Friday, July 24, 2009

The Census Bureau on Global Aging

Earlier this week, the US Census Bureau released a new report on global aging which nicely complements the post Claus put up earlier this week on the same subject. To regular followers of this blog, the contents should come as no surprise, but it does provide a good summary of the global situation.

The global percentage of elderly people (65 and over) is expected to rise from 7 to 14 percent by 2040. 14 percent is not a problematic number in itself, the problem is rather the uneven distribution with a disproportionate number in developed countries. This will obviously continue. The median age in Japan is projected to reach 54 in 2040 with several European countries close to 50. Even the relatively youthful US is expected to approach 40.

As I said, none of this is unexpected and most people and governments are aware of this, even if they're doing precious little about it. For me, the big story of the next thirty years will be the rapid aging of Asia. It's not just Japan anymore. South Korea is aging faster than any nation in history. By 2040 China will also start suffering the very real effects of a shrinking and aging population. Given the enormous size of the Chinese population, there is just no way for immigration to compensate.

One last point: The report of the US census bureau is focused on the purely fiscal effects of aging. These are well know: increased expenditure on pensions and health care, shrinking work forces, increased dependency ratios where an ever shrinking of people have to provide for ever more people. However, this report like many others, seems to overlook the structural effects on the economy which is the basis of much of the work Edward and Claus has done here. I think the arguments are persuasive that aging leads to weak domestic consumption and increasing export dependency -but it's not feasible for everyone to be export dependent. By 2040, essentially all of the developed world will be aged, including most of Asia. By 2070, the same will probably apply to South Asia and the Middle East. What then?


Anonymous said...

Sub-Saharan nations? Then the spacemen from beyond the moon I suppose. But by 2070 we will have kids born in tubes and parented by virtual reality programs. Sure they will be a little messed up - being raised by Laura Croft will do that - but when they hatch into the real world they will probably want to compensate for their mental issues by buying more stuff than they need. Either that or go on homicidal rampages. Either way, problem solved.

Aslak said...

I somehow don't see Subsaharan Africa as the world's importer of last resort. I guess I have almost as much faith in the spacemen or the tube-people.

More seriously, we really are going into uncharted territory here. Clearly, something will have to give.

Randy McDonald said...

Probably there will be an extended period of stagnation, as countries which have successfully adapted take over from those which haven't. Au 22ième siècle nous parlerons tous le français?

Anonymous said...

I wonder what will happen with China's TFR. Could it drop as low as South Korea's TFR or possibly lower?

Should the Chinese TFR go lower than it already is there could be incredible consequences. This often seems ignored in analysis of China.

I also wonder to what level India's TFR will drop. India is substantially closer to a "socially and economically traditional" society than Spain or Italy.

Anonymous said...

60 years ago Korea was sacked and Taiwan was much either. Look at them now so i don't see why Sub Sahara Africa can't be booming in 60 years.
By then Nigeria, a very large and industrious country, will have lost the oil plague and will be in a grow phase that will modern day China to shame.

Or what also could happen is that India & China imports all the women so there are no people left in Sub.

Anonymous said...


Except that Africa is filled with Africans.

Randy McDonald said...

Africa's filled with Africans by definition. It'd be odd if it was filled with Asians, or Polynesians, or Alpha Centaurans.

Anonymous said...

so what i see is that subsaharan africa will be the people exporter of last resort - their own countries may well continue to be poor candidates for investment, but the human material is there, and will be wanted/needed for cheap labor all over the world (east asia _will_ import labor eventually, when they need to bad enough). (unless the robots do all the work then).

and then - who knows? - the gene pool could start to reconverge, as their grandkids marry 'ours'

Randy McDonald said...

I don't see any reason why, with sufficiently stable institutions, sub-Saharan Africa couldn't become a prosperous region. What's going on is the standard process of state construction in very unstable environments just emerging from colonialism--China in the 1930s and 1940s was in a similar state, and just look at it now.

As for the human gene pool, it's more likely that the rest of the planet could be partially assimilated into the African.

There's more genetic diversity within Africa than in the rest of the world taken together.

Aslak said...

I'll admit to being pessimistic about the future of Subsaharan Africa -not because there's something inherently wrong with Africans, but simply because African countries, with a few exception have so far to go with regards to institution building, the rule of law etc. I don't think comparisons with Asia is useful because Asia has had milennias of state formation -they lagged behind the West technologically but not really that much in terms of governance. The West only had a century or two's advance on Asia. In comparison, pre-colonial Africa was mostly tribal societies and kingdoms and not modern states, technologically comparable to Celts, Gauls and Germanic tribes in ancient Europe. In terms of building institutions and a culture of good governance, they simply have so much farther to go.

I think Botswana shows that it's not impossible, but it is extraordinarily difficult.

Anonymous said...

Problem with Africa is that it was underpopulated. That is being solved so expect high growth rates.

Randy McDonald said...

@ Aslak:

I see your point, but Africa's not a whole. Nyerere's economic policies in Tanzania may have been catastrophic, but his determined anti-tribalist policies and promotion of Swahili as a common national language has helped give Tanzania a strong national identity that neighbouring Kenya lacks. At the other end of the spectrum is the Democratic Republic of Congo.

Some African states will be better able to support modern states than others, the more homogeneous, say, and the more stable. I'd point to the Sahel states, stretching from Senegal at least to Mali, as possible candidates for high growth; they've got long traditions of statehood, stable and pluralistic policies, and a long history of exchanges with North Africa. Coastal West Africa? I'd take it on a case by case basis.

Anonymous said...

The only inland regions in the world that are economic powers are or capital cities of a much larger states or have waterways to transport goods, neither is true for the Sahel so i don't see it

I see you just meant Senegal. I think you are right.