What population bomb? Birthrates around the world are in free fall, and a growing list of countries face absolute population decline in the very near term. In his book The Empty Cradle: How Falling Birthrates Threaten World Prosperity (And What To Do About It) (Basic Books, 2004), Phillip Longman argues that it's time Americans focused on the implications of these long-term population trends.

Carroll: You argue that falling birthrates are one of the most significant stories of this era.

Longman: That's correct. It's a trend that's been under way in the West in very slow motion for maybe 300 years but it's one that's now visiting the developing world with lightning speed. So that for example Mexico is aging at five times the rate of the United States and is on course to wind up being an older country than the United States in this century. This is an example of countries growing old before they get rich and it presents all kinds of new challenges that frankly we've never seen before.

Over the next 50 years the median age in the United States will go from about 35 to 40 and the median age in Mexico will go from about 20 to 40.

Carroll: Isn't that a product of people both living longer and having fewer children?

Longman: It's overwhelmingly because of fewer children.

Carroll: This is occurring even in the Middle East. I thought there was a huge cohort of young people in those countries with nothing much to do who tend to be the ones gravitating toward the jihadist ideology.

Longman: A helpful analogy might be the demographic course of the United States in the 1970s and '80s. We too had a baby boom generation, but it didn't reproduce itself fully and the result is that we now have an aging population. The same thing is happening in the Middle East only on a much more dramatic scale and in a more compressed time. The original baby boom in the Middle East was created by falling infant mortality, not by an increase in fertility. So we have many more people around who in a different generation would have died in infancy, but they are having dramatically fewer children than their parents did and in some places such as Iran they're not even having enough children to sustain the population over time.

This doesn't mean the population is about to fall anytime soon in the Middle East but it does mean that these populations are going to change their character dramatically. They're going to be much more middle-aged and, frankly, the middle-aging of the Middle East is probably something we can all look forward to. We may well see less terrorism.

Carroll: There are a number of countries in the world facing a contracting population in the very near term.

Longman: Italy is on the threshold of losing population in absolute terms; Russia is losing about 750,000 people a year. South Africa is losing population primarily because of AIDS and falling birthrates. Japan will probably lose population this year in absolute terms and then a compounding curve of population law takes over so that Japan by the end of the century may easily be one-third smaller than it is today.

But just to keep this in context: Even in the Middle East, for example, Iran winds up in just 25 years having more seniors than children. That's a dramatic change. They're going to have to figure out how to finance those seniors. They don't have the resources that Italy has.

A kind of paradoxical way to look at this is that the number of children in the world starts to decline in absolute terms in about 15 years, according to a United Nations projection. And by midcentury there are 35 million fewer children in the world than there are today, but simultaneously there's 1.2 billion more seniors. So you can see that in a real sense that, yes, we have population growth still in the pipeline but it's population growth of elders occurring in the context when there's literally fewer and fewer children.

Carroll: Let's finish our tour of the world and deal with the two largest nations in terms of population, India and China, and then with a continent everyone assumes is booming in population growth, Africa.

Longman: The situation in China is really topsy-turvy. Most people know China is growing very rapidly, and they also know that since the '70s they've had this one-family, one-child policy. What that means for the future is that China is about to embark on a course of hyperaging that's never been seen before. As early as 10 to 15 years from now China's labor force will be shrinking in absolute size while its percentage of elders is increasing dramatically. Thus China is in a race to develop its economic system and pension system in time to accommodate this tidal wave of elders.

Complicating the situation is that there are about 117 men in the rising Chinese generation for every 100 women. It's because of the infanticide of females, or female fetuses. And it means that there's not only an age imbalance but also a sex ratio imbalance and no one knows what's going to happen to all these men who have no brides or any potential prospect of having a family. It's potentially very destabilizing to China's future.

India's in better shape. Its southern provinces are already at below-replacement-level fertility -- these happen to be the places that are most economically advanced. But it's aging at a more gradual pace and in the short run India's aging will probably be a very good thing. India will have more resources to devote to the raising and educating of children.

Sub-Saharan Africa is a mixed picture. Both South Africa and southern Africa, the region, have seen dramatic declines in fertility and horrendous increases in mortality due to AIDS. The two aren't unrelated because when women get HIV it dramatically reduces their biological capacity to conceive. In central Africa you still have in some countries very dramatic population growth in places where the average woman still has six kids but you have to bear in mind that mortality is also high by our standards.

Carroll: There's never been a time in which the population has fallen from natural causes in the way it's going to in much of the world. We've had epidemics in history kill off a quarter or more of a continent's population, but what are the implications of sustained population loss over decades?

Longman: Historically it's hard to find any economy that's thrived under any form of government in the context of population decline.

Carroll: You point out that immigration, which for the past 30 years is the biggest reason the United States has bucked the population trends of other advanced countries, may not be sustainable in the long run in part because of falling birthrates in the countries of origin.

Longman: We've already seen that Puerto Rico produces no net immigration to the United States. That's because Puerto Rico has a birthrate that produces no more people than its own economy can handle, and so people stay put. And one can easily imagine that happening in Mexico.

Carroll: Why is it that people don't have as many children? You point out that most people tell pollsters they still do want children -- in fact lots of people say they want three children. And many people who reach middle age say they didn't intend to have as few children as they ended up having. We're all familiar with some of the reasons, such as female economic independence, the spread of education, hypermaterialism, but are those the biggest reasons or are there others?

Longman: The most important cause is the rising cost of children. With each new generation our standards rise for what counts as responsible parenthood, including what level of education you are expected to endow your children with. Simultaneously because of the greater opportunities available to women and to some extent to everybody you have to give up more and more of your potential earnings and potential forms of entertainment in order to have kids. So there's this huge opportunity cost. You can easily come up with the estimates of forgone income for a couple of as much as a million dollars before their first child reaches 18.

Finally, while parents are making ever greater sacrifices on behalf of their children and producing ever more social capital for that society, they don't get any compensation for it. Social Security pays out the same benefit to you whether you produce the children that feed the Social Security system or whether you don't. So we have a free-rider problem. If you're just concerned with maximizing your income the smart strategy is don't have kids. Other people want to have kids but keep putting it off. And yet for many people including myself incidentally . . .

Carroll: I needed to ask you that: Do you have children?

Longman: I have an adopted son. I'm thrilled about that, but my late wife and I got into that trap of always thinking through our 20s that next year would be the year we'd have the house and the white picket fence and could afford the school district and all. And by the time we got all of that together it was too late, and I think that's a very typical story in the baby boom generation and one that's driven by some combination of economic forces, cultural lags, and misunderstanding of how rapidly fertility actually does decline in the biological sense. So there's some cultural learning that has to happen on this subject. But we also just need to look for ways to allow parents to recapture more of the wealth that they create through their investment in children. Otherwise parenthood becomes a sucker's game and everybody is kind of waiting around for somebody else to have children.

Carroll: Haven't there been previous attempts, such as in Sweden, to compensate parents monetarily for having kids?

Longman: One does have to be somewhat humbled by the record of pronatalist policies. Sweden in the early '90s created a bundle of family allowances, invested quite massively in day care with the explicit idea of making it easier for young couples to have children. They did manage to boost the fertility rate and even to this day it remains the highest in Europe, but it is on the decline. I think the reason programs like that haven't been more successful is that they're just nowhere near generous enough to create the conditions that would really make parenthood feasible and worthwhile for more people. It's not just a question of money either; it's a question of how a culture organizes things like career patterns and education itself.

As for Social Security, I would suggest this deal: Have one child, pay one-third less Social Security tax; two children, two-thirds less; three and don't pay any Social Security tax. And meanwhile be credited as if you'd paid the maximum tax all along. At the end of the day we have to find one way or another to not punish people for reproduction.