Another demographic first!

Marcus Roberts
April 8, 2016
Reproduced with Permission
Demography is Destiny

There are a couple of demographic firsts that we will live through in the next few years. As we mentioned at the end of last year, China's population is set to be overtaken by India's very soon. Whn that happens it will probably be the first time in recorded history that China will no longer the largest nation in the world. According to the US Census Bureau, another demographic milestone is about to be reached: sometime before the end of this decade the number of human beings aged 65 years and older will exceed those aged under 5 for the first time ever. Its newest report, entitled "An Aging World: 2015" states that after these two demographic groups cross "before 2020" then they will continue to grow apart so that:

"These two age groups will then continue to grow in opposite directions…By 2050, the proportion of the population 65 and older (15.6 percent) will be more than double that of children under age 5 (7.2 percent)...This unique demographic phenomenon of the 'crossing' is unprecedented."

Interestingly, this is not primarily due to our increased life-expectancies. Instead, the "main demographic driving force behind population aging is declining fertility rates". Across the world the Total Fertility Rate (TFR) has fallen to or below the level of 2.1 children per woman to achieve population stability. The only region not conforming to this trend is Africa. Europe's TFR is 1.6.

This is reflected in the list of the oldest individual nations. 22 out of the top 25 oldest countries are in Europe. Japan is first with 26.6% of its population over the age of 65, Germany is second with 21.5%, Italy is third with 21.2% and Greece is fourth with 20.5%. The other two countries not in Europe in the top 25 are Canada and Puerto Rico (although the latter is not really a country as far as I am aware…) At the other end of the scale, the youngest countries are in the Persian Gulf: both Qatar and the United Arab Emirates have less than 1% of their respective populations over the age of 65.

The world in 2050 will be very different demographically. There will be many more old people, about the same number of young people and some growth in the number of working-aged people. As the Census Bureau explains:

"In contrast to the 150 percent expansion of the population aged 65 and over in the next 35 years, the youth population (under age 20) is projected to remain almost flat, 2.5 billion in 2015 and 2.6 billion in 2050...Over the same period, the working-age population (aged 20 to 64) will increase only moderately, 25.6 percent. The working-age population share of total population will shrink slightly in the decades to come, largely due to the impact of low fertility and increasing life expectancy."

The big question that arises is: who is going to support the larger numbers of older people? Proportionally fewer workers means that it is harder for the state to raise enough in taxes to pay for healthcare and pensions. On the other hand, the family is also unlikely to be able to provide the support that the elderly could have turned to in previous generations:

"'Traditionally, children are the mainstay of old age support, especially when only one parent is still living,' says this sidebar [contained within the US Census Bureau's Report, entitled 'Support of Childless Older people in an Aging Europe']authored by researcher Martina Brandt at Dortmund University and Christian Deindl at University of Cologne. 'However, people are not only living longer but also having fewer children, with rising childlessness among the older people. Thus new challenges arise: Who will provide help and care to the childless older people? On what support networks can they rely? And, what role does the state play in care provision?'"

I will tell you one thing, it is certainly an interesting time to be writing about demography!