GLOBAL AGING

Global aging are effect the U.S. economy

Global aging are effect the U.S. economy

Global Aging

For most of human history, until about a century ago, the elderly (people aged 65 and over) never amounted to more than 2 or 3 percent of the population. Today, in the developed world, they amount to 15 percent. By the year 2030, they will be around 25 percent. As recently as 1980, the median age of the oldest society on earth (Sweden) was 36. By the year 2030, the median age of the entire developed world is projected to be 45. In Japan and much of southern and eastern Europe, it will be over 50. As a whole, the developing world will remain much younger for the foreseeable future. Yet it too is aging—hence the term "global aging." Several major countries in East Asia and Latin America, including China, South Korea, and Mexico are projected to reach developed-world levels of old-age dependency by the middle of the century(Wachter, 2007).

Causes of Global Aging

Global aging is the result of two sweeping forces: falling fertility (fewer births per woman) and rising longevity (longer lives). The first decreases the relative number of young in the population, while the second increases the relative number of old. Worldwide, the fertility rate has fallen from 5.0 to 2.7 since the mid-1960s. In the developed countries, it has fallen to 1.5—far beneath the replacement rate needed to maintain a stable population over time. Meanwhile, since World War II, global life expectancy has risen from around age 45 to around age 65, for a greater gain over the past 50 years than over the previous 5,000. In the developed countries, life expectancy has risen from the mid-to-high 60s to the mid-to-high 70s, and in a few countries, including Italy and Japan, it has passed age 80. Other forces are also compounding the economic burden of rising old-age dependency: earlier retirement, rising health-care costs, inadequate personal savings, and declining levels of family support(Posner, 2005).

Differential ageing patterns and convergence

At the end of the 20th century, one in ten human beings was over age 60. By 2050, the ratio is projected to reach one in five. This is largely due to the fact that since 1960, global life expectancy at birth has increased by an average of 4 years per decade. Yet, this impressive statistic masks significant regional variation. Although the relative improvement is generally highest in developing countries, the gains are not strictly related to the initial conditions. The percentage increase registered in sub-Saharan Africa for example, is only slightly greater than that for the high income OECD countries. Most of the global gain in fact, is driven by mortality decline in Asia, and especially in East Asia(Wilmoth, 2006).

Clearly, regional factors are important in explaining the observed pattern of global ageing. These go beyond changes in general mortality trends and include exogenous shocks that can affect the ageing process. Two important examples can be found in sub-Saharan Africa and ...