January 30, 2014

Attitudes about Aging: A Global Perspective

Chapter 2. Aging in the U.S. and Other Countries, 2010 to 2050

Aging 13Although the population in the U.S. is getting older and growing more slowly than in the past, the demographic future for the U.S. is robust in comparison with other countries. In particular, the U.S. population is projected to grow faster and age slower than the populations of its major economic partners in Europe and Asia. These demographic trends may enhance future opportunities for the U.S. in the global economy.1

Population Change: India and Nigeria Lead the Way

The U.S., with 312 million residents, was the third most populous country in the world in 2010. China was the leader with 1.4 billion residents, and India was close behind with 1.2 billion. Only one other country—Indonesia—had more than 200 million residents in 2010. Six countries—Brazil, Mexico, Russia, Pakistan, Japan and Nigeria—had populations of 100 million to 200 million in 2010.

India, it is projected, will secure global demographic primacy by 2050. The population of India is expected to increase by more than 400 million from 2010 to 2050, to 1.6 billion. Meanwhile, the population of China may increase by only 25 million, remaining at about 1.4 billion. The U.S. is projected to add 89 million residents by 2050. However, the U.S. is likely to be displaced by Nigeria as the third most populous country. In 2050, India alone may be home to nearly as many people as China and the U.S. combined.

Aging 14Four other countries—Indonesia, Pakistan, Nigeria and Kenya—are expected to add at least 50 million people each to their populations from 2010 to 2050. Nigeria stands out in this list because the increase in its population—280 million—is exceeded only by India, a country with a much larger base.2 The populations of several major countries—Russia, Germany, Italy and Japan—are expected to shrink.

In percentage terms, the growth in the U.S. population (28%) should exceed the growth in two of its major Latin American partners—Argentina (26%) and Brazil (18%). Among other countries where populations are on the rise, the U.S. is likely to outpace Britain, France, Spain, China, South Korea and South Africa. With populations in Russia, Germany, Italy and Japan on the decline, the U.S. population is expected to increase in size relative to several of its major economic partners.

The most dramatic growth in population is projected to be in Nigeria (176%) and Kenya (138%). Nigeria is likely to move from being the seventh most populous country in 2010 to the third most populous by 2050. The populations of several other countries also are expected to grow at a faster rate than the U.S. population: Pakistan (57%), India (34%), Indonesia (34%), Israel (60%), Egypt (56%), Iran (35%), Turkey (31%), and Mexico (32%).

Immigration and Population Change

Population growth in the U.S. is robust in comparison with European countries and also in comparison with other economic powers such as Brazil, Japan, China and South Korea. The principal driver of U.S. population growth is immigration. The U.S. is home to more immigrants than any other country—42.8 million in 2010, compared with 12.3 million in Russia, the second largest. The share of immigrants in the U.S. population (13.8%) is the third highest of all countries featured in this report, behind only Israel and Spain.3

Immigrants have added to the U.S. population generally and to the population of women in their childbearing ages. They also have brought relatively higher fertility rates with them.4 The importance of these factors has increased over time as fertility rates for native-born women in the U.S. have fallen steadily. The Pew Research Center estimates that, from 1960 to 2005, immigrants and their descendants accounted for 51% of the increase in the U.S. population. Looking ahead, from 2005 to 2050, immigrants and their descendants are projected to contribute 82% of the total increase in the U.S. population.5 Without immigration, U.S. population growth from 2005 to 2050 would be only 8.5%, more on par with that of European nations.6

Given the role immigration can play in sustaining growing populations, the question that arises is whether aging countries could offset the process through immigration. The realistic answer, it turns out, is no. A UN report that examined the issue finds that Japan, South Korea and countries in Europe would have to raise their immigration levels multiple times beyond current levels just to maintain a constant total population.7 For example, to prevent their populations from decreasing, Germany would have to roughly double its annual intake of immigrants between now and 2050 and Russia would have to quadruple its annual inflow.

Because immigrants are not immune to getting older, preventing population aging is even harder. The UN report also finds that immigration rates would have to increase by a factor of 46 in Russia and by a factor of 18 in Germany to prevent old-age dependency ratios from rising through 2050.

Even in the U.S., keeping the old-age dependency ratio constant through 2050 would call for immigration inflows that are 15 times the present rate.

The Graying of Countries

Aging of societies seems inevitable. Regardless of their initial size or the rate of growth in their populations, all countries included in this study are projected to experience a rise in median age from 2010 to 2050. Also, the share of the population ages 65 and older is expected to increase in all countries.

Median Age: South Korea and Japan Projected to be the Oldest by 2050

Aging 15Amid this “epidemic” of aging, the U.S. is projected to get relatively younger by virtue of being among those countries that are aging the slowest. The projected increase in the median age in the U.S., from 37 in 2010 to 41 in 2050, is matched in its moderation only by Britain, France, Russia and Nigeria. The other countries in Europe are likely to age faster than the U.S. Spain leads the way, with its median age increasing from 40 in 2010 to 50 in 2050. Generally speaking, European populations are older than the U.S. today, and that gap should stretch further between 2010 and 2050.

Sharp increases are expected in the median age in Latin American countries. Mexico, Brazil and Argentina populations are currently seven to 11 years younger than the U.S. However, in 2050, the median age in Brazil should be 44, three years older than in the U.S. Mexico may also turn older than the U.S. with a median age of 42, and Argentina will nearly catch up to the U.S.

Countries in Asia and the Middle East are also turning gray rapidly. The median age should increase by 16 years in South Korea, from 38 in 2010 to 53 in 2050.8 Double-digit increases are also expected in India, China, Indonesia, Pakistan, Iran, Egypt and Turkey. The median age in China, Iran and Turkey is younger than the U.S. at the moment but should become older by 2050.

Japan currently has the oldest population in the world, and the median age there is projected to increase from 45 in 2010 to 53 in 2050. South Korea is expected to catch up to Japan by 2050 as its median age also increases to 53 by mid-century. By then, the median age in Germany (51), Italy (50) and Spain (50) will not be far behind. China’s population, with a median age of 46 in 2050, is expected to be older than those in Russia, France and Britain by that date.

There are only a few instances of moderate aging. Israel is expected to remain relatively young, with its median age rising from 30 in 2010 to 36 in 2050. Nigeria and Kenya will remain even younger. The median age in these countries in 2010 was only 18 and 19, respectively. By 2050, it should increase to 21 in Nigeria and 25 in Kenya. Thus, people in these two populous countries in Africa will remain half the age as those in the oldest countries included in this study.

Proportion of People Ages 65 and Older Increases in All Countries

Aging 16The rapid increases in median age are a reflection of the rising proportions of seniors (65 and older) in the populations of all countries. In the U.S., the share of seniors is expected to increase from 13.1% in 2010 to 21.4% in 2050. But it may triple in Mexico, from 6.0% to 20.2%, and in Brazil, from 6.9% to 22.5%. The share almost doubles in Argentina, rising to 19.4% in 2050.

A doubling to tripling of the share of seniors is also expected in the Middle East and Asia. The most notable gains are in China, from 8.3% in 2010 to 23.9% in 2050, Iran (5.2% to 21.5%), and South Korea (11.1% to 34.9%). Japan, where the share is already quite high, is projected to experience an increase from 23.0% in 2010 to 36.5% in 2050.

European countries that are likely to track the Japanese experience include Germany, Italy and Spain. They, too, will likely find that about one-third of their population is ages 65 and older in 2050.

Nigeria, Kenya and South Africa are expected to retain the distinction of having the lowest proportions of people 65 and older in their populations. In 2050, only 3.8% of the population in Nigeria, 6.3% of the population in Kenya and 10.5% of the population in South Africa should be ages 65 and older.

Proportion of Children Younger than 15 Decreases in Most Countries

Aging 17The population segments of children younger than 15 are projected to decrease in almost all countries. Indeed, most countries should experience a crossover between the share of their population that is 65 and older and the share that is younger than 15. In the U.S., for example, 13.1% of the population was 65 and older in 2010, and that was less than the 19.8% share that was younger than 15. In 2050, however, 21.4% of the U.S. population is projected to be 65 and older, greater than the 18.2% of the population that will be younger than 15.

Other countries that are projected to have more seniors than young children in their populations in 2050 include Brazil, Mexico, Argentina, Iran, Turkey, Russia, Britain, France, China and South Korea. Germany, Italy, Spain and Japan have already reached this milestone, while Egypt, Israel and India may be approaching the tipping point by 2050. However, the population of children younger than 15 is expected to continue to outnumber the population of seniors by large magnitudes in Pakistan, South Africa, Kenya and Nigeria.

Most Countries Projected to Have Relatively More Dependents in the Future

Aging 18The principal economic implication of an aging population is that it potentially reduces the share of the population that is in the prime of its working life. This can slow overall economic growth, absent a compensating rise in productivity.9 At the same time, the share of the population that depends on those at work may increase. The “dependent” population includes most seniors who, in addition to their savings, depend on family transfers, private pensions and social insurance. Children younger than 15, are, of course, principally dependent on their parents.

The potential burden on the working-age population to provide for the dependent population is measured by the dependency ratio. The old-age dependency ratio is defined as the number of people ages 65 and older per 100 people of working age (ages 15 to 64). The child dependency ratio is the number of children younger than 15 per 100 people of working age. Finally, the total dependency ratio is the overall number of dependents (people younger than 15 or older than 64) per 100 people of working age.10

Aging 19The total dependency ratio is expected to increase in most countries in the years ahead. This transformation will be felt most strongly in Germany, Italy, Spain, Japan and South Korea. In 2050, the dependency ratio in these countries is expected to range from 83 in Germany to 96 in Japan. This means that these countries will have almost as many dependents as working-age people in 2050.

Countries poised to experience potentially more favorable demographic change include Egypt, India, Pakistan, Nigeria, Kenya and South Africa. In these countries the working-age population is projected to increase in size relative to the youth and senior populations combined by 2050. Thus, relatively more resources may be freed up for economic development.

The most significant declines in the dependency ratio are expected to be in Pakistan, Nigeria and Kenya. These three countries currently have high levels of dependency ratios because of their significantly large populations of children. In the future, those children will stream into the labor markets in these countries in large numbers.

Increases in old-age dependency ratios, or aging, explain why total dependency ratios are generally on the rise. In the U.S., for example, the total number of dependents per 100 working-age people is expected to increase by 17 from 2010 to 2050, and this is entirely due to the increase in the number of seniors.

Aging 20With the exception of Nigeria and Kenya, all countries in this study are set to experience large, proportional increases in the old-age dependency ratio. For example, the number of seniors per 100 working-age people in Mexico and Brazil are projected to more than triple from 2010 to 2050. Growth of this magnitude or more is also expected in Iran, Turkey, China, Indonesia and South Korea. Some countries that are already among the oldest in the world—Germany, Italy, Spain and Japan—may find that their old-age dependency ratio has doubled by 2050.

In several countries, expected decreases in the child dependency ratios will more than compensate for increases in the old-age dependency ratios. In India, for example, the number of seniors per 100 working-age people is projected to increase from 8 in 2010 to 19 in 2050, but the total dependency ratio will fall from 54 to 48. That is because the number of children younger than 15 per 100 working-age people in India is expected to fall from 47 to 29. Similar patterns are projected for Egypt, Pakistan, Nigeria, Kenya and South Africa.

Is Demography Economic Destiny?

The growth in a country’s population and changes in its age composition are often linked to the economic prospects for that country. A workforce that is growing in size relative to the youth and elderly populations sets the stage for more rapid economic growth. However, that demographic dividend, as it is generally described, dissipates with time because people age up and out of the workforce. That in turn sets the stage for slower economic growth.

Are these economic outcomes inevitable? Research demonstrates, for example, that the demographic dividend played a significant role in the emergence of Asia’s economic tigers in the latter half of the 20th century.11 But the dividend does not appear to be automatic because historically not all countries are observed to benefit in like fashion from demographic transitions.

It has been noted by researchers that countries that benefited the most from demographic transitions also had complementary forces at work. These include good governance; high saving rates; investments in infrastructure, schooling and public health; policies promoting gender equity; and openness to trade and foreign investments.12 The implication is that countries currently on the cusp of the demographic dividend—India, Pakistan, Egypt, Nigeria and Kenya—perhaps cannot assume that economic benefits will automatically flow to them. India, for example, ranks very low on indicators of nutrition, health and education for its youth population and has regressed on these fronts in recent years.13

By the same token, it is not inevitable that the aging of a country’s population portends gloom for its economic prospects. Several potential antidotes can address a shrinking workforce. One is to raise productivity, and that may happen with more investment in capital and with innovations that emerge in response to the growing scarcity of labor. It is also possible to boost the size of the workforce through immigration.

People may also choose to work longer in aging countries, especially since life expectancy is increasing and health outcomes for older people are improving.14 In the U.S., for example, labor force participation among those 65 and older has risen from a low of 10.8% in 1985 to 18.7% in 2013. In 1948, the first year for which data are available, the labor force participation rate for people 65 and older was 27.0%.15

  1. numoffset=”17″ The 23 countries covered in this chapter include nine of the 10 most populous countries in the world in 2010. In order of population, they are China, India, U.S., Indonesia, Brazil, Pakistan, Nigeria, Russia and Japan (Bangladesh, which ranks eighth, is not included). The other countries, except for Israel, were among the 35 most populous countries in 2010.
  2. Other countries whose populations are expected to increase by more than 50 million but that are not a part of the analysis in this report are Ethiopia, Democratic Republic of the Congo, Tanzania, Uganda, Philippines, Niger and Bangladesh.
  3. Immigration estimates are from the World Bank (http://data.worldbank.org/indicator/SM.POP.TOTL.ZS and World Bank, 2011).
  4. In 2010, there were 87.8 births per 1,000 immigrant women ages 15 to 44 in the U.S. compared with 58.9 births per 1,000 native-born women of the same age group (Livingston and Cohn, 2012).
  5. Immigrants and their descendants are projected to account for all of the growth in the populations of children (17 and younger) and working-age adults (ages 18 to 64) in the U.S. from 2005 to 2050 (Passel and Cohn, 2008).
  6. See Passel and Cohn (2008). Australia and Canada are notable examples of developed economies that have immigration policies designed to sustain population growth. Immigrants accounted for 21% of the population in each country in 2010. According to the UN projections, Australia’s population will increase by 51% from 2010 to 2050 and Canada’s by 33%.
  7. United Nations (2001).
  8. The difference of 16 years is computed from unrounded figures for the median age.
  9. Gordon (2012), Bloom, Canning and Fink (2011), and Freeman (2006) are among those who examine this issue. Although overall economic growth may slow, per capita output may not be affected. Freeman (2006) argues that per capita output, not total output, is the more appropriate metric for economic policy.
  10. Alternative measures of dependency ratios define the working-age population to be ages 20 to either 64 or 69.
  11. Mason (2005).
  12. Bloom, Canning and Sevilla (2003) and Gribble and Bremner (December 2012 and September 2012).
  13. Kundu (2012).
  14. Freeman (2006), Gordon (2012), Bloom, Canning and Fink (2011) and Sanderson and Scherbov (2008).
  15. U.S. Bureau of Labor Statistics.