Economic and Social Impact of Aging Societies

By Father John Flynn, L.C.

ROME, SEPT. 30, 2007 (Zenit.org).- Decades of declining birthrates are causing a rapid aging of many nation’s populations.

Romanian President Traian Basescu recently warned that his country’s population was declining and that more needs to be done to support women who have children, the Associated Press reported Sept. 18.

“Romania urgently needs to revise its demographic policies,” he told participants at a conference on population and development in the city of Sibiu. The nation has 4 million people in the work force, while retirees number 6 million, according to the Associated Press.

Germany is another country feeling the pinch of a declining and older population, the New York Times reported Sept. 23. The population started declining in 2003, with a drop of 5,000 that year. By 2006 the decrease reached 130,000.

The German population is experiencing “exponential negative growth,” Reiner Klingholz, director of the Berlin Institute for Population and Development, told the New York Times.

The situation in Japan is also causing widespread concern, reported the British newspaper the Telegraph in a June 1 article. The population peaked at 128 million in 2005 and some forecasts expect it to drop below 100 million by 2050.

These demographic changes are not only a problem for rich countries, noted an Associated Press report on April 11. Some countries “‘will grow older before they grow richer,” said Somnath Chatterji, team leader of the World Health Organization’s Multi-country Studies Unit, at a U.N. conference earlier this year.

Getting older

“Something that took France over a century,” Chatterji said, “has happened in a matter of two decades in other countries.” China, for example, has one of the fastest-growing older populations in the world. The number of people more than 65 years old is growing at nearly 3% a year, compared with a rate of less than 1% for the overall population, Jiang Fan, China’s vice minister of national population and family planning, told the conference.

In a number of countries, births have increased but even so, remain at a low level. The government agency Statistics Canada released Sept. 21 the population data of its country for 2005. Births reached their highest level in seven years, mainly due to an increase in childbearing by women in their 30s.

Canada’s total fertility rate in 2005 was 1.54 children per woman, an increase from 1.53 in the previous year, and the highest rate since 1998. Nevertheless, Statistics Canada added that this is still well below what is known as the replacement level fertility, normally set at 2.2 children per woman.

Italy also recorded a slight increase, reported the agency ANSA on May 5. In 2006, the total fertility rate per woman rose to a 16-year high of 1.35. This is still below the European Union average of 1.52 and well below replacement level.

Europe in focus

The European demographic situation was the subject of this year’s Munich Economic Summit, held June 21-22. The summit brings together academics and leaders from politics, industry and finance. It is organized by Germany’s CESIfo economics think tank and backed by the BMW Herbert Quandt Foundation.

“The demographic changes that Europe experiences today are without precedent in its history,” said Jürgen Chrobog, chairman of the BMW Foundation Herbert Quandt, in his opening speech.

The low birthrates in Europe will lead to a decline of the labor force by roughly 21 million within the next 25 years, he observed, leading to negative consequences for economic output and competitiveness.

A combination of increasing longevity and low fertility constitute a “demographic time bomb” due to deficiencies in pension and family policies, warned Edward Palmer of Sweden’s Uppsala University.

Generally speaking, he noted, countries in Europe with higher fertility rates, such as France and the Scandinavian countries, are the ones with the most generous family policy. Given that the birth of each child involves a potential loss of income during the early years of childhood as well as the risk of missing out on work opportunities, Palmer called for family policies to provide adequate compensation.

Vladimir Spidla, European Union commissioner for Employment, Social Affairs and Equal Opportunities, also spoke at the meeting. Currently 16% of the European population is over the age of 65. If there are no changes in birthrates and immigration, by 2050, the proportion of old people will have almost doubled, he observed.

To help Europe bring about a demographic renewal, Spidla, among other points, recommended a greater attention to family needs. The decision to have children is a private matter, he acknowledged. He observed, however, surveys show that many women and men want more children than they actually bring into the world.

“Potential parents are afraid that looking after children would be a problem, or that they would have to decide between career and time with their children, or that it would be too expensive,” Spidla explained. “It is thus imperative that we improve the social and economic conditions for families and children.”

Unprecedented

A global overview of aging came in a recent report by the Population Division of the U.N. Department of Economic and Social Affairs. In its study “World Population Ageing,” the agency highlighted the unprecedented nature of rapid aging in many nations.

At the world level, the number of persons aged 60 or over is expected to exceed the number of children for the first time in 2047. Already, in 1998, in the more developed regions, the number of children — those aged under 15 — dropped below that of older persons in 1998.

In 2000, the population aged 60 years or over numbered 600 million, triple the number present in 1950. In 2006, the number of older persons had surpassed 700 million. By 2050, 2 billion older persons are projected to be alive, implying that their number will once again triple over a span of 50 years.

In the more developed regions, more than one-fifth of the population is currently aged 60 years or over, and by 2050 nearly one-third of the population in developed countries is projected to be in that age group.

In the less developed regions, older persons account today for just 8% of the population, but by 2050 they are expected to account for one-fifth of the population.

The Population Division also cautioned that the pace of population aging is faster in developing countries than in developed countries. Moreover, the aging in developing countries is taking place at lower levels of socioeconomic development than has been the case for developed countries.

Then there is the number of people potentially in the work force as a ratio to those who are already retired. The number of persons aged 15 to 64 per each older person aged 65 or over, has already declined from 12 to 9 between 1950 and 2007. By 2050, this is expected to drop to only 4 potential workers per older person, which will have a severe impact on taxation and social security policies.

In addition to the economic impact, the changes caused by aging will have a major influence on intergenerational questions of equity and solidarity, the U.N. report commented.

It is also unlikely, the U.N. agency continued, that fertility levels will rise again to the high levels common in the past. Therefore, the aging trend looks like it might be irreversible, making the young populations (that were common until recently) likely to become rare over the course of this century. The anti-family policies of many governments and international agencies are indeed set to bear bitter fruit in coming decades.



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  1. You are right , the immigration policies of western countries will have to more liberal to balance their economies. The ageing world population will force integration of the world into one whole.




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