Aging populations aren’t just a concern just for rich countries. While Goldman Sachs and others have long observed that China and other developing countries are “growing old before they grow rich,” new World Bank research shows just how many countries lack both the economic means and the social welfare infrastructure to cope with the challenges posed by the profound demographic shift we now face all over the world.
This is “a global issue that is affecting, or will soon affect, virtually every country around the world, at a time when family support and other traditional safety nets have become less certain,” says Daniel Cotlear, co-author of “Some Economic Consequences of Global Ageing” and a lead economist in the World Bank’s Human Development Network. Cotlear underscores the importance of falling birth and death rates to gauge the economic implications of expanding older populations as a proportion of countries’ general populations. In more developed countries, life expectancy at birth grew by 11 years just since the 1950s. In the less developed countries, life expectancy increased by 26 years, and in the least developed countries, by 19.5 years. If this is now an issue for The World Bank, and certainly one these poorer countries must address, is it also a new issue for America’s foreign economic policy?
Joining the growing chorus of those observing the positive and hopeful consequences of aging populations, with co-authors Andrew Mason and Ronald Lee, Cotlear argues against the common “time bomb perception” of aging populations. In their view, making a simplistic extrapolation from the impact of aging on single programs such as public pensions gives a misleading impression about the more general macroeconomic consequences of population aging. With smart policies in labor markets, social security, long-term care and public health in place ahead of time, countries will better manage the economic and social needs of their aging societies.
No doubt prompted by the reality of 450 million baby boomers world-wide turning 65 over the next couple of decades, the World Bank has also cranked out a publication on the topic focused on how new members of the European Union and Croatia might cope with the issue of aging populations leading to increased demand for long-term care services: “New EU member states and Croatia consider a universal system of basic protection for all individuals requiring long-term care service.” A detailed report on aging in Latin America is due out in a couple of weeks.
Perhaps all this focus on the social implications of global aging will finally make policymakers sit up and take notice. While healthy aging didn’t make it into the UN Millennium Goals, the World Bank’s recent focus suggests the topic belongs right up there on the global policy agenda.
Michael W. Hodin, Ph.D., is Managing Director, The High Lantern Group, Adjunct Senior Fellow at The Council on Foreign Relations, and Executive Director of The Global Coalition on Aging.
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