April 26, 2011
When economic pundits trade heated predictions about the massive economic shifts we see internationally, it is easy to forget the subtleties that shade their forecasts. One such shadow overhanging any intelligent debate about our global economic future is global age demographics, according to Harvard Professor Richard Cooper.
Professor Cooper presented a thorough analysis of future global population dynamics at a luncheon hosted by the Boston Security Analysts Society on April 12, advocating a greater emphasis on age demographics in economic forecasting. “This is an area where economists in particular have not paid enough attention,” Cooper warned. Huge upcoming population shifts are unevenly distributed around the world and must be examined regionally. Cooper concluded that United States faces a far less worrisome future than most of its European and East Asian trading partners.
The age crisis
All over the industrialized world, life expectancies have dramatically increased, thanks in part to medical advances and changing lifestyles. In the US, life expectancy has increased a year per decade since Social Security’s introduction in 1935. Other countries have seen similar improvements, with Japan currently boasting the highest life expectancy in the world. As wonderful an achievement as this is, Cooper is right to draw the attention of economists to the darker side of the phenomenon: aging populations.
In many European and some Asian countries, there is a growing sense of foreboding about the future. Not only are their populations expected to decline overall, but the compositions of these populations are expected to change dramatically. In Japan, the median age is expected to rise from 44.6 to 54.1 between 2010 and 2040, while in Germany and Italy the median age is expected to rise from about 44 years to around 50 years over the same period. Half the population of Europe and over half the population of Japan will be over the age of 50 at that point. Things aren’t much better in some of the BRICs.
China and Russia are expected to see the most challenging rises in median age over the next few decades. China will see its median age go from 35.2 to 47.1 between 2010 and 2040, while in Russia it will go from 38.5 to 47. India and Brazil will see their populations reach a median age more in-line with the current American median age, which is only expected to grow by about 2 years.
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