Global Fertility Decline and Its Relationship with GDP: Insights from the United States and the European Union

By: Margaret Gachau, The Quinnipiac University Global Economics Research Team

In today’s report on the healthcare economy:

• Declining fertility rates across developed countries over time

• The Relationship Between GDP and Fertility in the United States

A Downward Trend in Fertility: A Comparative Look at the United States and European Union. (1960-2024)

The visualizations below of fertility rate (total births per woman) in the United States and the European Union (EU-27) reveals a clear and sustained decline over time. In both regions, fertility rates have fallen significantly below the global average of approximately 2.2 births per woman, often considered the replacement level, and have, in many cases, nearly halved over the past five decades. According to the IMF, fertility transitions are expected to accelerate further over the course of this century, contributing to slower population growth, aging societies, and a rising share of elderly populations. While lower fertility is often associated with higher female labor force participation and broader socioeconomic advancement, these demographic shifts may also pose economic challenges. Persistently, low fertility rates can lead to a shrinking workforce, which may weigh on productivity, innovation, and long-term economic growth. This, in turn, pressures public finances via higher healthcare spending.

Overall, the downward trend observed across developed economies reflects a combination of economic, institutional, and social factors. These include changing labor market dynamics, rising costs of childrearing, evolving social norms, and the well-documented quantity–quality tradeoff, whereby families choose to have fewer children while investing more resources in each.

Rising Income, Falling Birth Rates: Evidence from the United States

Source: World Bank Group and own calculations.

As observed across economies with similar structural characteristics to the United States, rising income is generally associated with declining fertility, highlighting a consistent inverse relationship between economic growth and birth rates.

According to the IMF, high fertility can dilute capital per worker, thereby reducing real GDP per capita. Conversely, declining fertility initially lowers youth dependency ratios and supports higher output per capita. However, as the demographic transition progresses, rising old-age dependency can weigh on productivity and slow per capita growth.

Additional Readings

• According to the in-depth report on the The global decline of the fertility rate 

There are three major reasons for the rapid decline in the global fertility rate:

• The empowerment of women ( increased access to education and increased labor market participation)

• Declining rates of child mortality

• Rising costs of bringing up children, with the decline of child labor

• Lost Generations? Fertility and Economic Growth in Europe