Consequences of a graying world

W hile attention is focused on efforts to make the world go green, the world is also changing dramatically because it is going gray. People over age 65 are starting to outnumber those under 16 in many countries. By 2040, one in four Europeans will be more than 65 years old, up from one in eight in 1990. The Chinese population is aging even more rapidly, to the extent that its total population will start to decline in the early 2030s.

Numerous studies have estimated the probable impact of population aging, from the potentially devastating effects on an unprepared welfare state to shortages of blood for transfusions. Pension provisions will be stretched to the limit. The traditional model of

the working young paying for the retired old will not work if the latter group is twice the size of the former.

But a 2006 survey of 20 countries and territories by banking giant HSBC revealed that, while 43% of respondents feel they should fund their own retirement, 30% expect to be supported by local or national government. Final salary pension plans are already disappearing, and governments will have to search hard for new ways to pay for their aging citizens.

In addition, as the population ages, healthcare costs will rise. By 2050, half of all age-related social expenditure will be taken up by health and long-term care in countries of the Organisation for Economic Cooperation and Development.

But we have a point here to celebrate as we’re living longer. In 1901, life expectancy in Britain for men was 45 years and for women 49. Today most Britons expect to reach their 80s, at least. In Britain in 2004, there were about 9,000 people older than 100.

The options for mitigating the effects of population aging are limited and complex. The main possibilities are welfare reform, increasing immigration, or raising fertility rates. All three strategies have massive financial and political implications.

Many governments shy away from taking the drastic steps needed in these areas, tending to be more concerned with the next election than with the next generation. The option least tangled up with political will is to introduce policies aimed at encouraging

people to have more children — in other words, reducing the social, economic, and biological barriers to childbirth.

Countries that have “family-friendly” policies — particularly those that help mothers to raise children and work — have managed to maintain or even slightly raise their fertility rates. Such policies include tax incentives for families with more than one child, flexible working options, and maternity and paternity leave. France now has the second-highest fertility rate in Europe, due in part to the introduction of pro-natalist policies at the very earliest indication of population decline.

As a larger percentage of the population falls into the 60-plus category, governments will not be able to ignore the graying of society. On pensions, healthcare, and other issues, retirees will have a louder voice as their numbers increase, and they will use it. They did in the last British election. More than twice as many over-65s voted as did 18-24 year-olds. Elected officials know that if they ignore these voters, they risk being forced into early retirement themselves at the next polls. — The Christian Science Monitor