Global Population Aging and Its Economic Consequences

Global population aging is an inevitable feature of the final stages of the demographic transition, a worldwide combination of low fertility and low mortality that result in older, more slowly growing (or even shrinking) populations. This trend raises two concurrent concerns: the risk of rising "dependency ratios" of the elderly on the working-age population, and falling global saving rates as the growing retired population begins to dissave after a lifetime of working. These are genuine concerns, but there are also factors that will ameliorate them. Although the burden of the dependency ratio will fall on public programs such as pensions and health care, it will occur in such a gradual fashion that resources can be effectively redirected over time. Moreover, the smaller labor force in an aged society can be more productive with a small pool of capital as resources per worker increase. Global Population Aging and Its Economic Consequences explains how the risks of global aging can be contained with a combination of foresight and prudent public policy. It also considers how these trends will affect the developing countries that have too often been neglected in discussions of global aging.