Ageing population: a problem?

Have you heard of the ‘ageing population problem’? Why is it that people living longer is not a good thing? Declaring there is an ‘ageing population problem’ has become a convenient excuse for governments with unbalanced budgets, together with big business push a population growth agenda. This page looks at the real issues underpinning an ‘ageing population’. The reality is:

an ageing population unquestionably not a real problem.

This page questions whether an ageing population is a problem at all, or alternatively, used as a rational for positions and policies to deliver outcomes for politicians and multinationals, at the expense of the rest of the population.

This document outlines how an ageing population provides economic benefits that counter the claimed negatives. The reality is that only real ‘benefit’ of strategies reduce ‘population ageing’ is to satisfy those desiring population growth.

  • Getting Past The Label
    • Two diverse reasons for an ‘ageing population’
    • Is ageing a problem, Or all in a name?
  • Economic Problems From Living Longer
  • Economic Problems From A Lower Birth Rate
  • Getting Past A Problem? Really?
  • The Vested Interests, and why hide their agenda?
  • Solutions? Or Worse Problems?
    • Possibilities
    • Stop People Getting Older?
    • Reduce the number of older people
    • Increase the number of younger people
  • Aging Population: The Fake ‘Problems’:
    • Low Workforce Participation (false).
    • Low Population Growth Lowers Participation(false)
    • Ever increasing pension schemes (false).
    • Increasing Medical Expenses? (false)
  • The Real Problems (Non-Ageing Population)
    • Workforce Payback
    • Adjusting Society
    • Healthcare costs
  • Conclusion.

Ageing A Problem? Or all in a name?

Often, a debate is very much all in getting the best name for your side of the argument. The label ‘ageing population problem’ includes the word problem saving justifying just why an ageing population is a problem.

Further, the word ‘ageing’ is also negative. Smoking cigarettes and other factors can ‘age’ people. The negative of ‘ageing’ is all around how fast we age, but in this economic context, people ageing slower, and thus living longer, is part of the problem. The ageing population as described by the economists is really ‘not ageing fast enough!’. This is because a term which can has negative associations in one context is being appropriated to describe increase in average age.

The entire label ‘ageing population problem’ is intended to convey that the an increase in average age is a problem that needs no further explanation. Despite that, the goal of this page is to question and look for further explanation.

Two diverse reasons for an ‘ageing population’

There are two distinct factors that can increase the average age of a population:

  1. longer average life expectancy
    • lower infant mortality and less premature deaths
    • increasing life expectancy: people ‘ageing’ more gradually
  2. lower ratio of children in society due to:
    • a lower birth rate
    • unbalanced emigration/immigration

These two issues are actually linked. Either can occur without the other. It is true that in many western societies there has been a simultaneous increase in life expectancy and a reduction of birth rates, but at the same time there has also been an increase in motor vehicle ownership. This does not make them related issues.

Further, just as returning to a higher birth rate will not decrease pollution from motor vehicles, a higher birth rate does not automatically impact how long people live, or more importantly, does not solve any economic problems that could result from people living longer.

ebotThere are potential economic problems from , and it becomes clear that any economic challenges that could arise from There is no cause effect or other relationship that means these two factors are linked. Surely longer life expectancy is considered sufficiently desirable that no one would suggest this factor could be negative. The average age of people in society can increase due to this factor alone, yet it is hard to see how this alone could be seen as a problem. However, the implication of ‘ageing population problem’ is that any increase in average age of society is a problem.

This leaves the second factor: The ratio of children. Arguing that ratio of children is too low better than arguing for more premature deaths, or people to live shorter lives. But what is the ideal ratio of children, and why is the current ration too low?

The lower ratio of children in society is a least not contradictory. other facThis leaves the lower ratio of children as being the grievance. adjusting the birth rate or the immigration balance as the only mechanisms to influence population ageing.

Birth Rates & ‘Ageing Population’

On factor is the due to improved health care, people are living longer. Generally, those considering the ‘aging population’ a problem are not suggesting to stop people living longer, just that there needs to be more young people.

The key factor that is ‘blamed’ for the ageing population is reduced population growth. Less births, less young people.

Population growth is slowing due to smaller families, as widely discussed elsewhere on this blog. In a rapidly increasing population, each new generation has a greater population than the previous generation.  In this expanding population, the older generation is much smaller than the younger, and with a small number of the older generation, the average age of the entire population is much lower. Contrast this todays’  relatively stable population, and the generations are of a similar size, so without the ever increasing numbers of younger people, the average age is older.

Immigration and Ageing Population

,  but rather the argument is that to increase immigration, or move back to having more children and return to a rapidly expanding global population.

What is the resulting  ‘problem’?

The theory is that people reach an age where they can no longer work, and therefore can no longer contribute towards the production of the wealth of the society. The wealth produced by ‘productive’ people, ‘breadwinners’, must be shared by all: wealth producers (breadwinners) and those who can no longer produce wealth(dependants) alike. In economic terminology,  the “Gross Domestic Product” or economy is produced only by those “breadwinners” in the workforce.  GDP per capita, one measure of the wealth of society, is determined by dividing the  “Gross Domesitc Product” by the number of people in the population.  Therefore greater ratio of people who do not produce wealth, the greater the burden on those producing the wealth to produce a high level for the entire population.

This is of course all based on the assumption that the elderly have a much greater ratio of “dependants” than the rest of society.

Immigration is at best a questionable solution.

Every country benefits from the highest possible GDP per capita, and suffers hardship when GPD per capita falls, not just countries seeking to address this ‘aging population problem’.   To increase the ratio of  ‘working population’ through immigration, a country must have an immigrant intake with selected to maximise the ratio ‘of working age’ among immigrants.  The effect of such a policy is to selectively extract ‘breadwinners’ these people from other countries.  Immigration does not change the global ration of old to young, or the global ratio of “breadwinners” to dependants, immigration only changes who lives where.   One countries gain in this equation is another countries loss.

Since it is the richer countries who are in the best position to attract immigrants,  this solution is generally about the richer countries trying to improve their ratio of “breadwinners” by luring these breadwinners from poorer countries.  While these immigrant “breadwinners” may send part of their income back home to support dependants back home, all their income still counts as GDP for their new country and they boost taxation revenue of the new country.  From a government point of view, such a strategy helps rich countries and is a problem for poorer countries.

Returning to “growth age” birth rates as a solution?

The growth age featured larger families, with a far greater ratio of younger people. Whereas the trend of todays more stable population yields a similar number of people in each age group, the peak growth age had far more children and far fewer elderly. ‘Aging population’ solved?  Except that the proposed problem, less dependants, is not solved at all.  It turns out that children are also dependants!  And high birth rates mean far more of them.  In fact, with children now spending longer in education, and then the higher rates of unemployment among young people, the reality is higher birth rates does not reduce dependants, or the cost of dependants, nor increase the ratio of breadwinners at all.  Reality is there are far more ‘self funding retirees’ than self funded children.  The only impact is that the dependants are younger, and perhaps we feel happier about young people being a cost to society?

Conclusion.

There entire ‘ageing population’ problem, is a great argument to justify plans and actions by government where the real motivations are less attractive to promote.  I will follow with more posts on these real motivations.

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