Is Declining Productivity Inevitable?

Fertility has been declining on all continents for the last couple of decades and this development is expected to continue in the future. Prevailing innovation-based growth theories imply, as a consequence of scale effects from the size of population, that such demographic changes will lead to a major slowdown in productivity growth. In this paper we challenge this pessimistic view of the future. By allowing for endogenous human capital in a basic R&D driven growth model we develop a theory of scale-invariant endogenous growth according to which population growth is neither necessary nor conductive for economic growth.