While the world wrestles with a deadly pandemic, another challenge is sneaking up on the human race: population aging.

As we transition from an exploding species to a shrinking one, economies around the world will start to feel the pressure https://trib.al/MawBWAc 

Japan is the canary in the coal mine here.

Although its birth rate is not as low as that of many other rich countries, it's been low for a long time. That’s why Japan is now the world’s oldest major economy http://trib.al/MawBWAc 

On one hand, Japan demonstrates why a shrinking population doesn’t automatically impoverish a country.

Its population is slowly declining, yet income per capita has continued to rise as productivity grows and more women enter the workforce http://trib.al/MawBWAc 

But pronounced aging has an economic cost.

Every year, a dwindling pool of working-age Japanese people is forced to support an expanding pool of gray-haired consumers. This is why Japan’s living standards are falling http://trib.al/MawBWAc 

In concrete terms, this means:

More adults forced into eldercare
More taxes to pay for pensions and health care
Lower living standards for the elderly http://trib.al/MawBWAc 

There’s also another potential cost to severe aging: macroeconomic dysfunction.

As Japan’s population has leveled off, its economy has slipped into a seemingly permanent state of deflation or near-deflation http://trib.al/MawBWAc 

Aging might also have another corrosive effect on productivity.

In countries like Japan which promotes people by seniority, a deficit of dynamic, fresh-thinking young people might make companies less nimble and less open to new ideas http://trib.al/MawBWAc 

Countries try to compensate for population aging:

Old people work longer
More parents go to work
Countries invest in automation

But unless robots get much better, there’s probably a limit to how much these measures can fight the graying tide http://trib.al/MawBWAc 

For now, the global population continues to grow.

If countries skewing older can overcome political hurdles, they can keep growing by taking in young working-age immigrants http://trib.al/MawBWAc 

Immigration is how these countries have all grown faster than Japan, and it’s why Japan itself has been ramping up immigration:

Canada
The U.S.
The U.K.
Germany
http://trib.al/MawBWAc 

But this solution will be temporary, because the transition to small families is happening all over the world.

Fertility in Muslim countries has crashed in the last two decades. Even sub-Saharan Africa is seeing its numbers fall faster and faster http://trib.al/MawBWAc 

This doesn’t mean that the globe is headed for a childless future.

But it does mean that the window is closing for a few developed countries to continue to meet the challenges of population aging http://trib.al/MawBWAc