Population Aging

Population aging is primarily the result of past declines in fertility, which produced a decades long period in which the ratio of dependents to working age adults was reduced. Rising old-age dependency in many countries represents the inevitable passing of this %u201Cdemographic dividend.%u201D Societies use three methods to transfer resources to people in dependent age groups: government, family, and personal saving. In developed countries, families are predominant in supporting children, while government is the main source of support for the elderly. The most important means by which aging will affect aggregate output is the distortion from taxes to fund PAYGO pensions.

Economic Costs of Population Aging

In just over three decades all those born during the post-war baby boom will be 65 and older, and the fraction of the population 'old' will be far greater than previously experienced in Canada, or indeed in any modern industrial nation. That prospect has given rise to major concerns about our ability as a society to meet the large anticipated additions to health care, pension, and other costs associated with the increase in the older population. However, a balanced view requires that attention be given to all publicly provided services, not only to those services used in large measure by the elderly, and also to privately provided goods and services, since the costs must be charged against the same national income in both cases. Beyond that, it is important to recognize that population change affects not only the demand side of the economy, but also the supply side, the nation's productive capacity. This paper reviews the literature to assess the magnitude of the prospective cost increases associated with the aging of the Canadian population and considers the practical implications for government programs and policiespopulation aging; economic costs; baby boom

Geographic Dimensions of Aging in Canada 1991-2001

Although population aging at the national level has received much attention, its geographical dimensions have not. Here we explore the demographic processes which underlie population aging at the provincial and metropolitan scale for the periods 1991-1996 and 1996-2001. A demographic accounting framework is proposed which differentiates between the effects of aging-in-place and net migration on population aging. We also examine the relationships between the various measures of aging and social and economic characteristics of metropolitan areas over the two periods. We demonstrate that the path of population aging is susceptible to social and economic context; in particular, the struggles of the British Columbian economy in the second half of the decade and the deteriorating economies of older resources based communities are associated with increases in population aging over and above the general aging taking place in Canadian society.population aging; geographic differences

Economic Costs of Population Aging.

In just over three decades all those born during the post-war baby boom will be 65 and older, and the fraction of the population ‘old’ will be far greater than previously experienced in Canada, or indeed in any modern industrial nation. That prospect has given rise to major concerns about our ability as a society to meet the large anticipated additions to health care, pension, and other costs associated with the increase in the older population. However, a balanced view requires that attention be given to all publicly provided services, not only to those services used in large measure by the elderly, and also to privately provided goods and services, since the costs must be charged against the same national income in both cases. Beyond that, it is important to recognize that population change affects not only the demand side of the economy, but also the supply side, the nation’s productive capacity. This paper reviews the literature to assess the magnitude of the prospective cost increases associated with the aging of the Canadian population and considers the practical implications for government programs and policies.

Economic Costs of Population Aging

In just over three decades all those born during the post-war baby boom will be 65 and older, and the fraction of the population 'old' will be far greater than previously experienced in Canada, or indeed in any modern industrial nation. That prospect has given rise to major concerns about our ability as a society to meet the large anticipated additions to health care, pension, and other costs associated with the increase in the older population. However, a balanced view requires that attention be given to all publicly provided services, not only to those services used in large measure by the elderly, and also to privately provided goods and services, since the costs must be charged against the same national income in both cases. Beyond that, it is important to recognize that population change affects not only the demand side of the economy, but also the supply side, the nation's productive capacity. This paper reviews the literature to assess the magnitude of the prospective cost increases associated with the aging of the Canadian population and considers the practical implications for government programs and policies.population aging; economic costs; baby boom

The Graying of Global Population and Its Macroeconomic Consequences

Population aging is emerging as a major demographic trend in many countries, with potentially important implications for a variety of macroeconomic issues. Notwithstanding these challenges, population aging will likely have a comparatively modest effect on economic growth. Although the changed age distribution would be expected to cause the labor force participation rate to decrease, the ratio of labor force to population will actually increase in most countries. This will occur because the lower youth dependency rate and the increased rate of female labor force participation – both of which may reasonably be expected to follow from the fertility rate declines that are driving population aging – will counterbalance the shifting of adults toward older ages at which labor force participation and savings rates are lower. Behavioral and policy responses to population aging – including higher savings for retirement, a higher rate of human capital accumulation, alternate pension funding plans, and (possibly) increased migration from labor-abundant to labor-scarce countries – also suggest that population aging need not necessarily significantly impede economic growth.Global population, macroeconomics, aging

Labor market effects of population aging

This paper analyzes effects of population aging on the labor market and determines their broad implications for public policy. It takes Germany as an example, but it equally applies to the other large economies in Continental Europe. The paper argues that, alongside the amply discussed, demographically-determined increase in the contribution and tax burden which is responsible for the ever widening gap between gross and disposable earnings, two other important areas of policy deserve greater attention. First, it is unlikely that the decline in the relative size of the economically active population will be offset by higher capital intensity. Labor productivity will need to increase over and above this mechanism in order to compensate for the impact of population aging on domestic production. Hence, we will need more education and training to speed up human capital formation. Second, the shift in the age structure will also change the structure of demand for goods. This, in turn, will have large effects on the pattern of employment across different sectors of the economy and will require a substantial increase in labor mobility in order to accommodate these structural changes.

Labor Market Effects of Population Aging

This paper analyzes effects of population aging on the labor market and determines their broad implications for public policy. It takes Germany as an example, but it equally applies to the other large economies in Continental Europe. The paper argues that, alongside the amply discussed, demographically-determined increase in the contribution and tax burden which is responsible for the ever widening gap between gross and disposable earnings, two other important areas of policy deserve greater attention. First, it is unlikely that the decline in the relative size of the economically active population will be offset by higher capital intensity. Labor productivity will need to increase over and above this mechanism in order to compensate for the impact of population aging on domestic production. Hence, we will need more education and training to speed up human capital formation. Second, the shift in the age structure will also change the structure of demand for goods. This, in turn, will have large effects on the pattern of employment across different sectors of the economy and will require a substantial increase in labor mobility in order to accommodate these structural changes.

Population Aging and Legal Retirement Age.

This paper analyzes the effects of population aging on the preferred legal retirement age. What is revealed is the crucial role that the indirect ’macro’ effects resulting from a change in the legal retirement age play in the optimal decision. Two Social Security systems are studied. Under a defined contribution scheme aging lowers the preferred legal retirement age. However, under a defined pension scheme the retirement age is delayed. This result shows the relevance of correctly choosing the parameter affected by the dependency ratio in the design of the Social Security programme.Social security, aging, legal retirement age