It's one of the great underreported stories of our time: the rate at which the world's population is growing has actually slowed by more than 40% since the late 1960s. What's more, the number of people in the world could actually start to decline over the next 60 years, according to the United Nations Population Division. Under this scenario, the world's population, now 6.8 billion, may peak at 9 billion by 2070 and then start to diminish. Long before then, some nations' populations will already be shrinking, as the world's fertility rate falls below replacement levels, which is 2.1 children per family. We consider these population trends a social change with potentially profound repercussions for the global economy. These trends are important because, as has often been observed, demographics is destiny. We think that demographics especially influences destiny in this way: when a nation has more working-age adults than it has elderly adults, its economy tends to grow at above-average rates. Conversely, when a nation has a large number of seniors relative to working-age people, its economy tends to be constrained. So, contrary to popular stereotypes, the world's biggest demographic problem over the next 40 years is unlikely to be overpopulation, but the opposite: a decreasing (and aging) population, which presents complicated and subtle quandaries of its own. And as the world ages, the economic prospects are likely to be brightest for those nations aging the most slowly. Age Distribution Matters In studies such as Economic Growth and Demographic Transition, published by the National Bureau of Economic Research, it's been shown that the way the population of a nation is distributed across different age groups can have a great impact on that nation's economic performance. For instance, nations with a high proportion of children are likely to devote a high proportion of public and private money to their care, which may gladden the hearts of parents but tends to depress the pace of economic growth. In contrast, if most of a nation's population is of working age, productivity tends to rise, producing what's called a "demographic dividend" of economic growth. If favorable public policies are in place to promote business competitiveness, an ample working-age population can create virtuous circles of wealth for a nation. However, if a large proportion of a nation's population consists of seniors, the effect can be similar to that of a nation with lots of children: a large share of public and private resources are allocated to a relatively less productive segment of the population, which in turn tends to dampen economic growth. For nations, population growth per se is not as important to economic growth as the ratio of workers to seniors. In fact, in China and India a declining rate of population growth has contributed to their own much-chronicled economic success story of the past 15 years. What helped both China and India was the multitude of workers relative to the number of seniors. When the fertility rate of China and India fell, legions of people born previously were working, [...]