Saturday, August 25, 2007

Impact of Aging Populations

The latest issue of Nature has an interesting "News and Views" piece by Frances Cairncross which addresses the impact of aging populations. Here are a few excerpts:

Ageing populations raise the spectre of crippling healthcare costs. Extra spending on medical research might bring healthier, happier older people who work (and pay taxes) for longer. Is that a good investment?

Many of the changes that will dominate the first half of the coming century are uncertain, but one is not: the global population will grow older. Already those aged 65 or over, who have rarely accounted for more than 2–3% of the populations of most countries, make up 15% of the rich world's inhabitants. The proportion is also rising in poor countries, as women in many nations have fewer children, and life expectancy rises, not just in infancy but in late middle-age and even in old age.

....This matters not only for those with greying hair, but also for governments. A consequence of falling fertility rates is that there will be fewer young people relative to the number of old people. One result is an upward creep in the average age of the labour force; another is a fall in the proportion of workers to non-working old folk. The upshot is fewer taxpayers, but also more people who are not contributing to the economy and are likely to draw increasingly on health services. If the books are to balance, people will need to work for longer. But will their health be good enough for them to do so? And if it is, will they be as productive as younger folk, or will an older workforce in industrialized countries lose its competive edge against industrializing countries that still have youthful employees?