Last July, when I turned 70, I wrote about my own aging. What happens as a large group of people age?
Let’s look at the start of the process of demographic change, when birthrates fall. This causes a decrease in the number of young people so there are fewer dependents. With more people in the working age range and not many old people yet, the group can prosper; this is the “demographic dividend”. Many regions have experienced this, notably in Africa and Asia. A European example will serve us better, however, since the information is more complete.
The Republic of Ireland is strongly Roman Catholic. In 1935 the government made contraception illegal, except for fertility awareness methods. Their Total Fertility Rate (TFR—the average number of children a woman will bear during her lifetime) climbed to 4. Despite its strong religious heritage, the country legalized contraception in 1979. Then TFR gradually dropped to about 2—below replacement and in the current range of other European countries. During the 1990s Ireland enjoyed a period of economic growth.
What is going to happen to countries as their populations age? Will it be as much of an detriment to economies as the demographic dividend was a benefit?
Never before have whole countries had their populations shrink voluntarily so markedly as is happening now. Perhaps the closest western civilization encountered was in Europe during the mid-14th century—the Black Death. This pandemic is estimated to have killed half of all Europeans. Indeed, the popular press has drawn the analogy of population shrinkage to a plague.
Half of the world’s countries have a TFR less than replacement—less than 2.1—which means they will decrease in population. This shrinkage has been slow at first, but birthrates seem to continue dropping. What some people fear is the change in the age structure. There will be an advantage because there will be fewer dependent young people. At the same time, people are living significantly longer than previously, so the number of older people will increase, increasing the number of dependents for each working person.
How can countries deal with this change in demographics? Will this transformation in age structure spell economic disaster? Some writers think so.
Perhaps the best glimpse into the future is the example of Japan, where one quarter of its population is 65 years old or older. It has the very low TFR of 1.4, little immigration and its population is shrinking at about 0.2 % annually. Furthermore, because of good diet and fine medical care, the life expectancy for a child born now is 83 years—about the best in the world.
How has the graying of its population affected the Japanese people? One trivia is the sale of diapers. They are unique in the world because sales of baby diapers will soon be by equaled by sales of adult diapers.
Birth control pills were not available in Japan until 1999. For many years people relied on just condoms and abortion to plan their families. Nevertheless, the TFR dropped below 2.0 in 1975. The sociological changes that have catalyzed this low reproductive rate include the changing role of women. Instead of staying home, now many women are well educated, work outside the home and postpone marriage until they are older.
Japan has avoided economic disaster despite the aging of its people, although they did suffer from the 2008 recession. The average retirement age is close to 70—since people are healthier, they can work longer. Because of the smaller number of children, there are still plenty of workers to support each dependent person.
Many European countries also have aging populations, but they use a different method to deal with the decreasing number of native young, low-skilled workers. They have “guest worker” programs, which allow people to immigrate from poorer countries to do work that the locals don’t want to perform.
Demographics are changing in many countries. In cultures that are aging, some occupations and businesses will have decreased demand, including obstetricians, childcare and teachers. Other occupations and businesses will increase—geriatricians, retirement communities and physical therapists.
The “population explosion” is not over. We are still growing by almost 80 million people yearly—mainly in poor, southern countries. Many people have enjoyed the demographic dividend, but the time has come to adjust to a new reality. Since growth cannot go on forever, it is absolutely necessary to reach a stable population, which means a period of population aging.
© Richard Grossman MD, 2014