Eli5: What is a demographic collapse?

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Eli5: What is a demographic collapse?

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Demographic Collapse is when you have an increasing population of old people, but the population of young people isn’t big enough to replace all the old people in the workforce. So, as old people retire there won’t be enough young people to replace all of them at work.

In simple terms, it’s having too many old people and not enough young people. Young people work, pay taxes, and don’t cost too much because they’re healthy. Old people don’t work, pay very little or no taxes, and have more health problems that cost a lot to fix.

Until the last few decades, this was never really something we ran into because people were having more kids. As long as each couple has 2 or more kids, there will be more young people paying into the system than old people taking benefits from it. Plus, not to be too harsh, but it was also an easy problem to avoid because old people didn’t live so long after they quit working.

In the short term, the imbalance makes it hard for governments to provide social services (like Social Security and Medicare in the United States), because old people are using those services there’s not enough young people paying for them. If the trend continues into the long term, you have some *real* collapse issues, like not having enough people to physically run things. Imagine a population of a million retired people and a thousand young people trying to run around taking care of them, growing food, keeping the power plants running, maintaining buildings, etc.

Then again, if the country next to you *isn’t* experiencing the same kind of population decline – or they’re experiencing it more slowly, or they just had more people to start with – they might be inclined to take your country over and make you work for them. And who’s going to stop them? Grandma?

And, of course, if the trend *keeps* continuing, the species goes extinct. That’s not likely, because the various effects of extreme demographic collapse would eventually encourage people to start having babies again.

There are ways around these problems. You can increase economic productivity so that you make enough extra money to make up for the smaller workforce. You can encourage immigration.

In the long term, you can encourage people to have more kids. This is tricky, in part because it’s expensive – the best way to do it is to build support systems for kids and families, and those things require tax money. It also probably reduces productivity (since these support systems usually involve generous family leave).

When you look at a nation’s economy, its future economic output will either be greater or less than what the current economic output will be.

If it’s greater? Then everything is fine. Your nation can borrow against that future wealth and people are willing to invest in the future of your nation knowing it will be more prosperous in the future than it is now.

If it’s less? Then you’re in trouble. Suddenly it doesn’t make any sense to loan money to your nation or invest in its future. Without such loans and investment in the future, your nation rapidly collapses.

In a simplified sense, your nation’s economic output is the number people it has multiplied by their productivity.

In general, children have no productivity, young adults have some, mature adults have a great deal and the elderly have little. While productivity multipliers do rise over time due to technology and other factors, if your population starts to go into decline and those high productivity young/mature adults make up a smaller and smaller portion of the your population, you start flirting with the risk of a future less prosperous than the present – and that collapse I mentioned above.

Too many old people and way less young people. It can also be used to refer to when a lot of (again,young) people leave a country.