Fertility Rate
September 21, 2025
When I was growing up, there was widespread fear that human population growth was going to cause apocolyptic mass famine. This fear was largely attributed to the book, The Population Bomb, by Stanford researchers Paul and Anne Ehrlichs. But improved agricultural technology prevented the types of global famines the Ehrlichs warned of. It is therefore rather ironic that 2 generations later, the fear of overpopulation has been supplanted by the fear of underpopulation.
Global fertility rates are falling faster than ever before. In 1950, the average family had around five children; today, that number has dropped below 2.3 and continues to decline. In many developed economies, birth rates sit well below replacement levels (see chart below).
This is not the result of one single factor, but of broad social and economic changes: more time spent in education, urbanization, declining child mortality, rising living costs, childcare concerns, later marriage and family formation, and access to modern healthcare and family planning. The outcome is a world where populations are aging rapidly, workforces are shrinking, and new consumption patterns are emerging. This also means structural changes for labor markets, consumption patterns, and long-term investment themes such as:
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Fertility solutions as delayed parenthood can lead to difficulties conceiving
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Childcare and work-life infrastructure as two-income households become more common around the world
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Automation and AI as labor markets tighten
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Silver economy platforms as innovations in healthcare allow people to live longer and better
From an investment perspective, technologies and solutions to support these secular shifts including in-vitro fertilization, EdTech, robotics and elder care are long-term winners. On the other hand, companies businesses tied to child/youth growth in low-fertility societies, labor-intensive sectors in aging economies, and governments with underfunded pension promises will likely suffer. A timely example is the pension-reform difficulty currently plaguing France.
As long-term investors, Somar pays close attention to large-scale demographic shifts like this, positioning capital to benefit from the winners while also identifying and shorting those business models most vulnerable to these structural headwinds.