Healthonomics I: Fertility Decline and its Causes and Consequences

By: Rutvij Thakkar

Arguably no resource is seen as more valuable in economics than the human being. Economics is, after all, a conception of the human mind, it is really a frame of reference or heuristic in and of itself, and even within itself, it contains many different frames of reference. There are many schools to economics, it’s not a simple and clean-cut discipline that has no conflicts such as physics. Typically, economics is referred to as a social science and all of the modern outgrowths of it have been adjacent to the fields of sociology, psychology, and political science. We use economics as a way to optimally interact with our resources and the people surrounding those resources, and our creation of the concept is what has allowed civilization to grow because it lets us analyze almost anything from a broader scope. But regardless of what school of economics you look at, every measurement carrying import will consider the “per capita”, or “by head” in Latin. The answer actually lies in the translation as to why heads matter so much: more heads or more people are more productive capacity. There’s also another idea hidden within: more old heads are suboptimal or regressive to productive capacity. As a population ages, their potential depreciates as well. Typically people will take more days off, spend more time with their kids, and work on their hobbies. Age also debilitates the ability to learn as neuroplasticity typically drops sharply around 25–30 and consistently tapers off after, meaning new and younger workers will have to keep coming in to sustain growth. We have seen just how brutal the process of breaking in and working in the industry has gotten recently as wages for new workers have skyrocketed, with some firms doubling bonuses for young associates. It just comes as common sense that it’s good to have lots of young and enthusiastic employees because they are more likely to drive corporate level growth. In some sense, macroeconomics also agrees, and for most economies to be considered successful you need to have a good birth rate that matches or exceeds the replacement rate, or the amount of births needed to sustain the population level. According to the UN Population Division, a total fertility rate (TFR) of about 2.1 children per woman is called replacement-level fertility. Many aging countries and developed nations are below the replacement rate with Japan being a prime example, having a birthrate of just 1.34 and an aging population having among the longest lifespans in the world.

A prime example of this economic phenomenon can also be found in the EU. The European Union has been experiencing a population decline like no other, and according to Reuters & Eurostat: “The European Union’s birth rate has been decreasing since 2000, Eurostat figures show, with 1.53 live births per woman in 2019, well below the 2.1 mark considered sufficient to prevent a decline in population numbers.” Because of their declining birth rate, the EU has heavily considered opening their borders to immigration to ensure that their country’s elderly population can be supported by an inflow of young workers that are essentially economic assets who offset the economic liability the elderly cause on the EU’s extensive entitlements system. The United States hasn’t had the same issue due to a much more friendly policy towards immigration. However, there is still the common issue in all western populations of decreasing sperm counts and fertility. Fertility isn’t typically a subject analyzed from an economics perspective, but instead of just examining why the trend observed is happening, this article will venture to understand the potential economic and monetary consequences along with what could possibly be accomplished to reverse this trend which could potentially cripple economic output along with having other implications with the context of the social fabric.

Sperm counts in western men have declined 59% between 1973 and 2011. This isn’t a misreading in data, it’s been observed by reputable institutions, and it’s been a trend for a very long time. For nearly the past 50 years, we’ve observed a consistent decline in male fertility, and at this rate, the population would become entirely infertile by 2045.

According to GQ:

The Hebrew University/Mount Sinai paper was a meta-analysis by a team of epidemiologists, clinicians, and researchers that culled data from 185 studies, which examined semen from almost 43,000 men. It showed that the human race is apparently on a trend line toward becoming unable to reproduce itself. Sperm counts went from 99 million sperm per milliliter of semen in 1973 to 47 million per milliliter in 2011, and the decline has been accelerating. Would 40 more years — or fewer — bring us all the way to zero?

Those of us living in developed nations have come to face the fact that we’re fine with a declining population. After all, the whole purpose of many progenies (at least for the human race) was to have cheap labor on our farms, a pure microeconomics concept that probably will now have little ramifications on the rest of the world. Now that we’re globalized, we can just outsource our labor to lesser developed countries, and then we can have our “asset-light” economy; one consisting of little manufacturing, primarily white-collar services (such as consulting and banking), a highly educated population, and most importantly, one with women’s rights so that we can free up the economic potential which laid dormant until fairly recently. The demographic transition model displays exactly this happening, so we had little reason to be concerned; some population decline was bound to happen because women were entering the workforce. We’re in a position to be comfortable rather than in “survival mode,” and we can simply readjust for however many offspring society demands.

Seemingly, the sperm cell isn’t some rarified commodity, there’s already a booming fertility industry, and a very high sperm count isn’t even necessary to achieve pregnancy. Why is there any reason to show concern for this metric? Dr. Shanna Swan, the researcher who led the 2011 metanalysis, has spent 20 years understanding this trend, and she also found evidence suggesting testosterone levels decrease at the same rate sperm have and miscarriage rates in women have risen at the same rate sperm have declined. She calls it the “1% effect”, which over time has rapidly compounded to the drastically different reproductive levels we find today. There’s also sufficient evidence suggesting it doesn’t have anything to do with our individual decisions, such as having fewer children later, as Dr. Swan explains in this interview:

Female fertility declines rapidly after about 35. Isn’t that why so many people are turning to IVF?

It’s not that simple. When a colleague and I looked at the change in impaired fecundity [the ability to have children], we were surprised to see younger women had experienced a bigger increase than older age groups. This suggests that something besides [aging] and delayed childbearing is affecting fertility.

Moreover, there’s compelling evidence that the risk of miscarriage has been rising among women of all ages.

According to Hagai Levine, an author in the meta-analysis, extinction is a very likely possibility if fertility continues to decline at the rate that we’ve seen:

“We should hope for the best and prepare for the worst,” said Hagai Levine, a lead author of the study. “And that is the possibility that we will become extinct.”

Dr. Swan believes that by 2045, at the very least, we’ll commonly see fertility being supported by external solutions. With the rapid advancement of technology nowadays, 2045 seems very far away, and it’s outside our foresight to imagine how reproduction will look like then.

However, VCs are already jumping into the fertility market, with Crunchbase reporting:

Indeed, venture capital funding for fertility startups increased steadily between 2017 and 2020. But Crunchbase data shows the industry attracted unprecedented interest this year, with investments increasing by 89 percent so far — from $93 million in 2020 to $176 million in funding as of Oct. 15, 2021.

Crunchbase also points out that Facebook and Apple are now offering fertility services to employees, which surprisingly started back in 2014, three years before the widespread meta-analysis on declining fertility was published: Such benefits are still a relatively new concept. Fertility as a company perk first became a talking point around 2014, when Facebook and Apple started offering egg-freezing to their female tech workers, a cohort already small in number that tended to shrink as those women reached childbearing age.

Forbes reported in 2019 that the fertility industry consisting of various assisted reproductive technologies will swell in size to $36 billion by 2023. These points are worth noting because the producers, and especially the tech industry, are supposed to be ahead of the curve in predicting the direction of consumer sentiment and what the economy demands. Venture capital’s sole purpose is to anticipate the most significant problems humanity will face and try to solve them before they even fully take form; this is how it’s profitable in the first place. Two of the world’s largest tech companies already foresaw the consequences of their workers not having children and implemented programs to encourage parental leave. They were willing to let their typically overworked workers miss valuable days for them to raise kids. If tech companies recognize the value offspring should have to workers, then there’s probably a bigger picture with greater forces at play here which are likely beyond our short-term recognition. In countries further along the development curve, the government actively supports fertility, with 10% of all births in Denmark taking place through in-vitro fertilization. Endocrinologist Niels E. Skakkebæk stated to GQ: “Here in Denmark, there is an epidemic of infertility,” he said. “More than 20 percent of Danish men do not father children.”

The fertility issue is further accelerated because birth rates fell to historic lows over the pandemic for various reasons, mainly due to economic instability and the inability to seek partners due to lockdowns.

Those believing in long-run economic cycles such as the Kondratiev wave forecast 2020 marking the start of a new economy:

Health economist and biostatistician Andreas J. W. Goldschmidt searched for patterns and proposed that there is a phase shift and overlap of the so-called Kondratiev cycles of IT and health (shown in the figure). He argued that historical growth phases in combination with key technologies does not necessarily imply the existence of regular cycles in general. Goldschmidt is of the opinion that different fundamental innovations and their economic stimuli do not exclude each other as they mostly vary in length and their benefit is not applicable to all participants in a market.[citation]

In many ways, 2020 marked a paradigm shift in how our economy will function for a long time, with so much value in market capitalization created for tech companies solely because we were forced into a corner by COVID that required excessive technology use. This wave illustrates that after our information technology revolution, we’ll be far more open to introspection for value creation because we’ve maximized the possible output with computing technology. The logic goes that if computing was created to maximize human productivity, there has to be a way to increase human potential itself eventually, and a humanistic approach will mark the start of a new approach to our economy. Companies are anticipating that vision already. Instead of increasing the workload on humans with more lines of code and new productivity software, we need to go back to the brains behind the operation. Perhaps that’s where the best-case scenario of artificial intelligence also lies, with Elon Musk’s Neuralink and Mark Zuckerberg’s upcoming Meta-verse being the primary examples. The aforementioned Kondratiev wave shows an overlap between information technology and psychological health, which would fit our current lifestyle of reclusiveness and hyper-productivity that has damaged our mental and physical health.

So how does our society’s demand for health solutions tie back in with fertility? Hormonal imbalances observed in these analyses have far-reaching lifestyle consequences making us more prone to stress, addiction, and depression. As far as the health of any species goes, male sperm and testosterone levels are the canaries in the coal mine. According to GQ: “We know, for instance, that men with poor semen quality have a higher mortality rate and are more likely to have diabetes, cancer, and cardiovascular disease than fertile men.”

There are many ways to improve fertility, with endless health benefits as a side effect because fertility is a good indicator of general health. For example, look at this article suggesting that if men helped more during household chores in Japan, there’s a very high chance fertility would improve: https://asia.nikkei.com/Spotlight/Datawatch/To-raise-Japan-s-tepid-birthrate-get-men-off-the-couch

But what is this article indicating? It indicates the very nuanced issue that young Japanese workers are stressed out from the country’s demographics forcing them to work long hours. They’re unable even to do the bare minimum amount of physical activity required for household chores. This also substantiates why Japan’s suicide rate is so high and why sleeping in the office is also seen as culturally sound. This is one of the many consequences of “overdevelopment” and limiting immigration. Another factor contributing to declining fertility, according to Dr. Swan, is the increased amount of microplastics and endocrine disruptors that have gained mass use in all of our products:

When a chemical affects your hormones, it’s called an endocrine disruptor. And it turns out that many of the compounds used to make plastic soft and flexible (like phthalates) or to make them harder and stronger (like Bisphenol A, or BPA) are consummate endocrine disruptors. Phthalates and BPA, for example, mimic estrogen in the bloodstream. If you’re a man with a lot of phthalates in his system, you’ll produce less testosterone and fewer sperm. If exposed to phthalates in utero, a male fetus’s reproductive system itself will be altered: He will develop to be less male.

The abundance of these endocrine disruptors has only increased as a result of western industrialization (GQ)

The correlation with the decline in male fertility has been tied to our changing living standards in the 21st century, and as you can see, while sperm counts have declined linearly, the use of microplastics has recently increased exponentially, which doesn’t spell a good future for our future in any capacity. Thankfully, we are becoming more cognizant of climate change, and hopefully, the use of microplastics has another bigger reason to be limited: our self-preservation. When governments and industrial giants speak in favor of manufacturing and the use of microplastics, they prioritize their short-term profits over the long-term survival of humanity. When tech companies that are morally questionable in their own right are able to acknowledge the importance of fertility, we should too, at every level. The use of microplastics in manufacturing and pollutants in the air has already shown scientific causation to reduced fertility, and the correlation over time is evident in western countries. So, it’s only a in a matter of time that immigration will stop becoming a viable solution to gain young workers as the effects of pollutants will inevitably hit developing nations.

This isn’t to say the industrial revolution wasn’t necessary, and the “petrochemicals and automobiles” long-run wave was ironically the most influential cycle in our population boom. Still, it’s evident some of the long-term effects have been highly counterproductive to sustainable growth. We’re currently in the midst of one of the biggest socio-economic revolutions in the form of information technology, but what purpose will all of this innovation serve if the next generation isn’t even alive to see it? I believe it’s important to acknowledge the pros of western capitalism and stay true to the humanistic fundamentals that have allowed society to exist and not lose sight of things that should carry greater import than financial success. There are solutions at the personal level for people to reverse this long-term trend, starting with a healthier lifestyle.

So as with any other publication, here’s my two cents of personal “investment advice”:

1. Engage in physical activity — no substitute to this, every piece of evidence suggests that there’s causation between increased physical activity and increased fertility (both aerobic and anaerobic exercise)
2. Get proper nutrition — this is necessary to build a sustainable, physically active lifestyle. Both macro and micronutrients need to be monitored, and each individual should find what works for them.
3. Prioritize mental health — stress is one of the most significant barriers to developing healthy relationships. Getting sufficient sleep goes hand-in-hand with this one.
4. Reduce the usage of microplastics — see above

To reiterate my “mission” with this rather unorthodox article, I want to improve financial literacy and a holistic understanding of the individual and their role in society. I explore this by usually incorporating subtle themes into pieces of business news. Still, this time I’m directly addressing a social issue I found to be going under the radar, and maybe it was even undervalued, so I hope I brought attention to something that should matter more.