The issue is how we will balance the world's labour supply

In a recent address to the World Congress of Families, held in Melbourne, Allan Carlson, an adviser to the Reagan and Bush administrations, castigated the United Nations Fund for Population Activities, the European Community and the United States government for continuing to press for population control. He asked: "Long after depopulation should have become the central demographic worry, why do leaders of the international community continue to war against remaining pockets of robust family life?" For Carlson these pockets are nations that still have high rates of fertility. Pakistan is one, where women have an average of 5.4 children and the population in 1995 was 130 million. If Pakistan's women have children at this rate for the next 100 years, its population will rise to 2.2 billion by 2095. These numbers are unsustainable.

The depopulation that concerns Carlson is that projected in industrialised countries. Populations are falling in most Eastern European countries and are set to fall in the near future in most Western European countries. If the current level of fertility in Italy is sustained for the next 50 years, its population will fall in this period from 57 million to 37 million. Japan's population will fall from 126 million to 50 million in 100 years if its current fertility rate continues. Fertility rates in industrialised countries are now at unprecedentedly low levels. If we imagine that the low levels of fertility now applying in Italy and Japan continue for 200 years, the populations of those countries, assuming no immigration, will fall to near zero. Just as sustained high population growth leads to exploding populations, sustained population decline wipes out populations in a remarkably short time.

Sustained low fertility means population numbers fall but in the next 40 years the reduction will be in the younger ages while the number of elderly people will continue to grow. The number of children will fall dramatically and social institutions will adjust to their scarcity, tending to keep fertility low.

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Low fertility also means many industrialised countries face substantial falls in the absolute sizes of their labour forces in the next 40 years. In Japan, the number aged 20-64 will fall from 80 million in 1996 to 60 million in 2036, irrespective of any reasonable change in fertility during this period. Many European countries also face major falls.

Demographers have deemed low fertility a temporary phenomenon: the outcome of births being delayed, rather than not occurring at all. Fertility rates rose in several countries in the late 1980s and stopped falling in most others. But in the 1990s, signs of rising fertility have almost disappeared. Analysis of birth rates in Australia, by single years of age of mother, shows that fertility is falling sharply at all ages under 30 and starting to fall at ages in the early 30s. There is little chance that women aged 35 and over will reverse the falls at younger ages, and low fertility as a short-term phenomenon is no longer credible.

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In the next 40 years, labour forces will increase dramatically in developing countries where fertility rates are still high or have been high in the recent past. In India, the labour force (20-64 years) will grow from 470 million to 850 million.

Capital will continue to flow from the advanced economies to economies with an excess labour supply. In the advanced economies, imports or rises in productivity can offset falls in the numbers of available workers in some sectors. This process is already advanced in agriculture, mining and manufacturing. In the past 20 years, the transfer of labour from these sectors, the concentration of the postwar babyboom in the working ages and the movement of women into paid employment have enabled the service sectors of these economies to grow rapidly. But the next 40 years will be marked by substantial labour shortages. Maintenance of the service sector in advanced economies is likely to stimulate a demand for immigrant labour on a scale seen only in traditional immigrant-receiving countries. But under what conditions will this immigration occur?

Traditional immigrant-receiving countries such as the US, Australia and Canada will need only the numbers of immigrants that they have conventionally received, partly because their recent fertility levels have not been as low as those of most European countries and Japan. Because of their histories of family settlement and multiculturalism, immigration to the traditional receivers is also likely to be socially sustainable. Countries with large, culturally homogeneous populations face a greater challenge. The immigration required to offset falls in the size of their labour force is on a scale far beyond the experience of these societies, leading to pressures to take immigrants as "guest workers" who do not have their families with them, and to great potential for social unrest. Because guest workers have a zero birth rate in their host country, more are needed in the long term. If Japan ran a "guest worker" scheme and its fertility rate remained, it would need to recruit one million guest workers a year (cumulatively) for the next 100 years to keep the labour force constant.

Debates about population futures in the next century need to move on from issues of ageing to labour supply and international migration. For many countries, reversal of trends towards early retirement or early permanent retrenchment from the labour force is a sensible short-term option, while we need also to be talking about arresting and reversing the fall in fertility in the long term. In other countries, the opposite remains the case.

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Peter McDonald is professor of demography at the Australian National University and chair of the working group on low fertility of the International Union for the Scientific Study of Population.