28 June 2017

The Demographic Timebomb: A Rapidly Aging Population


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Editor's Note

At Stratfor, we often look at how demographic shifts impact the economic outlook and geopolitical imperatives of countries around the world. Here, our partners at Visual Capitalist do the same as they explore the economic challenges created by a rapidly aging global population.

With record-high amounts of student debt, questionable job prospects, and too much avocado toast in their bellies, many millennials already feel like they are getting the short end of the stick.

But here’s another economic headwind they face as they are coming of age: the percentage of the global population that is 65 or older will double from 10% to 20% by 2050.

As millennials enter their peak earning years, there will be 1.6 billion elderly people on the planet.

SOMEONE HAS TO PAY THE BILL

Today’s infographic comes to us from Aperion Care, and it highlights how demographics are shifting as well as the economic challenges of a rapidly aging global population.

With an older population that works less, support and dependency ratios get out of whack.

After all, countries already spend trillions of dollars each year on healthcare and social security. These systems were designed a long time ago, and were not setup to work with so few people paying into the programs.

WHICH COUNTRIES FACE HEADWINDS?

While most countries face similar obstacles with aging populations, for some the problem is more severe.

The Potential Support Ratio (PSR), a measure of amount of working people (15-64) for each person over 65+ in age, is anticipated to fall below 5.0 in countries like Japan, Italy, Germany, Canada, France, and the United Kingdom. These countries will all have significant portions of their populations (>30%) made up of elderly people by 2050.

The United States sits in a slightly better situation with 27.9% of its population expected to hit 65 or higher by the same year – however, this is still analogous to modern-day Germany (which sits at 27.6%), a country that is already dealing with big demographic issues.

Here’s one other look, from our previous Chart of the Week on dropping fertility rates and global aging:


Will millennials be able to diffuse the demographic timebomb, or will an aging population be the final straw? 

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