be read in different ways, it vividly underscores the importance of savings in the process of lifetime wealth-building in modern America. The most reliable path to amassing personal wealth is through saving: diligently, consistently and over the long term (abetted by the magic of compound interest). Simply recovering lost habits from earlier postwar culture could go a long way in this quest.
Fourth, chronic and worsening federal budget indiscipline. Budget discipline in public finance is desirable in any country serious about enhancing national prosperity, but it becomes critical for societies facing pronounced aging and prolonged shrinking.
Alas, America’s increasingly irresponsible habits in public finance are by now well-established fact.
Over the postwar era, net U.S. savings have undergone an ominous long-term decline: from about 11 percent in the 1950s and 1960s to just about zero today. The main driver of the drop in national savings rates has been “dis-savings” by the federal government — ballooning budget deficits as a “new normal,” in good years as well as bad.
The inescapable consequence of our budgetary indiscipline has been the emergence of interest payments on federal debt as an inexorably rising federal expense. Net federal interest payments now account for a higher share of gross domestic product than at any time in America’s history — more today than it spends on national defense, in fact.
But what we see now is only a foretaste of the future. For shrinking societies with upside-down “population pyramids,” where each new generation is smaller than its elders, pay-as-you-go schemes for old-age pension and health care programs, which worked so nicely when populations were growing, become fiscal doom loops.
Population decline promises to intensify the distortions, magnifying deficits and debt buildup, raising the odds of an eventual fiscal crisis and hastening its potential arrival.
Fifth, a faltering business climate. An aging, shrinking society will need a vibrant business climate — what some might term economic freedom and others high-quality institutions and policies — to vitalize returns on scarce human resources, encourage innovation, and juice the dynamic churn of capital and labor.
But the U.S. business climate looks to be heading in the wrong direction.
Business climate is important, but it is not easily and unambiguously defined and measured. Nonetheless, it is striking how consistently different metrics judge America’s business climate to have declined markedly in the 21st century.
To be clear: The U.S. economic system remains the wonder of the modern world when it comes to wealth generation. But America’s falling grades on business climate cannot be summarily dismissed. There are real and growing reasons today for concern about the economic atmosphere in the United States.
That brings us to immigration. In theory at least, immigration looks like an obvious part of the answer to maintaining and enhancing prosperity for a depopulating America. The U.S. has an unusually good knack for turning newcomers into loyal and productive citizens. There is a huge “win-win” zone for native- and foreign-born Americans, and a “competitive immigration” policy could capitalize on that even more for an aging and shrinking America.
At least in theory.
But despite these immense potential benefits, migration as it currently affects America is fraught with problems.
One of these is welfare dependency. Although the foreign born are more likely to be economically active (and to that extent, taxpayers) than native-born Americans, they are also decidedly more likely to seek and obtain means-tested government benefits. The issue of welfare recipience means that America’s immigrant population is not an unqualified economic boon.
The greater problem for the U.S. is illegal immigration. Somehow illegal immigration and conversely the enforcement of U.S. border security have become not only politicized but utterly poisonous issues in contemporary U.S. politics, with our two political parties far apart and unwilling to compromise.
America may be a nation of immigrants, but it has taken some serious timeouts from mass immigration in the past, most importantly between World War I and the mid-1960s. If it took another pause today, the U.S. working-age population could start shrinking right now, leaving no room for maneuver in coping with the ramifications of labor decline.
Passing legislation to formalize a framework that makes immigration work for the U.S. is the purview — indeed the obligation — of Congress. But here, as with budget discipline, the legislative branch has shirked its constitutional responsibility, opting instead for timid and highly performative politics.
Eventually we may just get the results we deserve from the politics we approve. Population decline can only hasten such a reckoning.
Putting America’s fiscal house in order? Improving its national business climate? Repairing our country’s health profile? Pulling more able-bodied workers back into the labor force? Getting immigration to work for us? These are all imperatives that ought to win support on their own merits. But each of them becomes more urgent if an American depopulation is on the horizon.
Remember: America possesses formidable — arguably unrivaled — national advantages as it faces the prospect of long-term population decline. The wealth-creation edge that the U.S. has over other countries may actually be widening. U.S. entrepreneurship, innovation and knowledge production are still second to none. American corporations and financial markets excel at profit-making problem-solving in a way that sets the global standard. And the U.S. still exerts a unique, almost gravitational, attraction for the world’s most talented and ambitious risk-takers seeking a better life in a new country.
None of this is an accident. The American system — Constitution and creed, together — facilitated this dynamic through a propitious business climate that was especially rewarding for adaptation, ingenuity and unlocking value in ideas and effort.
The U.S. will be in a much better place if it has prepared beforehand for the pressures of population decline. Coping with all these exigencies under emergency conditions ought to be far more appealing than reacting from the maw of a crisis.
America can thrive as an aging and shrinking society, and it can likewise maintain its global edge under new and different demographic circumstances — but that is a future we will have to win. All this will take foresight, cooperation and some sacrifice — but it will be well worth the effort.
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