Aging Populations

One of the key challenges the world is facing in the coming decades is the gradual and largely irreversible shift towards older populations. According to the United Nations Population Division, the number of people aged 65 and older, currently estimated at 857 million, is expected to nearly double over the next two and a half decades, reaching 1.58 billion in 2050. The share of the global population older than 65 is projected to grow from 10 percent this year to 16 percent in 2050, as many high-income countries are expected to see significantly higher rates than that.

As the following chart shows, Asia is at the forefront of this trend, with Hong Kong, South Korea, Taiwan and Japan expected to have the highest share of people aged 65 and older by 2050. While Japan is famous for its old population and currently topping the list, other Asian economies are in the middle of a significant shift, as life expectancy has rapidly improved over the last decades and continues to do so. By 2050, around 40 percent of the populations of Taiwan, South Korea, Hong Kong and Japan are expected to be 65 and older, which is a huge difference to the levels currently observed in the world's "oldest" countries, where the share of people above the age of 65 is in the low to mid 20s, with the exception of Japan, which has already reached 30 percent.

“Population ageing is a defining global trend of our time,” the UN Department for Economic and Social Affairs wrote in its World Social Report 2023, calling it a “major success story” that brings both challenges and opportunities. One of the main challenges for countries with ageing populations is to ensure that the economy can support the consumption needs of a growing number of older people, be it by raising the legal retirement age, removing barriers to voluntary labor force participation of older people or by ensuring equitable access to education, health care and working opportunities throughout the lifespan, which can help boost economic security at older ages.

Especially countries in the early stages of the demographic shift have the opportunity to plan ahead and implement the right measures ahead of time, to effectively manage the challenges that come with an aging population.