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For the first time in human history, we're not having enough children to keep the world's population from falling. And fertility is collapsing fastest not in rich nations but in places like Colombia, Thailand, and Guatemala, upending decades of economic wisdom. Economist Jesús Fernández-Villaverde tells Russ Roberts, EconTalk host and Hoover visiting fellow, that falling fertility has accelerated sharply over the past decade and defies easy explanation. Declining religiosity, smartphones and social media, soaring housing costs, and changing gender norms are popular, but unconfirmed, theories.
Fernández-Villaverde offers his own speculative answer: that modern life makes a third child costly and childlessness easy, but admits the puzzle is unsolved. What's clearer is why it matters: as retirees become the dominant voting bloc, spending on pensions and health care crowds out roads, schools, and defense. Shrinking economies make public debt harder to service, and fewer births mean fewer scientists, artists, and inventors.
Resources
Jesús Fernández-Villaverde at the University of Pennsylvania
“Terra Incognita: The Economics of a Shrinking World” by Jesús Fernández-Villaverde and Patrick Norrick (National Bureau of Economic Research, September 2026)
Economic Growth, Depopulation, and Macroeconomics with UPenn Econ Professor Jesús Fernández-Villaverde (American Enterprise Institute and Hoover Institution)
Jesús Fernández-Villaverde’s post on X about “Terra Incognita”
“A Reformulation of the Economic Theory of Fertility” by Gary S. Becker and Robert J. Barro (The Quarterly Journal of Economics, Oxford University Press, 1988)
The Ultimate Resource by Julian Lincoln Simon (Princeton University Press, 1981)
Russ Roberts is a visiting fellow at the Hoover Institution. In 2006, he founded the award-winning weekly podcast EconTalk, which has featured guests including Milton Friedman, Martha Nussbaum, Christopher Hitchens, Agnes Callard, Bill James, Nassim Nicholas Taleb, Amor Towles, and Emily Oster. All 875+ episodes remain available free of charge at EconTalk.org and reach an audience of more than 125,000 listeners in 200 countries.
Jesús Fernández-Villaverde is the Howard Marks Presidential Professor of Economics at the University of Pennsylvania and the John H. Makin Visiting Scholar at the American Enterprise Institute. His research focuses on macroeconomics, econometrics, and economic history. At Penn, he directs the Penn Initiative for the Study of Markets and codirects the Business, Economic, and Financial History Project.