An ageing population is not just a developed country problem, says Steve Johnson in the FT. This mind-boggling graphic shows the speed at which countries went, or are expected to go, from 7 percent to 21 percent of their population aged over 65,
Just as emerging economies industrialised at speed, their populations are ageing at speed too. As countries become richer, two things happen; people live longer and they have fewer children.
Max Roser published a chart last week showing how quickly that decline in fertility happened in some of the emerging economies.
At the same time as birth rates declined, life expectancy also rose much more quickly in the emerging economies. By 2009, life expectancy in Turkey was less than 6 years behind the UK and Germany, while South Korea had caught up.
Source: Clio Infra via Our World in Data
UN forecasters expect both trends to continue. According to their projections, by the middle of this decade, the median age in the upper-middle-income countries will have caught up with that of the high-income countries. (For definitions, see pages 7-9 here.)
The upper-middle-income group contains countries which we currently think of as having young populations but the time taken for their median age to reach the early 40s is likely to be much shorter than for the developing economies.
A random selection of the countries the UN expects to have a higher median age than the United States by the middle of the century throws up some surprises.
The rates of increase for some of the Asian countries are rapid. South Korea’s rising life expectancy takes its median age past even Japan’s by 2050. The trajectories for countries like France and the UK look gentle by comparison. Iran and Brazil draw level by the middle of the century.
Earlier this year, Aron Strandberg produced this graphic showing the change in median ages in Europe since 1960 and the UN’s projections to 2060. Watch what happens to Iran, Thailand, South Korea and Brazil. (If it’s too fast for you, there is a version here which you can pause.)
These countries catch up with many of the developed economies and, in some cases, overtake them. It’s also interesting to watch what happens to the countries immediately adjacent to the EU.
They pretty much draw level with some of the European countries. By 2060, Turkey has the same median age as the UK and France while overtaking Norway and Sweden. The ongoing row over whether Turkey should be admitted into the EU surfaced during the UK’s Brexit debates last week. There are have been arguments for years about how European Turkey is. As time goes on, though, at least in terms of its age profile, Turkey is starting to look ever more like the other large EU countries.
In some of the northern European countries, such as the UK and Sweden, the rate of ageing has slowed down. The fall in the birthrate has stabilised and even risen slightly, one theory being that increasing gender equality may have halted the decline. Improvements in healthy life expectancy may reduce healthcare costs and enable the rise in workforce participation among the over 65s to continue. None of this is to say that the richer countries have solved the ageing problem. Healthcare and pension costs are expected to grow faster than the economy almost everywhere. But for the northern European countries, the steepest ageing of the population will probably occur over the next few years and is then set to level off.
Contrast this with the rapid rates of ageing elsewhere in the world. Some of the emerging economies will have a lot less time to prepare and will see their retirement costs outstrip their economic growth by some distance.
The World Economic Forum also predicts that, over the next decade or so, health expenditure in emerging economies will rise at about 3 times the rate in developed countries. The fiscal consequences of this could be severe.
I have been banging on for some time that ageing societies are not just a western phenomenon. Many of the emerging economies are ageing at a truly fascinating rate. It may even be that, because the process has been slower and started sooner in the advanced economies, we have had time to get used to it and the shock here may not be as severe. Whatever happens, though, global greying is changing our world and it is doing so at an astonishing speed.