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What Is Ageing And Aged Population Economics Essay

Nowadays, along with the education and technology of the society improved gradually, it also improved the living standard to our life, thus it can be seen that it has been solved the problem of procreate.

From the past 1960s, people did not have enough education knowledge on procreate, and which cause the population was constantly going up and that make the resource of the country is being to insufficiency. Therefore, the government to exert great efforts on popularized and give publicity to the knowledge and explain the problem of procreate.

Today, the procreate problem has been solved and control, simultaneously it also derive from another concerned problem. - The Ageing of Population problem.

The reason to cause ageing population problem, it is because the fertility declined and the average human life is improved. According to the statistic by investigating in different country, probably the problem occurs in developed country such as UK, US and Japan etc. As we know both of these countries are having good enough knowledge on procreate or the new generation mindset so that it causes the people is not willing to be bear.

Along with the long time, most of the developed country proportions of population rate are being the distance between youth and old people.

By the way, the problem of ageing occurs in the country which is the most effective? Actually this ageing problem would bringing the labour market to be disappeared and the society would deflected on wealth fare of older people and the government is much expense the way on medical treatment.

Literature review1

What is ageing and aged population?

Concerning the ageing population definition we can simplify the meaning with that it refer to the country, if there is older people increase rapidly and it also make the society is being to the elder centre and that, it is ageing population.

According to Unit of nation indicate that the ageing population is analysis by demograhic and which is based on three indicators; At first is the total fertility rate; in the second is averag life of expectancy contain the birth and at ages that it is 60, 65 and 80years old people; and the last is the probability of survival to older ages.1

Generally, the issue of ageing population is lasting and affecting the global phenomenon that the result is recorded by demographic transition from high to low level with fertility and morality. This report considers the process of population ageing for the world as a whole; for developed and developing regions; for major areas and regions; and for individual countries (1) In fact, the ageing population has been existed for a period of time and it derives from the past 30 years ago. Most of the European countries are concerned this ageing problem to effect the future in the society.

Most countries in euro have seen the proportion of their population aged 65 and over increase form around 10 per cent to 15 per cent between 1960 to 1990. For example; in Greece, the proportion of ageing record form 8.1 per cent in 1960 to 15.8 per cent in 1997 and that is issue to concern. Therefore we can seem that the ageing population which it is began in 60s and lasting to centre 21st.(2)

Tim blackmen social care and social exclusion(2)

How to decide the region has been ageing population?

In an addition, we can conclude the theory by William .A. Jackson which he refers to a population in the regions is said to be ageing if it satisfies either or both of tow conditions.

The first is that its average (means or median) age is increasing. If the age of the average person rise, then the population mimics individual ageing, and the idea of population ageing has an intuitive appeal. All the individual belonging to a population must, of course, be ageing at the same rate, but the population as a whole can have a rising, falling or constant average age. Changes in a population��s average age derive from the ageing of existing cohorts, a qualitative change in the living population, and the addition and subtraction of cohorts through births and deaths, a quantitative change in the size and compost ion of the population. The interplay of these effect ensures that population ageing is a more complex process than individual ageing.

The second condition defining an ageing population is an increase in the proportion of the population above a certain threshold age. By far the most common threshold is the statutory retirement age that divides those expected to be economically inactive from those expected to be active. An increase in retires the elderly population as a proportion of the total denote an ageing population.(3)

The political economy of ageing william A jackson(3)

In contrast, some of the developing regions, there is not appearing the ageing population problem. According to the investigating, in Africa Population ageing in Africa is projected to be moderate: only 11 of the 54 countries in the continent are expected to see their median ages rise by at least 12 years and most of them are located in Northern Africa.

Furthermore, in 2005, 42 countries out of the 54 in Africa had median ages below age 20 and

even by 2050, 34 countries are projected to have median ages lower than 30-(3)�K..(ݯ���proof) Because there is unstable political, lack of knowledge in procreate so it cause the birth rate always to maintain highly, simultaneously the mortality rate is being higher also.

1) United Nations. Dept. of Economic and Social Affairs. Population Division - Social Science - 2002 - 483 pages

(2) paragraphs2 pages1

(3) paragraphs4 pages3

What reason to cause the ageing population?

According to the theory william A jackson,refer to the cause of population ageing it divide by three sources of demographic change: fertility, mortality and migration. Probably, the mortality is the most obvious cause of population ageing, as it forms a clear compare with the ageing of the individual. If mortality falls and people live longer than average age of the population will rise and population ageing will begin. In the other hand, declining in fertility rate it also declining to the birth cochorts and a fall in the size of younger generation relative to older ones, therefore the fertility is just as important an influence as mortality, and population age could be induced by falling fertility combined with stable( or even rising) mortality. The third source is migration, it also can act as the same way between mortality and fertility, it depends on the migration is inward or outward by add or remove to member of the population.(3)

In summary, I can conclude that the ageing population problem is cause by the fertility is decrease and the life of human is keeping improved. However what reason to causes the main issue occurs? Probably, because of the people life is being wealth and the life standard, is improved. Therefore, in generally the ageing population issues would existing in the developed regions, all of the developed countries there are the similar factor such as strong economics, improved medical, steady policy in society and higher living standard etc. Both of these which is to cause people life improved.

Along with the people was going up to the standard of life so it thus keep human life being longevity. For example; In Europe, about the three countries (Albania, Ireland and the Republic of Moldova) have currently a median age higher than 34 years and 12 countries or areas in the continent have median ages higher than 40. Also Japan has the oldest population in the world, with a median age of nearly 43 years in 2005.(2) In simultaneously, the new generation has been changed their mindset on procreate. In fact, twenty-first centre, the new generation of women, have been changed their mindset on percrate due to they were enjoyed a single lifestyle more than before otherwise I can say that the new generation of women is much enjoy in work than before. According to Tim,Blackmen,it refer to the women rising labour force participation and, in the longer term, decling fertility.(Drew,1998). Today, developed region is being wealth on welth fare and which also to drive the new education and employment opportunities and it has opened up for women, who have traditionally undertaken the care of older people, and younger women are increasingly less willing to undertaken unpaid care work.

In additional, some of the women are willing to be a single mother more than to choice a kids because they don��t want to fetter by take care a kids and they feel pleased to keep their life on leisurely and carefree. however, the women supposed that the children in the family would bring a higher cost on their life, because a parents need to caring about the kids by use a long time for foucsing on their future such as educating and medical.

According the opinion of Lori Bradley said that the reason of the new generation women choice not to have children. From a historical perspective, I believe that more women are choosing to be child free today because we are now realizing that we have a CHOICE. In past generations, options for women were limited. Basically, the only option for women was to get married, have children, and take care of the home. Men worked. Women did not. (At least ��respectable�� women didn��t) We were dependent on that paradigm for our very survival.(4)

Lori Bradley

BellaOnline's Married No Kids Editor

The ageing population cause another issue.

What is the phenomenon of the ageing population in UK today?

In fact, the ageing population occurs as the fertility declined and the life is keeping improved. In the other hand, if a country the proportion of aged 65 and over is increased, but the birth rate is always in the low average thus it cause ageing population. According to statistic, in most of the Europeans countries are being with the same problem, in 1960 to 1990s late, the proportion of aged 65 and over is increased from around 10 per cent to 15 per cent ,therefore this show that the proportion of ageing which cause for concern. The ageing population in UK is being faster ever than before. According to the statisticians, there are expected a higher number of 100 year olds people would increase by the next century. Concerning the recent estimates, the people who is 60 and over can rising by 40 per cent in the next 30 years. This is much deserved to concern in the future of Britain. By recording in 1995, in UK there were less than 9 million people over 65years old, and expect in 2030, the people would increase to be about 13 million until 2031, the fertility is set to fall as women leave childbirth later and later which also means that there will be fewer young people supporting a growing elderly population.

Britain's population is ageing fast, with statisticians predicting a huge increase in the number of 100 year olds by the next century. According to recent estimates, the number of people over 60 could rise by 40% in the next 30 years, although there is much dispute about the figures. In 1995 there were less than 9 million people over 65 in the UK - by 2030 there may be about 13 million. In 1951, there were 300 people aged 100 and over. By the year 2031, it is estimated that this figure could boom to 36,000. At the same time, fertility is set to fall as women leave childbirth later and later. This means there will be fewer young people supporting a growing elderly population. The ratio of people of working age to people over 65 could fall from 3.7:1 to 2.1:1 in 2040. With people living longer and longer because of medical and other advances, health experts believe the number of people suffering from debilitating conditions such as cancer and heart disease will grow and could mean a rising demand for nursing care.(5)


The population of the UK is ageing. Over the last 25 years the percentage of the population aged 65 and over increased from 15 per cent in 1983 to 16 per cent in 2008, an increase of 1.5 million people in this age group. Over the same period, the percentage of the population aged 16 and under decreased from 21 per cent to 19 per cent. This trend is projected to continue. By 2033, 23 per cent of the population will be aged 65 and over compared to 18 per cent aged 16 or younger.(6)


The Impact of an Ageing Population on the Economy?

We all understand that human resources are determined the elements of social prosperity. The aging population, the greater the proportion of affected to the greater. In addition to the aging of the population will no longer contribute to society, so that the community can be more revenues, on the contrary, these old people on the consumption of social resources, will continue to grow. If they are poor economy, and this life will rely on health care provided by the Government. Social prosperity, Economic development and the natural can be maintained, if the social climate change that the economic recession will change accordingly and still to bear the huge expenditure, therefore it would be affected to other public building such as the whole community will be big step backwards.

When many people life is being longevity than expectation, thus the reservation of the use for retirement assets is becoming depletion. Therefore, it causes to bear a longevity risk in the developed regions and the government is up against to the shortage of labor in the elderly issue.

The ageing population effect on economics growth;

So we can simply that, the ageing population has three main issues to affect on economy growth; the first is productivity decline, shortage in new technological and the government spending increase.

Concerning the productivity decline, probably it is relate to the age structure of the labour force and it will cause changes in the productivity, probably the aging is not only the size of the labour force change, even the working population age structure will change accordingly. Aging of the population will make the structure of labour productivity will affect the productivity inefficiency. If the ratio of elderly population in the regions, such as to continue to increase thus the affordability will become even more aggravated, and the older unemployed are less physical that it make their health deteriorates gradually therefore it makes the productivity to be decrease and government has to be increase in health care, by both of these affecting, we can seen that it would become recession gradually.

According to the theory by Skirbekk 2003; it explained the reason why the ageing population would make productivity decline because of the older worker force is less productive than their younger colleagues (7). Since all we realized that the labour in younger can increase in productivity in the regions, but Becker 1962, refer to the productivity increases by age because of the older work force can have more experienced thus which it being more productive, therefore between these two theory are very controversial.

We can think about that if the developed country does not have new technology support, will it be holding to growth up in economics? In fact, human resource is determine the phenomena of economy growth in the country, so if it declined the new technological, new create and motivation innovation in the developed regions that the economics cannot be going up without the new technological improved. According to The Slow-Swan model, it implies that the growth of income per capita cannot be sustained without continued technological progress, and the only possible source of growth in the long run is technological change.(7) Though of the new technological only can make economy growth up continuously. So that, the ageing population and technological is seem likely to directly relationship.

Actually, we all know that, younger people have energy, motive power therefore it can proof that the older labour force is less productive, but the ratio of younger colleagues to run off or to change other job is easily as well.

Hence, I can conclude that ageing population make the developed regions of economics cannot be going up because of older worker force is lack of productivity power?

The productivity decline affects the labour market;

Above explain the reason to cause productivity decline by ageing population. So that, if the productivity decline, would it be affect the labour market in the country? I assume that there are two factors; the first which is cause no one to invest in domestic, second it would bring up the illegal immigration boom. The productivity decline in the country and then it because industry cannot be developing continuously, then investor would have chosen another country for investment, therefore it also because the domestic industry disappears.

In addition, when productivity decline, it also cause the illegal immigration boom, and it increase the labour competition. They would not have a long stay so it cause economics cannot be health growth up.


Economics growth is dependent on the human capital resource, if the human capital decreases, that the country economics cannot be growth efficiency, thus the productivity is a critical determinant of cost efficiency. It is because a healthy growth in economics is necessary dependant on the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

From the definition on labour economics, which is divide by two parts between microeconomics and macroeconomics both of these is techniques to the labour market. In generally, micro techniques act as the role of individual, however the Marco is more comprehensive of techniques seen as the interrelations between the labour market, the goods market, the money market, and the foreign trade market. It looks at how these interactions to effect in macro variables such as employment levels, participation rates, aggregate income and Gross Domestic Product.

In generally, the labour market is likely to any other market, there are also exist the force of supply and demand, and determine by price ( wage rate) and quantity( number of people has employed). As, if the supply (productivity) decreases in the market then the quantities demand would decline accordingly.

In fact, the labour markets structure is through of the interaction by each workers and employers and The model of labour supply which means that the available of suitable human resource in labour market and the labour demand refers to the need for employees and workers in a particular job market such as construction or manufacturing

Therefore, the labour economics depend on the suppliers of labour services (workers), the demanders of labour services (employers), and reflect to the resulting pattern of wages, employment, and income.

Hence these theories refer to the total supply of labour available to produce goods and services are a key factor determining how much output an economy can generate. So if the ageing proportion is inequity in the country which means that the supply cannot be efficiency and it causes the demand exceed to the supply. So when it occurs, then it derives from the other social issue- The illegal immigration boom.

The illegal immigration to effect the economic growth;

Because of the ageing population to cause the shortage in productivity, thus it causes to inflow the immigration in domestic country for sustain domestic industry. However, there is also the amount of illegal immigration that is allowed to occur. Some of the unethical employer, they doesn't want to pay minimum wage and much willing to hire the illegal immigrant, because both of the immigrant are abundant and often desperate for even the smallest of incomes. Actually, if the market is more worker than job then the income for worker would pay less. In the work fairly market well as population and economic growth are usually in equilibrium by the employer need skill employees then they pay for more income to attract the skill labour get work, but when the unskilled illegal immigrant increase continuously thus it let the job market is become more competitive and this is unfair to the domestic labour.

Hence, the illegal immigrant to cause the economics goes down by the money sustain to the economy of another country and increase government spending on public. A huge number of the immigrants to the country in order to getting a job that pays better than what is available in their own country and then after they earned money and they would send back to their country so they never to consume in the country because they realised that cannot be long stay, for example; According to Time Magazine, the third largest source of income in the Mexican economy is money that is sent to Mexico from Mexican immigrants working in the United States. Thus, the money earned from domestic is not being used to sustain and fuel our economy; on the contrary it instead subsidizes the economy to another country. In an addition, the government extort a confession increase on spending such as public education and medical services. As the developed countries, there are provide health care or offer for people having standard education, even who cannot pay for it, so some of the illegal immigrant would misuse. In generally, most of the illegal immigrant is poor, because they work for the low wage, so when they have medical problem and usually they take their problems to a trauma centre or hospital emergency room, where they are treated for free and to cause people have to wait for a long time before see the doctor. (9)

The ageing population increase government spending;

Along with the ageing of population proportion is increased in the developed regions, the whole world of the government has to bear this huge expenditure on wealth fare. Probably, this expenditure is use for the health care and pension, thus it seem to be need to carry a Time Bomb on the government spending.

According the Edmund Conway, Economics Editor, said that it is warning that the real threat to the economy is not the fallout from the current financial mess, but the weight our ageing population will impose on the budget. The consequences are depressingly predictable with the budget deficit will climb higher and higher as those pensioners collect their retirement and medical benefits. (8)

What is pension?

The pension means the lump sum salary for retirement benefit.

What does government can do to solve this problem? According to economicst said that the pension saving is a classic economics issue of distribute limited resource. Following to this theory, there are two dimensions, at first;

Pension saving is a classic economic problem of allocating scarce resources. There are two dimensions to this problem. First, think about the pension saving decision that faces a particular individual. Every year the individual wants to buy goods and services. Whilst working, he can pay for these using the money he earns. But what happens when he retires? He still needs to buy things but he does not earn any money to buy them with. What he will probably want to do is save some of the money he earns during his working life and use this to buy goods when he is retired. This is known as consumption smoothing. Every year of his life, the individual makes a decision �V how much of what he earns will he spend this year and how much does he want to save to pay for things another year? This is the basic theory behind the lifecycle model in economics, which says that individuals take all present and future income, needs and costs into account when choosing current consumption.

To understand the second dimension of the resource allocation implicit in pensions, think about pension provision from the point of view of our society at one particular point in time. In any one year there are workers who earn money and non-workers (such as pensioners) who do not. In order for pensioners to buy things that year,

some of the resources of the workers need to be transferred to them. There are two main ways that this happens. First, workers pay taxes which are used to give money to pensioners through state pensions and means-tested benefits. Second, workers save some of their earnings because they want to put some money aside for when they retire. But they typically do not just put this money under the mattress. What they actually do is invest it by buying assets. These assets may be bought from pensioners (who now want to use the savings they put aside while they were working) and so workers transfer resources to pensioners by buying assets from them.

Most of the developed world has to consider how best to support older individuals in the presence of this pension spending in a part of wealth fare.

What can government do in the policy;

Which line of business would be the first impact?

Would the Industry face to terminate?

What��s the government policy can rescued this crisis?



What is the long term concerned of government?

What is the disadvantage in the society?


Chapter 2

What is the ageing population problem in Hong Kong?

What does the Hong Kong government policy to prevent this problem?



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