Growing old before growing rich?
The world is projected to reach a profound turning point this year. For the first time in history, the number of people aged 65 years and over (“older people”) will exceed the number of children under 5. Since the 1950s, the graph of the former as a percentage of total global population has been rising, while the graph for the latter has been falling. The two graphs will cross over this year, ushering in a new era wherein the world will have more older people than young children. The estimate for 2030 is 1 billion older people, accounting for 13 percent of the total population. The proportions of older people are typically highest in more developed countries, but their numbers are now growing faster in the less developed world. A 140-percent increase in the number of older people is projected for less developed countries between 2006 and 2030, nearly three times faster than the 51-percent increase expected in more developed countries.
All this is happening because fertility has been declining while health and longevity are improving. More developed countries began to see declining fertility in the early 1900s, leading to current fertility levels that are below the population replacement rate of two live births per woman. Surprisingly, fertility has declined at an even faster pace in many less developed countries in the past 20 years.
Projections by the United Nations have the number of people aged 60 and above growing 56 percent from 901 million in 2015 to 1.4 billion in 2030, and more than doubling to 2.1 billion by 2050. But unlike past generations of the elderly, the coming cohort of senior citizens would be the first to age with a generally higher level of health and education, owing to dramatic technological developments that have improved public health and education. In particular, public health has seen great advancements in disease prevention and control, while advances in the neurosciences and in information and communication technology have similarly enhanced the state of education.
With more and more people living well beyond 80 years, senior citizens are now much more prominent in the population of the world more than in any period of human history. This is in fact the fastest-growing population segment in the developed world, with women dominating this age group at a ratio of two to one. The present senior citizens and elderly are very different from their predecessors of, say, 10-15 years ago. Aside from there being so many more of them, they are also more healthy, more educated, more wealthy, and more active. In a 2009 paper, Ilona Kickbusch and Prisca Boxler wrote: “Who would have thought in the 1960s that the Rolling Stones would still be touring 40 years later, or that the audiences of many rock concerts would be well into their 60s! Who would have thought that the sale of electric guitars would peak in Japan when the first baby boomers started to retire? … [And] who would have thought that the largest group using Internet dating would be people over 50?”
The authors further observed: “With improved health, education and economic security, this generation is able to continue to enjoy traveling, renovate their houses and buy luxury cars. Consequently, it comes as no surprise that the average age of a Porsche buyer is 58. Being above 60 no longer means looking, behaving and acting in the image of a grandparent of yesteryears. They run marathons, go bungee jumping, go out in the evening, work as volunteers—in short, they are visible and they are active.” We now often hear it said that “60 is the new 40,” or “80 is the new 60.” These imply that there’s much more to market growth opportunities in aging economies than caregiving, geriatric medicine, retirement havens, and nursing homes.
Still, there are the “oldest old,” or those 85 years and over, and this segment is also growing rapidly with constantly improving public health and longer life expectancies. On a global level, the 85-and-over population was projected to increase 151 percent between 2005 and 2030, compared to a 104-percent increase for the population aged 65 and over, and a 21-percent increase for the population under age 65. The US National Institute on
Aging notes that the oldest old have the highest population levels of disability that require long-term care because of chronic disease. As such, they consume a disproportionate amount of public resources, which can be a fiscal burden to less-endowed economies.
The particular challenge now is that while most rich countries had decades to adjust to this change in age structure, many less developed countries are seeing these changes happen within a single generation. It took France more than a century for its population aged 65 and above to increase from 7 to 14 percent of total population; Brazil will take only two decades to see the same demographic aging process transpire. Institutions need to adapt quickly to the changing age structure. Some less-developed nations are forced to confront issues such as social support and allocation of resources across generations, but without the accompanying economic growth that characterized the experience of aging societies in the West.
The Philippines is somewhat luckier, as its historically higher population growth rate makes working-age people still the largest segment of our population for some time to come. But with fast-dropping fertility rates, this could change within a generation, as it did in Brazil. This means that we must achieve and sustain high and inclusive growth and attain high-income status within this generation, lest our economy grow old before it grows rich.
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