Why Population Aging Matters: A Global Perspective by National Institute of Aging - HTML preview

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Why Population Aging Matters

A Global Perspective



Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Overview—Our.Aging.World. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . . 2

Introduction—The.Cost.of.Waiting. . . . . . . . . . . . . . . . . . . . . . . . 4

Trend.1:.An.Aging.Population. . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Trend.2:.Increasing.Life.Expectancy. . . . . . . . . . . . . . . . . . . . . . 8

Trend.3:.Rising.Numbers.of.the.Oldest.Old. . . . . . . . . . . . . . . . .10

Trend.4:.Growing.Burden.of.Noncommunicable.Diseases. . . . . .12

Trend.5:.Aging.and.Population.Decline. . . . . . . . . . . . . . . . . . . .14

Trend.6:.Changing.Family.Structure. . . . . . . . . . . . . . . . . . . . . .16

Trend.7:.Shifting.Patterns.of.Work.and.Retirement. . . . . . . . . . .18

Trend.8:.Evolving.Social.Insurance.Systems. . . . . . . . . . . . . . . .21

Trend.9:.Emerging.Economic.Chal enges. . . . . . . . . . . . . . . . . .24

Endnote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Suggested.Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28





Foreword > People are living longer and, in some parts of the world, healthier lives. This represents one of the crowning achievements of the last century but also a significant challenge. Longer lives must be planned for. Societal aging may affect economic growth and many other issues, including the sustainability of families, the ability of states and communities to provide resources for older citizens, and international relations. The Global Burden of Disease, a study conducted by the World Health Organization and the World Bank, with partial support from the U.S. National Institute on Aging, predicts a very large increase in disability caused by increases in age-related chronic disease in all regions of the world. In a few decades, the loss of health and life worldwide will be greater from noncommunicable or chronic diseases (e.g., cardiovascular disease, dementia and Alzheimer’s disease, cancer, arthritis, and diabetes) than from infectious diseases, childhood diseases, and accidents.

Despite the weight of scientific evidence, the significance of population aging and its global implications have yet to be fully appreciated. There is a need to raise awareness about not only global aging issues but also the importance of rigorous cross-national scientific research and policy dialogue that will help us address the challenges and opportunities of an aging world.

Preparing financially for longer lives and finding ways to reduce aging-related disability should become national and global priorities. Experience shows that for nations, as for individuals, it is critical to address problems sooner rather than later. Waiting significantly increases the costs and difficulties of addressing these challenges.

This report paints a compelling picture of the impact of population aging on nations. It provides a succinct description of population trends that are transforming the world in fundamental ways. We hope this information will stimulate dialogue about biomedical, economic, and behavioral issues and encourage international study to determine the best ways to address this universal human experience. We trust that members of the global community will be inspired to share their recommendations and their experiences so that we can all plan for the aging of our world’s population. We are, after all, planning for our own futures.

Paula J. Dobriansky, Ph.D.

Under Secretary for Democracy and Global Affairs

Department of State

Richard M. Suzman, Ph.D.

Richard J. Hodes, M.D.

Director, Behavioral and Social Research Program


National Institute on Aging

National Institute on Aging

National Institutes of Health

National Institutes of Health


o v e r v i e w

Our Aging World


as.a.world ..In.2006,.almost.500.mil ion.people.worldwide.

were.65.and.older ..By.2030,.that.total.is.projected.to.

increase.to.1.bil ion—1.in.every.8.of.the.earth’s.inhabitants ..



wil .see.a.jump.of.140.percent.by.2030 .

. . . . w H y P o P U l A t I o N A G I N G m A t t e R S : A G l o B A l P e R S P e c t I v e A.Host.of.Chal enges

l Family structures are changing. As people

live longer and have fewer children, family

While global aging represents a triumph of

structures are transformed, leaving older

medical, social, and economic advances over

people with fewer options for care.

disease, it also presents tremendous chal enges.

l Patterns of work and retirement are shifting.

Population aging strains social insurance and

Shrinking ratios of workers to pensioners

pension systems and chal enges existing models of

and people spending a larger portion of

social support. It affects economic growth, trade,

their lives in retirement increasingly strain

migration, disease patterns and prevalence, and

existing health and pension systems.

fundamental assumptions about growing older.

l Social insurance systems are evolving. As

Using data from the United Nations, U.S. Census

social insurance expenditures escalate, an

Bureau, and Statistical Office of the European

increasing number of countries are evaluating

Communities as well as regional surveys and

the sustainability of these systems.

scientific journals, the U.S. National Institute

l New economic challenges are emerging.

on Aging (NIA), with input from demographers,

Population aging will have dramatic effects

economists, and experts on aging, identified

on social entitlement programs, labor

nine emerging trends in global aging. Together,

supply, trade, and savings around the globe

these trends present a snapshot of challenges

and may demand new fiscal approaches to

and opportunities that clearly show why

accommodate a changing world.

population aging matters.


l The overall population is aging. For the first

time in history, and probably for the rest of

Some governments have begun to plan for the

human history, people age 65 and over will

long term, but most have not. The window of

outnumber children under age 5.

opportunity for reform is closing fast as the pace

l Life expectancy is increasing. Most

of population aging accelerates. While Europe

countries, including developing countries,

currently has four people of working age for

show a steady increase in longevity over

every older person, it will have only two workers

time, which raises the question of how much

per older person by 2050. In some countries

further life expectancy will increase.

the share of gross domestic product devoted to

l The number of oldest old is rising. People

social insurance for older people is expected to

age 85 and over are now the fastest growing

more than double in upcoming years. Countries

portion of many national populations.

therefore have only a few years to intensify

l Noncommunicable diseases are becoming a

efforts before demographic effects come to bear.

growing burden. Chronic noncommunicable

diseases are now the major cause of death

The chal enges may seem daunting, but a host

among older people in both more developed

of opportunities await us as wel . For instance,

and less developed countries.

countries that have begun to address issues of

l Some populations will shrink in the next

population aging can share their experiences.

few decades. While world population

There are exciting opportunities for economic

is aging at an unprecedented rate, the

expansion and cross-national col aboration as

total population in some countries is

wel , but we must act now or the costs of waiting—

simultaneously declining.

financial and social—wil be overwhelming.

o v e R v I e w — o U R A G I N G w o R l D


i n t r o d u c t i o n

The Cost of Waiting

Global.aging.is.a.success.story ..People.today.are.living.

longer.and.generally.healthier.lives ..This.represents.




of.years ..

. . . . w H y P o P U l A t I o N A G I N G m A t t e R S : A G l o B A l P e R S P e c t I v e


But sustained growth of the world’s older

population also presents chal enges. Population

aging now affects economic growth, formal and

informal social support systems, and the ability

of states and communities to provide resources

for older citizens. Nations must quickly recognize

the scope of the new demographic reality and

adjust current policies accordingly. Experience

has shown that such adjustments may be

painful—changes in retirement ages and medical

benefits, for example, are not widely popular. But

experience also shows that it is easier to address

European Commission and the Economic Policy

problems sooner rather than later, when the cost

Committee submitted a report to European

of waiting may become insurmountable.

Finance Ministers with new projections of

economic and budgetary costs for European

We can think about preparing for older age

Union (EU) member states. While Europe

on both an individual and societal level. On

currently has four people of working age for

an individual level, people need to focus on

every older citizen, it will have only two workers

preventive health and financial preparedness.

per older citizen by 2050 as a result of the baby

We know that many individuals approach older

boom generation retiring and life expectancy

age with little or no savings. A simple example

increasing. Given current policies, the pension,

illustrates the financial cost of waiting to save

health, and long-term care costs associated

and the value of a more farsighted perspective.

with an aging population will lead to significant

A 40-year-old worker who begins to save

increases in public spending in most member

$10,000 per year will accumulate $700,000 by

states over the next half century. Gross domestic

the time he is 70 years old, assuming an interest

product growth rates are projected to fall across

rate of 5 percent per year. If he had begun saving

the EU, and in the absence of policy changes, the

when he was 30 years old, he would only have

potential EU economic growth rate will be cut in

needed to save $5,500 per year to accumulate

half by 2030.

the same amount by age 70.

While some countries have initiated changes in

Calculating the cost of waiting at the national

retirement age that promise to ease the burden

level is much more complex, but similar

of public spending, the EU analysis emphasizes

reasoning applies. Just as for individuals, small

that such changes alone are inadequate. During

and gradual changes distributed over a longer

the next few years, countries must exploit a

time horizon are more easily absorbed by a

fast-closing window of opportunity to intensify

country than sudden and more substantial

reform before demographic effects come to bear.

actions required to meet a particular savings

The EU report notes that, similar to the impact

target over a shorter time horizon. Countries and

of an individual worker delaying savings, delays

international organizations are now developing

at the national level will increase the costs of

detailed models in recognition of looming costs

adjustment and shift an enormous economic

and the need for pension reforms to ensure

burden to the next generation of workers and

sustainable old-age support. In 2006, the


I N t R o D U c t I o N — t H e c o S t o F w A I t I N G





t r e n d

An Aging Population



children.have.outnumbered.older.people ..Very.soon.this.

wil .change ..For.the.first.time.in.history,.people.age.65.

and.over.wil .outnumber.children.under.age.5.(Figure.1) ..

This.trend.is.emerging.around.the.globe ..Today.almost.

500.mil ion.people.are.age.65.and.over,.accounting.for.

8.percent.of.the.world’s.population ..

Figure 1:

yoUNG cHIlDReN AND olDeR PeoPle AS A

PeRceNtAGe oF GloBAl PoPUlAtIoN







&.*% &.+% &.,% &.-% &..% '%%% '%&% '%'% '%(% '%)% '%*%

Source:.United.Nations.Department.of.Economic.and.Social.Affairs,.Population.Division .. W

Population Prospects. The 2004 Revision. .New.York:.United.Nations,.2005 .

. . . . w H y P o P U l A t I o N A G I N G m A t t e R S : A G l o B A l P e R S P e c t I v e By 2030 the world is likely to have 1 bil ion older

Figure :

people, accounting for 13 percent of the total


population. While today’s proportions of older

Number of years for population age + to increase

people typical y are highest in more developed

from % to 1%

countries, the most rapid increases in older


populations are occurring in the less developed

world. Between 2006 and 2030, the number of

;gVcXZ&-+*"&.-% &&*

older people in less developed countries is projected

to increase by 140 percent as compared to an

HlZYZc&-.%"&.,* -*

increase of 51 percent in more developed countries.

6jhigVa^V&.(-"'%&& ,(

Population aging is driven by declines in fertility

JH&.))"'%&( +.

and improvements in health and longevity. In

8VcVYV&.))"'%%. +*

more developed countries, declines in fertility

that began in the early 1900s have resulted in

=jc\Vgn&.)&"&..) *(

current fertility levels below the population

EdaVcY&.++"'%&( ),

replacement rate of two live births per woman.

Perhaps the most surprising demographic

J@&.(%"&.,* )*

development of the past 20 years has been the

HeV^c&.),"&..' )*

pace of fertility decline in many less developed

countries. In 2006, for example, the total fertility

?VeVc&.,%"&..+ '+

rate was at or below the replacement rate in

44 less developed countries.


Most of the more developed nations have had

6oZgWV^_Vc'%%%"'%)& )&

decades to adjust to this change in age structure

8]^aZ&..-"'%'* ',

(Figure.2) .. For example, it took more than a

century for France’s population age 65 and over

8]^cV'%%%"'%'+ '+

to increase from 7 to 14 percent of the total

?VbV^XV'%%-"'%(( '*

population. In contrast, many less developed

countries are experiencing rapid increases in the

Ijc^h^V'%%-"'%(' ')

number and percentage of older people, often

Hg^AVc`V'%%)"'%', '(

within a single generation. The same demographic

aging process that unfolded over more than a

I]V^aVcY'%%("'%'* ''

century in France wil occur in two decades in



Brazil. In response to this “compression of aging,”

institutions must adapt quickly to accommodate

8dadbW^V'%&,"'%(, '%

a new age structure. Some less developed nations



wil be forced to confront issues, such as social

support and the al ocation of resources across

generations, without the accompanying economic

Source:.Kinsel a.K,.Gist.Y .. Older Workers, Retirement, and

Pensions. A Comparative International Chartbook. .Washington,.

growth that characterized the experience of

DC:.U .S ..Census.Bureau.and.U .S ..National.Institute.on.Aging,.

aging societies in the West. In other words, some

1995;.and.U .S ..Census.Bureau ..International.Data.Base ..

Available.at:.http://www .census .gov/ipc/www/idbnew .html ..

countries may grow old before they grow rich.

Accessed.January.8,.2007 .

t R e N D 1 : A N A G I N G P o P U l A t I o N



t2rend Increasing Life Expectancy


life.expectancy.during.the.20th.century ..Life.expectancy.




developed.countries ..

l A shift from the predominance of infectious

and parasitic diseases to the growing impact

of noncommunicable diseases and chronic


The health transition shifts the human survival

curve so that the chances of surviving another