Ageing population may slow global GDP but not per capita income
As the global population ages, concerns about the future of the economy are growing. By 2050, the number of people aged 65 and above is expected to double, reaching 1.6 billion. This shift in demographics has led to fears of a potential slowdown in economic growth. However, there is evidence to suggest that if advanced economies can maintain the health of their elderly populations, they may be able to turn the situation into an advantage.
Ageing populations might slow down GDP growth rates, but experts believe that per capita income, which matters most to people, is unlikely to be significantly affected. Technology and higher life expectancy levels could increase productivity in the working-age population, potentially offsetting losses from a shrinking labour force. Furthermore, the accumulated wealth of older generations could drive future investments.
Some countries are already demonstrating how this can be achieved. Japan, which has the world’s oldest population, is focusing on the health needs of older people and making labour markets more flexible to allow fit elderly individuals to continue working. Singapore has made it mandatory for companies to offer re-employment to workers when they reach the retirement age of 63, at least until the age of 68, and is investing in apartment complexes with integrated social and health facilities for elderly residents.
However, the implementation of policies to support ageing populations can be politically challenging. France recently approved a law increasing the retirement age from 62 to 64 years, which was met with large protests and demonstrations. Balancing the needs of the economy and the population will be crucial for governments as they navigate the challenges presented by an ageing society.
Ultimately, countries will need to adapt to the changing demographics and find ways to harness the potential of their older populations. This may involve investing in healthcare, education, and technology, as well as promoting greater participation of women and young people in the workforce. By embracing the opportunities presented by an ageing population, countries can ensure that old truly becomes gold.
