The Shape of Things to Come: Global Aging in the Twenty-First Century

Abstract

world stands on the threshold of a social transformation--even a revolution--with few parallels in humanity's past.... Perhaps two-thirds of all people who have ever reached the age of 65 are alive Thirty years ago, uncontrollable population growth seemed to be a major threat to the world's long-term future. Paul Ehrlich's worldwide best seller, The Population Bomb, predicted a teeming and youthful humanity falling off the edge of all seven continents. More recently, in a little-noticed shift of expert opinion, demographers have begun to project a dramatic deceleration in global population growth and an equally dramatic aging of societies worldwide. In 1970, the future was crowded with babies. Today, it is crowded with elders. Most young people have difficulty contemplating their own old age or preparing for the discomfort and dependency that often accompany it. Likewise, the world today finds it hard to confront its collective aging, much less the difficult political and economic choices that aging societies will have to make. Yet we can no longer afford denial. The accumulating evidence is now overwhelming: The world stands on the threshold of a social transformation---even a revolution--with few parallels in humanity's past. Indeed, this revolution has already begun. Perhaps two-thirds of all people who have ever reached the age of 65 are alive today. It's time we take an unflinching look at the shape of things to come. For nearly all of history, the elderly (people age 65 and over) never amounted to more than 2 or 3 percent of the population. Roughly 150 years ago, that share started to rise. Today, in the developed world, (1) it amounts to 15 percent. By the year 2030, the UN projects that it will be nearing 25 percent and may be hitting 30 percent in Japan and some of the fast-aging countries of continental Europe. (2) As a whole, the developing world will remain much younger for the foreseeable future. Yet it too is aging. Several major countries in East Asia--including China, Taiwan, Singapore and South Korea--are projected to reach developed-world levels of old-age dependency by the middle of this century. Global aging will pose daunting choices to voters and political leaders and place difficult burdens on workers and employers. There is the staggering fiscal cost. In every major developed country, the unfunded liability for public pensions alone amounts to 100 to 250 percent of GDP--more, in every country, than the official public debt. (3) In many affluent societies, global aging may reorder partisan agendas and trigger generational struggles between the young who pay and the old who receive. Fifty years from now, the populations in some developed countries may reach a median age of 55, twenty years older than the oldest median age (35) of any country on earth as recently as 1970. Only twenty-five years from now, according to European Commission President Romano Prodi, an estimated 113 million Europeans--nearly one-third of the population of the European Union--will be pensioners. (4) So we have to ask: When that time comes, who will be doing the work, paying the taxes, saving for the future and raising the next generation? The challenge of global aging transcends its impact on government budgets. It promises to restructure the economy, reshape the family, redefine politics and even rearrange the geopolitical order of the twenty-first century. As labor forces shrink, economic growth may stagnate or even turn negative in many developed countries--not just during cyclical downturns, but decade in and decade out. Savings rates may drop to record lows amid overcapacity in housing, plant and public infrastructure. Financial markets may be strained by massive cross-border capital flows, while social stability may be wracked by massive cross-border worker migration. And the implications for world affairs? …

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