Is a Low Fertility Rate Good or Bad for the Health of an Economy?

Some countries, like Israel, have a high fertility rate (2.67 children born per woman) and a young, rapidly growing population. In conrast, the fertility rate in Germany is 1.39 and falling. Traditionally, there is a sense that a shrinking population will stall economic growth. Smaller labor market. Fewer consumers.

Some countries, like Israel, have a high fertility rate (2.67 children born per woman) and a young, rapidly growing population. In conrast, the fertility rate in Germany is 1.39 and falling. Traditionally, there is a sense that a shrinking population will stall economic growth. Smaller labor market. Fewer consumers. More old people for the smaller working population to support.

Staying competitive in a global economy is a critical issue for any country, but supporting healthcare for an aging population with a shrinking GDP is a double-challenge.

Is Japan, with its low fertility rate, bucking this conventional wisdom?