A Global Perspective Why Population Aging Matters

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  • Topic: Demography, Population, Aging
  • Pages : 5 (1732 words )
  • Download(s) : 1060
  • Published : August 25, 2010
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Aging of population (also known as demographic aging, and population aging) is a summary term for shifts in the age distribution (i.e., age structure) of a population toward older ages.  A direct consequence of the ongoing global fertility transition (decline) and of mortality decline at older ages, population aging is expected to be among the most prominent global demographic trends of the 21st century. Population aging is progressing rapidly in many industrialized countries, but those developing countries whose fertility declines began relatively early also are experiencing rapid increases in their proportion of elderly people. This pattern is expected to continue over the next few decades, eventually affecting the entire world.  Population aging has many important socio-economic and health consequences, including the increase in the old-age dependency ratio.  It presents challenges for public health (concerns over possible bankruptcy of Medicare and related programs) as well as for economic development (shrinking and aging of labor force, possible bankruptcy of social security systems). Defining and measuring population aging As the study of population aging is often driven by a concern over its burdening of retirement systems, the aging of population is often measured by increases in the percentage of elderly people of retirement ages. The definition of retirement ages may vary but a typical cutoff is 65 years, and nowadays a society is considered relatively old when the fraction of the population aged 65 and over exceeds 8-10%. By this standard, the percentage of elderly people in the United States stood at 12.6% in 2000, compared with only 4.1% in 1900 and a projected increase to 20% by the year 2030. A related measure of population aging is the elderly dependency ratio (EDR): the number of individuals of retirement ages compared to the number of those of working ages. For convenience, working ages may be assumed to start at age 15, although increasing proportions of individuals pursue their education beyond that age and remain, meanwhile, financially dependent, either on the state or, increasingly, on their parents or bank managers. The ratio of the elderly dependent population to the economically active (working) population is also known as old-age dependency ratio, age-dependency ratio or elderly dependency burden and is used to assess intergenerational transfers, taxation policies, and saving behavior.

Another indicator of the age structure is the aging index (sometimes referred to as the elder-child ratio), defined as the number of people aged 65 and over per 100 youths under age 15. In 2000, only a few countries (Germany, Greece, Italy, Bulgaria, and Japan) had more elderly than youth (aging index above 100). By 2030, however, the aging index is projected to exceed 100 in all developed countries, and the index of several European countries and Japan are even expected to exceed 200. To date, aging indexes are much lower in developing countries than in the developed world, but the proportional rise in the aging index in developing countries is expected to be greater than in developed countries. These indicators of population aging are mere head-count ratios (HCR), that is, they simply relate the number of individuals in large age categories. These indicators fail to take into account the age distribution within these large categories, in particular among the elderly. When the fertility and mortality trends responsible for population aging have been fairly regular over time, the population growth is positively correlated with age (i.e., the oldest age groups are growing fastest). This implies that if the proportion of the population over age 65 is increasing, within that 65-and-over population the proportion over, say, age 80 is also increasing. As health, financial situation, and consumption patterns may vary greatly between 65 year-olds and 80 year-olds, simple ratios conceal important heterogeneity in the...
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