We’re Only Getting Older: The Economic and Health Problems that Come with an Aging Society Growing Larger

All around the world, the population over 65 is growing faster than any other age group. By 2030, 1 in 6 people in the world will be aged 60 years or older. At this time, the share of the population aged 60 years and older will increase from 1 billion in 2020 to 1.4 billion. By 2050, the world’s population of people aged 60 years and older will double (2.1 billion). By comparison, it was only 9% or one in 11 people in 2019. The trends for the aging population or disproportionate in Europe and North America by the time 2050, comes one and four people will be 65 and over. In 2020 for the first time in human history, the number of people aged 60 years and older outnumbered children younger than 5 year of ages. Globally all countries have experienced substantial increase in life expectancy since the 1950s. Since life expectancy has been increasing at birth this provides improvements in survival at older ages accounting for the growth of the aging population.

Many nations have started to realize the major effects of an aging population such as a major decline in the working age population and then the surge of healthcare costs. This leads to their being a smaller working age population as a result and supply shortages for qualified workers.  Also, nations that have large over 65 populations depend on a smaller amount of people to pay for higher healthcare costs as well as pension and other public funded programs. This leads to supply issues including declining productivity, higher labor costs, reduced international competitiveness and may cause a wage inflation and creating a vicious cycle price wage issue.

Given the demand of healthcare rises with age, countries must allocate more money and resources to the healthcare systems for the aging population. The healthcare spending as a share of GDP is already much higher in advance economies due to having the highest rapidly aging population which causes them to have increased spending on healthcare.  While in society, life expectancy has increased but that does not negate the side effects that come with aging such as associated health conditions. As people age many health issues causes an increase in the risk of diseases and the gradual decrease in physical and mental capacity.

With the world’s population of people aged 60 years and older increasing, it is not known yet if this will negatively affect the economies when there needs to be a transitioning of the markets needed for their population or if there will be a positive or negative relationship with immigration to fill the voids in sectors by the aging population or will the future just adjust the economy to the changing age demographics.

Article Written by Allison Strauss.

Sources:

United Nations- Ageing, February 4, 2023 available at https://www.un.org/en/global-issues/ageing

Investopedia- 4 global economic issues of an aging population, August 9, 2023, available at https://www.investopedia.com/articles/investing/011216/4-global-economic-issues-aging-population.asp

World Health Organization- Ageing and health, October 1, 2022, available at https://www.who.int/news-room/fact-sheets/detail/ageing-and-health