By Beata Javorcik
While many people still view runaway population growth as today’s most urgent global challenge, falling fertility rates are the real demographic time bomb. Nearly two-thirds of people now live in countries where fertility is below the replacement rate of 2.1 children per woman. The UN expects the world’s population to peak in the 2080s, with some scholars arguing that the turning point may arrive even sooner.
The consequences of this shift are already visible. As the European Bank for Reconstruction and Development’s (EBDR’s) latest Transition Report shows, the median age in advanced economies has risen from 29 in 1950 to 41 in 2023. The trend is even more pronounced in Central and Eastern Europe: the median age in Croatia and Bulgaria now stands at 45 and 44, respectively, while in Poland it has reached 42. In Nigeria, by contrast, the median age is just 18. What sets Central and Eastern European economies apart is that their demographic transitions are unfolding at income levels 3-4 times lower than was the case for advanced economies.
In other words, they are growing old before they grow rich, leaving them with limited capacity to sustain growth. Declining fertility reflects profound shifts in social norms and cultural attitudes toward family planning, as people marry later in life and, increasingly, do not marry at all. The EBRD report finds that more than three-quarters of baby boomers in the EU’s eastern member states were married by their early 30s.
Among millennials, that figure has fallen to roughly two-thirds. At the same time, motherhood has changed. Women are becoming mothers later in life, owing to longer education, shifting gender roles, and evolving career aspirations. Since 1990, the average age of first-time mothers has increased from 24 to 29 in Croatia, from nearly 24 to 28 in Poland, and from 26.8 to 31.5 in Spain. A growing share of women have no children, while those who do typically have fewer than in previous generations.
Later motherhood and persistent economic pressures reduce the likelihood of having larger families. As a result, many people have fewer children than they may want. Surveys show that in the world’s richest countries, respondents have, on average, one child fewer than their stated ideal. In poor countries, where fertility rates remain high, the opposite is the case. The combination of falling fertility and rising life expectancy implies rapidly ageing populations and shrinking workforces, which will increase the number of retirees relative to workers and erode living standards.
According to the EBRD’s projections, demographic headwinds will shave an average of 0.4 percentage points off annual GDP per capita growth in emerging European economies through 2050. Structural reforms could mitigate some of these demographic pressures. Raising the pension age, for example, would extend productive working lives. Increased immigration could help supplement shrinking labour forces, while technological innovation could boost productivity. But none of these measures would be easy to implement or realise. As France’s abandoned pension reform illustrates, raising the retirement age remains deeply unpopular.
Similarly, increased migration, especially at the scale required to offset demographic decline, would invariably face strong voter resistance in countries where immigration has become a major political fault line. And while AI advances may enable some workers to become more productive, many others will be displaced and require retraining. The greatest obstacle, however, may be aging itself. As societies age, so do electorates, with older voters increasingly shaping policy outcomes. Turning out in higher numbers, they tend to favour higher spending on pensions, health care, and defence while showing far less enthusiasm for immigration, education, or short-term risk-taking in pursuit of long-term growth. Political leadership is aging as well, particularly in countries with entrenched incumbents, narrowing the space for critical pension reforms, labour-market adjustments, and pro-immigration policies. Reversing this trend will require not only bold policy choices but also sustained efforts to mobilise younger voters.
Despite these constraints, demography need not be destiny. Reforms that take effect gradually, including pension adjustments, are often more politically palatable when enacted well in advance. What is needed is political courage: a willingness to explain difficult trade-offs, resist short-term pressures, and act before demographic realities close off available options. Only leaders prepared to address those realities today – and, crucially, bring younger voters into the debate – can ensure shared prosperity in the decades ahead.
The writer is Chief Economist of the European Bank for Reconstruction and Development.
