By Julie E 
Photo Credit ( Freepik )
The aging of the population is one of the greatest challenges that the global order will encounter in the future decades.
Over the past century, the majority of high-income countries have experienced a continuous aging process. The average age of these countries has consistently increased as a result of a combination of low childbearing rates and improved mortality rates. In Europe and North America, the number of individuals over the age of 60 exceeds that of children under the age of 15. Western Europe will have nearly half of its population over 50, 25% over 65, and 13% over 75 by 2030.
Middle-income countries are currently experiencing an aging population, but they have the potential to capitalize on a sizable cohort of youthful adults.
Countries can transform this youth bulge into a demographic that fosters growth by implementing the appropriate factors, including sound governance, regulation, health care, and education. This transformation manifests itself geographically: Twenty-five percent of the global workforce resided in Europe one hundred years ago. Asia will concentrate around 2.5 billion workers—half of the global workforce—by the mid-century, but that percentage has now dropped to below 10%. However, by 2040, Asia, Latin America, and the Caribbean will have a greater number of elderly than young people. Additionally, by the mid-century, the global population will balance between the young and the old, with each cohort accounting for 21% of the total.
Thus, the majority of regions will experience the aging of their populations and a transition from a preponderance of youthful dependents to a majority of elderly dependents during this century.
People frequently perceive Japan as the quintessential geriatric society. The nation’s childbearing rate was the lowest in the world due to the rapid decline in births following World War II. It reached the replacement rate (two children per couple) in the late 1950s, fell to 1.5 in the 1990s, and 1.3 in 2005 before marginally recovering to its current rate of 1.48. Japan also exhibited a declining mortality rate, with male life expectancy increasing from approximately 50 in the immediate postwar years to 69 by the mid-1960s and female life expectancy increasing from 54 to 74. The life expectancies of men and women in Japan are currently among the highest in the globe, with an average of 81 years and 87 years, respectively.
Another illustration of an extreme elderly society is Germany. The fertility rate of former East Germany achieved 0.77 after unification in 1990 and has only recently increased to its current level of 1.46, while former West Germany has a rate of 1.38. The substantial influx of young people migrating to the west has further exacerbated the higher rate of population aging in the east of the country. We anticipate a decrease in the national population in the coming decades, and a reduction in the labor force from its current 55 million members to less than 40 million by the midpoint of the century.
In fact, the actual life expectancy of today’s European babies will exceed 100 years as a result of the increase in longevity. By the end of the 21st century, there will be over 5 million centenarians in Europe.
This will undoubtedly have substantial implications for the provision of housing and transportation, leisure and community behavior, social interaction, patterns of saving and consumption, health and welfare service demand, family and domestic structure, and labor supply. The demographic burden has become a topic of concern as governments and policymakers have become more aware of the implications of population aging. People anticipate that the pressure of health and pension demand will disintegrate national health services and even economies. It is also apprehensive that families will no longer be present to compensate for the inadequate public provision.
The presumption that prospective older labor forces will be less productive and innovative, as well as that an older population will consume less, are the roots of a significant amount of the anxiety surrounding the economic challenge. These assumptions have adverse effects on economies. However, there are additional obstacles. In particular, there is a likelihood that the total quantity of ill health and disability will rise, which will result in an increase in the demand for health care spending. As illnesses change from short-term, contagious ones to long-term, ongoing ones, there will need to be big changes in how health care resources are distributed and how medical and health care services are set up. Furthermore, demographic change will diminish the availability of younger family members to provide informal family care.
However, assumptions derived from the characteristics and behavior of current older populations predicate the primary concerns—public spending on pensions, high dependency ratios between workers and nonworkers, increases in health care costs, declining availability of family-based care, and a slowdown in consumption due to an increase in older people and a decrease in younger people. While empirical evidence substantiates some of these concerns, the majority are speculative myths prevalent in public discourse, lacking a strong empirical foundation. The rhetoric that defines dependency and productivity conceals the complexity of social and economic behavior and the ability of societies and individuals to adapt to changing circumstances. It is highly probable that future generations of senior adults will possess greater levels of human capital, including education, skills, and abilities. Additionally, the onset of old age, as defined by retirement and dependency, will occur at significantly older ages than it does today. This suggests that policy can address these concerns, given a strong political and economic commitment to doing so.
In light of the aging populations in high-income countries, the two primary challenges are the provision of sustainable and appropriate health care and the guarantee of an income for these older individuals, whether through work, pensions, assets, or reserves. Critically, the acceptance of the generational contract and of generational succession are two comprehensive concepts that are present in the majority of societies.
Most societies acknowledge that adults care for their dependent children, and these adult children will eventually care for their dependent parents. Families and households carry out this responsibility in traditional societies, whereas public welfare systems handle it in modern societies. Given their aging populations, many countries are currently deliberating whether to modify this contract to ensure that older individuals take more direct responsibility for their own late-life care and support. This is especially true in societies where modern medicine is not only extending life expectancy but also increasing the number of years of infirmity and dependency.
As a result of the increase in longevity, today’s European babies should live longer than 100 years.
Nevertheless, in high-income countries, new cohorts of people who are highly educated, skilled, and increasingly healthy are approaching traditional retirement ages and are continuing to engage in economic activity, including producing, consuming, and paying taxes. Additionally, the extension of life expectancy significantly increases the accumulation of assets, which, when invested, can increase productivity, generate asset income, and elevate living standards. In the same way, population aging may influence the aggregate savings rate by increasing the proportion of the population in age groups that are traditionally associated with drawdown. However, since retirees tend to save more than young workers, it may also affect an economy’s average savings per capita. For instance, projections indicate that population aging will lead to a 25% increase in the national net worth per person of working age in the United States by the mid-century. Similarly, proponents argue that extending life expectancy will necessitate higher savings during working years to sustain a high standard of living in retirement. These two factors, the necessity of saving more for an extended retirement and the changes in the age distribution of a population, demonstrate the potential to increase a nation’s asset income.
Therefore, it is possible that the population’s aging may not be a significant issue if the population remains in excellent health. This could be the case if the factor of generational succession did not exist. There is a well-defined concept of the generational transmission of status, assets, power, and wealth through the generations at a consistent pace in the majority of societies. What will occur when individuals are in their eighties when they inherit from their parents and ancestors as a result of the extreme longevity of a population? What is the impact on our communities and workforces when healthy, active individuals remain in full employment into their ninth decade?
It is feasible to accommodate this transformation; however, it necessitates that individuals and organizations reconsider the life cycle. This necessitates a transition from the perception of a linear progression in work and income to a more malleable life course. In this version, education and retraining are ongoing throughout the lifespan of all individuals. In this version, parents can leave their full-time, high-pressure jobs to care for their young children, and they can rejoin the workforce in their late 40s, feeling rejuvenated and ready to contribute for another 30 years.