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Global population aging trends and issues

Population aging, as a global issue, has become increasingly important in these few decades. Regarding to this issue, the U.S. State Department and the National Institute on Aging (NIA) has hosted a report named “Why Population Aging Matters: A Global Perspective” in March 15, 2007. This report covered nine trends related to population aging which present a snapshot of challenges and opportunities showing why population aging matters. In which the first five trends describe the global demographic changes in recent years and the last four trends show the challenges and opportunities that caused by population aging. We appreciate the effort of the authors in raising global awareness. Every report, however, have strengthens and limitations. By arguing with some points mentioned in the report, we try to perfect it by replenishing it with more information.

Methodology

Aimed at raising public awareness about global aging problems, encouraging more cross-nation scientific research and international studies and stimulating biochemical, economic, behavioral and political dialogues, this report used plenty of statistics to show the impacts of population aging on nations. To show the whole picture of the global issue, the researchers did not conduct interviews and solicit the statistics by themselves; rather, they gathered the existing data from different part of the world. Generally, these data are from the United Nations, US Census Bureau, and the Statistical Office of the European Communities as well as some regional surveys.

Summary of the report

Trend 1 – The overall population is aging

According to the research done by United nations Department of Economic and Social Affairs, the global percentage of young children is decreasing while the percentage of older people increases sharply especially in the coming decades. In around 2017, older people will outnumber young children in estimation. In 2006, almost 500 million people are older people, who share 8% of global population, and it is expected that the number will increase to 1 billion in 2030. Besides, the speed of population aging is higher in developing countries than in developed countries. For example, France, as a developed country, has taken 115years for the proportion of the older people to increase 7%. However, in some developing countries like Singapore, 19 years is enough to reach the same rate. Population aging is a global trend in which the degree of development of the countries affects the rate of it.

Trend 2 – Life expectancy is increasing

Change in Life expectancy reflects a health transition which is characterized by many changes including a shift from high to low fertility, a steady increase in life expectancy at birth and at older ages and a shift from the predominance of infectious and parasitic diseases to the growing impact of non-communicable diseases and chronic conditions. Some scientific research shows that the human survival curve in both women and men shifted upward. The life expectancy at birth has increased from 45years in 1950 to more than 79 years today.

It implies that the life expectancy increases in every single age and deaths are highly concentrated at older ages.

Trend 3 – The number of oldest old is rising

People aged 85 or about are defined as the oldest old. Currently, the oldest old constitutes 7% of the world’s 65- and-over population, in which 10 % was in more developed countries and 5% was in less developed countries. On a global level, the 85-and-over population is projected to increase 151% between 2005 and 2030.More than half of the world’s oldest old live in China, the United States, India, Japan, Germany, and Russia. Living from birth to age 100 may have risen from 1 in 20 million to 1 in 50 by 2030 for females in low-mortality nation, say, Japan, in estimation.

Trend 4 – Non-communicable diseases are becoming a growing burden

There is an epidemiological transition that the non-communicable diseases have become the focus in light of global aging. In the past, a large number of people were killed by infectious and parasitic disease. However, non- communicable and chronic diseases are the major cause of death in both developed and developing countries nowadays. Regarding to this trend, there are three elaborations of the situation: 1) “Compression of morbidity” – decrease in disability as life expectancy increases; 2) “expansion of morbidity” – increase in disability as life expectancy increases; and 3) decrease in severe disability but increase in milder chronic disease. With the increase in life expectancy in general and the non-correspondent disability rate in different countries, it requires more studies and research to see which elaboration offers a better explanation of the real situation

Trend 5 – Aging and population decline

Simultaneous population aging and population decline are happening in some countries. Where the global population is aging, more than 20 countries are projected to experience population declines in the upcoming decades. A research done by U.S. Census Bureau shows that Russia’s population declines the most rapidly (-18 millions) between 2006 and 2030. Following is Japan. The projected population decline in Japan is 11 millions between 2006 and 2030.

Trend 6 – Changing family structure

In trend 6, it is about the world trend of changing family structure. Low fertility rate means older people have less family care and support. Family structure is change from nuclear or extended family change to other types e.g. divorce, remarriage, non marriage, voluntarily childless.

Many people are living alone in older age. According to the reading, in some European countries, more than 40 percent of women age 65 and older live alone.” And the diagram also show the trend in Japan, the older people living alone have growing faster in 1960-2000. Therefore, the cost of long-term care is a burden to families and society.

Trend 7 – Shifting patterns of work and retirement

People tend to work at older ages. From the figure, we can see the European employment rate at age 55-64 have clear increase during 1994-2005. Beginning in the 1990s, a workforce participation rate for older women has been a steady increase. That means women have ability to accumulate and control economic resources in older age. But the job types of elderly are from full-time job changing to part-time job or transition job.

According to Organization for Economic Cooperation and Development (OECD), life expectancy has increased and the retirement ages have decreased. In 1960, men on average could expect to spend 46 years in the workforce. In 1995, the number of years in the workforce had decreased to 37. Therefore, if we want to increase workforce, we should set up a high retirement age to maintain enough workforce in the market.

Trend 8 – Evolving Social insurance systems

As the situation of population ageing, the increasing pension expenditure. According to our readings “25 EU countries consumed one-eighth of gross domestic product in 2003”. Many countries reform their old-age social insurance programs. For example, Japan rose the pension age: men’s pension age from 60 to 65, women from 57 to 65. In order to support the economic security, some government Increase tax rate on workers e.g. “Twenty-four Europe countries now have payroll tax rates that equal or exceed 20 percent of wages.”(P.21)

Trend 9 – Emerging economic challenges

It says that population ageing is affecting on local and global economies. Therefore many countries have some social programs that are target to the older population— principally health care and income support programs. 1) Fully fund program: “This describes a superannuation fund whose assets are sufficient to meet all the fund's liabilities” 2) Pay-as-you-go system: “A method of paying income tax in which the employer deducts a portion of an employee's monthly salary to remit to the IRS.”

On the other hand, we should be concern is high level of population aging, labor force tends to decline. That make government need high tax rate to solve the problem of growing older populations. The tax burden may discourage future workforce participation.

Overall review

Significance of themes

Population aging is a global issue that can affect many parts of our society in the sense that it takes parts in the changes and adjustment in the economy, labor force, medical system, residential issues, continued development etc. It is important and meaningful for us, the people, to realize the effects it may bring. Though population aging is a global trend, there are only a few governments had taken actions to plan for the long term and tackle the possible challenges that may soon happen in their societies. Clearly, more research and policies are needed regarding to this problem. Raising global awareness regarding to the population aging issue is significant.

Use of data

In this report, many statistics are used to illustrate the trends. However, as a report talking about the global situation, we expect the data should provide us with the whole picture of the world. Since the data are not collected for the sake of supporting this report, some data are not general enough to explain the global situation. Say for example, when illustrating the increases in life expectancy in every age, data of white female survival in the US between 1901 & 2003 is used. Yet, the situation in the US, a developed country, may differ from other developing countries. Race and sexual difference may also lead to different outcome.

In-depth review

“Population aging is driven by declines in fertility and improvement in health and longevity.” [1] 

This statement is partially right. It is true that population ageing arises from increased longevity and decreased fertility. An increase in longevity rises the average age of the population by increasing the numbers of surviving older people and a decline in fertility reduces the size of the most recent birth cohorts relative to the previous birth cohorts, hence reducing the size of the youngest age groups relative to that of the older ones. Apart form these, migration, as another demographic effect, also contributes to population aging. Thought immigration usually slows down population aging, for example the women holders of One-way Permit in Hong Kong are likely to be younger and have more children, the other types of migration tend to worsen the situation that the immigration may not make up for the population aging.

Obviously, emigration of working-age adults fastens population aging especially in some Caribbean nations. These people migrate for career development or for money, so they tend not to have or have fewer children. There is also immigration of elderly retirees from other countries. Return migration of former emigrants who are above the average population age is common in some region. It is estimated that migration will have a more prominent role in population aging in the future, particularly in low-fertility countries with stable or declining population size. The effects of migration on population aging are usually stronger in smaller populations, because of higher relative weight of migrants in such populations. [2] 

“Non-married women are less likely than non married men to have accumulated assets and pension wealth for use in older age.” [3] 

We agree with the statement because we find some support from studies. In the table from Health and Retirement Study Wave 1(1992), it shows that the total wealth of non married men is $191,836 and the total wealth of non married women is $157,098. And a finding of the International Longevity Center-USA, it found that unemployment of women who are in the labor force: “in 1993 the rate was 24% for women compared with 8% for men.”(ILC-USA, 2002) The high rate of economic activity for older men may make low level of old-age pensions.

“Preparing financially for longer lives and finding ways to reduce aging-related disability should become national and global priorities.” [4] 

As suggested in trend 6 to 9, it is true that population aging leads to great challenges and demands for changes and adjustments in policy making. Financial preparation and improvement in reducing aging-related disability are important as the large number of old population will definitely increase the burden of the economy as well as the social insurance system. However, in tackling aging problems, we consider other aspects as the same important as the two mentioned in the report.

Firstly, increase fertility is fundamentally important to deal with aging population. As it is rather impossible to shorten people life expectancy and disallow people to migrate due to econ reason, increasing fertility rate seems to be the only feasible way to deal with aging population; in which subsidized child care and childcare leave are possible ways to increase fertility.

Subsidized child care enables women to combine work and family. When comparing the levels of women's labor-force participation and family size country by country, Daly, an economist, found that in societies that made it easier for women to combine paid employment with children - Sweden, for example - the rate of women's employment and the birth rate were both high. Also, High employment rates for women would also help countries with aging populations cope with a shortage of workers [5] .

Moreover, baby bonus and childcare leave can also boost fertility. Parents in those countries who can get more help from the government will have relatively high fertility rates. Consider the experience in France. Pregnant women has at least 16 weeks of mandatory, paid maternity leave, as well as guaranteed job security and get a monthly stipend of up to 1,000 euros for a year if she has the third child. The fertility rates of those countries which practice these policies for decades are approaching 2.1, roughly the point where a population can sustain itself without immigration [6] .

Secondary, for the problem of elderly living alone, we think that consolidating the traditional value of Filial piety is rather important. In the table below, we can see most of older people are living with children or grandchildren in Asian country. However, older people who are living with children or grandchildren are three times more compared to Europe and North America.

Asian country can have such result because they have strong value of Filial piety. Such as China, they have strong confusion value that adult children may think take care of the older parents is their responsibilities and they do not think living with elderly is burden. Because elderly not only is care receiver but also can be the care giver.

Nevertheless, adjustments in policy that favorable to longer working life are also the way out. Population ageing is a burden of government in the sense that it increases the pension expenditure and decreases the supply of labor force. It may lower the economy growth of the country. For that reason, increase the pension age is a good suggestion to tackle the aging problem. Elderly also have their ability to work. We can see the example of Singapore. The Minister for Manpower in Singapore wants to encourage older workers to stay active: 1) to remain at work to pay for a more comfortable retirement 2) to ease financial strains on the government 3) to ease strains of reducing younger workforce. As a result, the retirement age in Singapore increased to 62, . “According to preliminary results from Ministry of Manpower’s comprehensive mid-year Labor Force Survey, the employment rate for older residents aged 55 to 64 in Singapore is 57.2%,” said Gan Kim Yong, Minister for Manpower. Therefore, the employment rate for older men in Singapore has increased from 73.8% to 74.7% in 2008 to 2009. After increase the pension age, the supply of workforce will increase and the pension expenditure of government will decrease.

Supplementary information

As we know that, as other parts of the world, population aging becomes serious in recent decades in Hong Kong. We provide the below information about Hong Kong’s welfare provision towards the elderly as supplement of the report in hope of that more people, including the government, can aware of the aging trend happened in our society and take active roles in planning our future. According to the social welfare department, there is about 60% of elderly who are receiving CSSA. It is a burden of Hong Kong economy. As the World Bank published the report "Averting the Old-Age Crisis: Policies to Protect the Old and Promote Growth". Therefore, the government provides some scheme to solve the problem. They are the Comprehensive Social Security Assistance (CSSA), the Universal Retirement Protection Scheme and the Mandatory Provident Fund Scheme (MPF) respectively. In the following, a slight discussion will be provided in comparing these social insurance schemes.

Comprehensive Social Security Assistance (CSSA) is the layer of social safety net. Nowadays, People seem to more relay on the safety net because we see the increasing tend on application. The value of Hong Kong people had changed, people try to fight for more welfare from the government. And people think that government had the responsibility to care of the elderly. So the government spending on CSSA is higher in these years and she need to concern.

Universal Retirement Protection Scheme is a retirement fund that can cover the basic spending of the retirement life. In case of many poor elderly in Hong Kong, "Legislative Council urges the Government to set up a sustainable universal retirement protection scheme, so that all senior citizens can enjoy financial security to maintain a basic standard of living immediately after retirement." proposed by Hon Lee Cheuk-yan. But this scheme may be a burden of Hong Kong government.

Mandatory Provident Fund Schemes (MPF) is a financial security system to protect the working population in their retirement years. After the implementation of MPF, around 87% of the total employers are now covered under retirement schemes. However, it cannot solve the problem immediately because the scheme is only practice for a few years, the fund may not have enough financial support for the elderly and the cumulative of the fund highly depends on the employees’ salary and whether the investment program can receive a good return. Therefore it has limitations that may not be able to protect all people after retirement.

Conclusion:

To conclude, the nine trends suggested in the report are significant in the sense that a global perspective is useful for us to understand the challenges and opportunities brought by population aging. However, we think that both of the method of data collection and the content of the report are to general that may ignore many parts in illustrations. We argue some points mentioned in the report by providing more information regarding to the issue. Moreover, we think the views on population aging held in the report are a bit negative. Actually, older people have ability to contribute to the society by involving in social service. For example, Retired Senior Volunteer Program (RSVP) announced that there are more than 135,000 new volunteers in America last year. Last but not least, the report only pointed out the trends without many suggestions and solutions to the problems. It is hope that more international studies can be done to determine the best ways to address the situation before it is too late.

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