(FORTUNE Magazine) – When asked how long it will take for the world's population to double, nearly half of all Americans say 20 years or less. That's hardly surprising, given the crowding many of us encounter in everyday life and the reports we hear of teeming Third World megacities. Yet forecasts by the United Nations and others show that world population, currently at a little over six billion, is unlikely to double--ever. Indeed, demographers at the International Institute for Applied Systems Analysis, a nongovernmental research organization in Laxenburg, Austria, predict that world population will peak at nine billion within the life-time of today's Gen Xers and then start shrinking. Meanwhile, the average age of the world's citizens will advance dramatically. This aging will happen fastest not in the developed world, where we are used to fretting about the graying of society, but, astonishingly, in the Middle East and other underdeveloped regions. By the end of this century, even sub-Saharan Africa will probably grow older than Europe is today.

These predictions come with considerable certainty. The primary reason, confirmed in late March by a U.S. Census Bureau report, is a fall in fertility rates over the last generation that is spreading to every corner of the globe. In nations rich and poor, under all forms of government, a broad social trend is absolutely clear: As more and more of the population moves to urban areas in which children offer little or no economic reward to their parents, and as women gain in economic opportunity and reproductive control, people are producing fewer and fewer children.

Global fertility is half what it was in 1972. The decline began in industrialized nations, none of which still produces enough children to sustain its population over time, or to prevent rapid population aging. While many factors are at work, the economics of family life in developed countries make the trend nearly inevitable. In the U.S., the direct cost of raising a middle-class child born this year through age 18, according to the Department of Agriculture, exceeds $200,000, not counting college; the cost to the parents in forgone wages can easily exceed $1 million. And while Social Security and private pension plans depend critically on parents' replenishing the nation's human capital, they offer the same benefits, and often more, to those who avoid the burdens of raising a family.

Yet now the developing world is graying, too, and at a far faster pace. Mexico is aging five times faster than the U.S., due primarily to a dramatic fall in fertility. Post-revolutionary Iran has seen its fertility rate plummet by nearly two-thirds, and will accordingly have more seniors than children by 2030. India's fertility rate has dropped by roughly one-fifth in the past 20 years; the people of its major southern provinces already produce too few children to replace themselves, as will be true for all Indians by 2020.

To those raised on "population bomb" fears--apocalyptic scenarios of famine, pestilence, war, and environmental collapse brought on by overcrowding--all this is certainly reason to cheer. A slowdown in fertility rates also brings economic benefits, which partly explains the current economic success of India and China. As the relative number of children declines, so does the burden of their dependency, thereby freeing resources for investment and adult consumption.

Yet while declining fertility rates can initially bring a "demographic dividend," the eventual loss of human capital means that dividend has to be repaid. At first there are fewer children to look after, which leaves more resources for adults to enjoy. But soon enough, if fertility remains below replacement levels, there are fewer productive workers and more and more dependent elders. Old people consume far more resources than children do; even after considering the cost of education, a typical child in the U.S. consumes 28% less than the typical working-age adult, while elders consume 27% more, mostly in health-related expenses.

Countries like France and Japan at least got a chance to grow rich before they grew old. Most developing countries are growing old before they get rich. China's low fertility means that its labor force will be shrinking by 2020; with current trends, 30% of its population will be over 60 by mid-century. The nation's social security system, which covers only a fraction of the population, already has debts exceeding 145% of GDP. Throughout much of the developing world, public pension systems have collapsed or been seriously cut back.

The implications for world economic growth are stark. Japan developed its export-driven economy at a time when the number of consumers in Western Europe and the U.S. was still growing robustly. By contrast, when today's developing nations look for long-term export markets, they find most rich countries on the brink of absolute population decline and deeply encumbered by the cost of their health and pension programs. We may all be facing a diminished old age.

Even more sobering are the implications for modern civilization's values. As urbanization and globalization continue to create a human environment in which children become costly impediments to material success, people who are well adapted to this environment will tend not to reproduce. Many others who are not so successful will imitate them. So where will the children of the future come from? Increasingly they will come from people who are at odds with the modern world--who either "don't get" the new rules of the game that make reproduction an economic liability, or who believe they are (or who in fact are) commanded by a higher power to procreate.

Such a higher power might be God, speaking through Abraham, Jesus, Mohammed, or some latter-day saint, or it might be a totalitarian state. Either way, such a trend, if sustained, could drive human culture off its current market-driven, individualistic, modernist course, gradually creating an antimarket culture dominated by fundamentalism--a new dark ages. History records a similar shift in third-century Rome, when pagan fertility collapsed, while that of early Christians did not. If modern secular societies are to survive, they must somehow enable parents to enjoy more of the economic value they produce for everyone when they sacrifice to create and educate the next generation.

PHILLIP LONGMAN is a senior fellow at the New America Foundation and the author of The Empty Cradle (Perseus, March 2004), from which this article is adapted.