As 450 million baby boomers around the world continue to age, the impact on longevity benefits, low fertility rates and other economic issues will be profound. Consider, in just the last week alone, these government actions and critical public attention to this issue:
Spain’s government is shifting from a short-term fiscal emphasis to longer-term plans, as it moves to raise its retirement age from 65 to 67, one of the most dramatic shifts in all of Europe. The action is not insignificant if one recalls the bomb throwing in France a few months back when President Sarkozy announced his plan to raise retirement in that country by about two years, to the early 60s.
In China, the government is pushing for a new amendment to its "1996 Rights of Aged Act" that would require adult children to regularly visit their elderly parents. If the adult children don’t visit, their parents can sue. Whether the approach works or not, it represents China’s growing awareness of the crisis in its long-term care of the elderly—a consequence of the country's one-child policy. Even a few years ago, an article in Population Reference Bureau identified the problem: “Care that had traditionally been provided at home in China by adult children (especially by daughters-in-law) will become increasingly less feasible in coming decades, when parents of the first generation of the one-child policy start reaching old age and retiring. These singletons will face the need to care for two parents and often four grandparents without siblings with whom to share the responsibility.” Worldwide, China has one of the fastest rates of aging among its population; the lack of necessary funds to address the demands is a huge impending political challenge as well.
At Davos this year, the topic of aging populations received significant attention, prompted by the World Economic Forum (WEF) report, “Global Risks 2011,” published ahead of the conference and warning of huge unfunded liabilities created by aging populations. While it focused on the developed countries of Europe, it also highlighted this alarming fact: The demographic change that’s occurred in Europe over 125 years is taking only 20 years in China. And while Korea is currently the third youngest OECD country, by 2050 it will be the second oldest after Japan.
With this attention, WEF joins with other important analysts and experts who suggest that aging populations are an important policy prism.
Michael W. Hodin, Ph.D., is Managing Director, The High Lantern Group and Executive Director of The Global Coalition on Aging.
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