The Future is Old
Rising life expectancy around the world is an accomplishment well worth celebrating. But it is worth remembering that societal aging comes with significant long-term economic consequences – and that many societies are aging at an unprecedentedly rapid pace.
MUNICH – The aging of our societies is one of the greatest success stories of the twentieth century. More than three decades have been added to the lives of hundreds of millions of people over the last hundred years. This is an accomplishment well worth celebrating; but we must also bear in mind that with increased longevity come significant long-term economic consequences – and that many societies are aging at a record speed.
Last year, the OECD warned that the world was aging at an unprecedented rate and that this could help slow global annual economic growth from an average of 3.6% this decade to about 2.4% from 2050 to 2060. OECD countries in particular will be hit by a double demographic shock. Not only will their societies be rapidly aging; diminishing income gaps between rich countries and emerging economies are likely to slow immigration flows, shrinking the workforce by 20% in the eurozone and 15% in the United States.
Demographic researchers divide countries into four categories, according to the share of the over-65 population: young (less than 7% aged 65 or over), aging (7-13%), aged (14-20%), and super-aged (more than 21%). Today, just three countries – Germany (21%), Italy (22%), and Japan (26%) – qualify as super-aged societies. In the next five years, they are expected to be joined by Bulgaria, Finland, Greece, and Portugal. In the following decade, Europe will continue to age, with another 17 countries, including Austria, France, Sweden, and the United Kingdom, expected to become super-aged, along with Canada, Cuba, and South Korea.