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Saturday, June 11, 2016

100 years of global aging, in one GIF 06-11

100 years of global aging, in one GIF

The median age of a Japanese citizen today is about 46.5 years old. In Cameroon, it's just 18.5 years. That's a wide gap, and one that tells us a lot about both countries — and, more broadly, the state of the world today.

To understand what this gap tells us, it helps to look at a global perspective. The following GIF, from Lund University Masters student Aron Strandberg, does this beautifully. Using data from the United Nations World Population Prospects, it traces the median age around the world from 1960 through today. It also uses the UN's projections to estimate how each country's median will likely change over the next 40-odd years:

Immediately, you see two things. First, the median age tends to be significantly higher in wealthy and middle-income countries than in poorer ones. Second, the median age is going up in almost every country worldwide.

These two trends reflect centuries of good news. Rapid technological development and economic growth since the Industrial Revolution have allowed people to live much longer. Basic public health techniques have dramatically reduced infant mortality, and more advanced technologies (like chemotherapy) allow people to live even longer. This progress has been uneven — people in wealthy countries still live longer — but the trend is unmistakable.

That explains why the median age is getting higher basically everywhere, and why it's higher in rich countries than in poor ones. People are just living longer.

But there's a dark side to this trend: Populations can get too old.

An older median age isn't produced merely by people living longer. If fewer babies are being born in a country, then that will raise a country's median age even if it hasn't seen huge increases in life expectancy. According to the UN, "fertility has declined in virtually all major areas of the world" in recent years.

In some places, that's not so bad: Sub-Saharan African countries still had an average of 4.7 children per woman between 2010 and 2015, more than enough to deliver robust population growth. In those countries, a lower birthrate over time would be a good sign, as it tends to correlate with economic development and more education for women.

But in Europe (fertility rate: 1.6), North America (1.86), and Asia (2.2), low birthrate is becoming a serious problem.

As the map shows, the median age in countries like Japan, China, the US, and France will soon reach the 40s and 50s if current trends continue. Imagine a world where the median age in America is 10 years older than it is today, and then think about how many more people will qualify for Social Security versus how many fewer working-age people there will be who can be taxed to pay for it.
This isn't an imminent problem in the United States, and may not be one for some time. But it is in Japan, which has one of the lowest birthrates in the world. The Japanese experience is serving as something of a test case for what happens when a country gets too old.

"The working age population is falling by about 1 percent per year, and the rate of shrinkage will eventually approach 1.7 percent per year, so that even productivity growth of 2% or more will deliver very low aggregate or per capita growth," a recent OECD report concludes. "There will simply be no way to sustain high living standards and quality public standards in a 'super-aging' Japan unless the country is able to achieve much higher rates of productivity growth."

So while it's great news that a lot of countries are getting older, some countries — namely rich ones — are getting too old. This is a solvable problem: Both increased immigration from poor countries and better integration of women into the workplace should raise a country's birthrate. But if rich countries want to stave off serious economic problems down the line, they need to start dealing with their birthrate problems soon.

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