More Elderly, Fewer Babies

Population Report Forecasts Worker Shortage

By Father John Flynn

ROME, MARCH 25, 2007 ( The latest population projections point to a big increase in the number of elderly people in coming decades. On March 13 the United Nations Population Division published the “World Population Prospects: The 2006 Revision.”

The latest edition of the U.N.’s biennial population projections forecasts a world population of 9.2 billion by 2050, up from the current 6.7 billion. The increase will come from the less developed countries, whose population is projected to rise from 5.4 billion in 2007 to 7.9 billion in 2050. The report contains a series of high, medium and low population projections. The 9.2 billion figure is the medium variant.

In the economically developed nations, the report expects the population to remain largely unchanged at 1.2 billion. In fact, it would decline if it were not for immigration. The United Nations calculates that there will be a net migration from developing to developed countries of around 2.3 million people annually.

In all countries, however, by 2050 the average age will be significantly higher. No less than half of the increase between 2005 and 2050 is expected to come from a rise in the population 60 and over. By contrast, the number of those under 15 will decline slightly. Aging will be particularly marked in the developed regions, where the population 60 and over is expected to nearly increase from 245 million to 406 million.

The 2006 Revision also forecasts that fertility will continue to decline in developing countries. The study projects a drop from 2.75 children per woman in 2005-2010 to 2.05 in 2045-2050. This trend will be even more marked in the group of 50 least developed countries, where the decrease is expected to be from the current level of 4.63 children per woman to 2.50 children per woman.

The projected population level for 2050 could, however, prove to be too high. The United Nations points out that the 9.2 billion figure assumes that many of the countries with a high level of AIDS patients will be successful in providing antiretroviral treatment. Based on this assumption, and on a forecasted decline in the prevalence of HIV/AIDS, the 2006 Revision lowers by 32 million the number of deaths expected by 2050, compared to the 2004 Revision.

From boom to bust

Only a few years ago, population concerns were centered on what was supposed to be the threat due to a boom in births. The exaggerated fears of a population boom led to many abuses, such as forced sterilizations and abortions.

Now, however, the 2006 Revision states that the world population is in the midst of an “unprecedented transformation” due to a change from a situation of high mortality and high fertility to one of low mortality and low fertility.

By 2045, the number of persons in the world aged 60 and over is set to surpass, for the first time in history, the number of those under 15.

The report notes that in Europe, all but three countries (Albania, Ireland and Moldova) already have a median age higher than 34, and 12 countries or areas in the continent have median ages higher than 40. Japan has the oldest population in the world, with a median age of nearly 43 years in 2005.

By 2050 the continued aging of the population means that, according to the medium variant, all developed countries are expected to have median ages higher than 40 years. By then the median age in Japan is projected to reach 55 years.

Meanwhile, the populations in Asia, Latin America and the Caribbean will be undergoing a more rapid aging than the developed regions, due to the fertility reductions imposed as a result of family planning programs.

Combined with the larger populations in many developing nations, this means that while in 2005 some 64% of the older persons alive lived in developing countries, by 2050 nearly 80% of those 60 years or over are expected to live in developing countries. In 37 of the 49 developing countries in Asia, the median age is expected to rise by at least 12 years between 2005 and 2050. By 2050, the median age is expected to be above 40 years in 23 countries in Asia, including China.

In Latin America and the Caribbean, the median age is projected to increase by over 12 years in 32 of the 37 countries in area, and by 2050, 21 countries in the region are expected to have a median age higher than 40, including Brazil and Mexico. By contrast, aging in Africa is projected to be moderate.

By 2050, it is expected that a quarter of the population in
Asia, Latin America and the Caribbean, Northern America and Oceania will be aged 60 or over. In Europe the older population is expected to account for 35% of the population, while in Africa its share will be slightly above 10%.

Financial pressures

This will bring with it a big reduction in the population that is at work, and paying taxes to support those who are retired. The support ratio — the ratio of persons aged 15 to 64 over the sum of the number of children and of persons aged 65 or over — is expected to begin declining after 2010 in Europe, Northern America and Oceania, after 2015 in Asia and after 2025 in Latin America and the Caribbean.

By 2050, Europe is expected to have the lowest support ratio, at 1.4 persons of working age for every dependant. Other regions are expected to have support ratios ranging from 1.6 in Northern America to 1.9 in Africa.

The financial challenges caused by an aging population are receiving growing attention. On March 13, the London-based Financial Times newspaper published an article on the problems faced by Singapore.

Singapore, with its successful economy, should be well-placed to handle a growing number of elderly. It has also avoided setting up a costly welfare system. Nevertheless, by 2030 Singapore is expected to have a quarter of its population comprised of persons above 65 years of age. With many of the older workers in low-paying jobs, and the prospect of only 2.2 workers to support each elderly person, compared with 10 workers in 2000, a growing income gap between rich and poor is forecast.

Immigration is often proposed as one solution to help alleviate the financial pressures of an aging population, but one recent analysis suggests it may not be such a big help. Harvard professor Martin Feldstein, writing in the Financial Times on Dec. 14, had a look at the situation in Spain.

He based his comments on a projected decline of the number of workers per retirees. Today the ratio is 4.5 to 1, the projected ratio by 2050 is 2 to 1. Feldstein noted that the cost of government pensions is projected to rise from 8.4% of gross domestic product now, to 15.7% in 2050.

An additional 2 million workers coming from immigrants, Feldstein calculated, could lead to a 6% rise in GDP. However, at least half of this would be consumed by the immigrants and their families. Taking out benefits for the immigrants themselves, the net additional revenue available to help pay pensions, would be only about 2% of GDP.

On April 5, 2006, Archbishop Celestino Migliore, permanent observer of the Holy See to the United Nations, addressed a session of the U.N.’s Commission on Population and Development of the Economic and Social Council.

Radical population policies in past years have caused serious problems due to falling birthrates. “If the development of the world’s peoples is to be both sustainable and sane, such flawed policies will have to be replaced by truly people-centered ones,” he argued.

A challenge, indeed, for a rapidly aging world.

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