In many countries, people are now living longer than ever before. Some people say an ageing population creates problems for governments. Other people think there are benefits if society has more elderly people.
To what extent do the advantages of having an ageing population outweigh the disadvantages?
There are no two opinions in saying that life expectancy has greatly improved in developing as well as developed countries wish the modernization in healthcare infrastructure. Globally, life expectancy has increased by more than 6 years between 2000 and 2019. With the increase in life expectancy the number of elderly people is on increase that comes with the disadvantage for the government as government has to spend on these old age people. Else, elderly people are also helpful for the governments as they get involved in workforce such as household, farming, small scale businesses especially across the developing countries where governments don’t offer generous support for the older population.
There are many disadvantages of the growing elderly population across the countries as it is considered a pressure on the governments. Likewise, as populations in richer nations get older, GDP growth slows, support costs rise, and government budgets feel pressure. Hence, an aging population and slower labor force growth affect economies in many ways—the growth of GDP slows, working-age people pay more to support the elderly, and public budgets strain under the burden of the higher total cost of health and retirement programs for old people.
Moreover, the economic growth is slowing in advanced economies at least in part because the end of the baby boom led to a decline in population and labor force growth—despite immigration. Many empirical studies have found that GDP growth slows roughly one to one with declines in labor force and population growth which is a disquieting prospect for both the United States and Europe.
Governments spend on the elderly in the form of cash such as pensions and in-kind public transfers such as health care and long-term care. These public transfers are paid for by taxes, mostly those paid by the prime-age adult population. For instance, there are many benefits, programs, and discounts available for seniors over the age of 65 in the US. Many of these programs offer free or reduced-cost options on health care, transportation services, housing assistance, prescription drugs, Recreational activities, food and dining. One such program is the Social Security Administration (SSA). It is a government agency that provides financial support to seniors over the age of 65. Additionally, government also pay for Medicare expenses of older population through a different program.
As many advanced economies already have a declining working-age population—in Europe it will fall more than 20 percent between 2015 and 2055, with an attendant decline in GDP growth, an IMF report stated.
Paradoxically speaking, the old age people have advantages for the governments as well as they’re involved in some kind of economic activity. There are examples of the economic activity of older adults in all parts of the world. From across developing countries, there is evidence of the productivity, creativity, vitality and participation of older adults in workplaces, communities, households, and families. For example, farming in developing countries is increasingly dominated by older workers, and a significant proportion of global food comes from small-holdings managed by older people, including many women, says an Oxford research professor in her latest finding about the economics and old age people.
Besides, an estimated 450 million small-scale farms support a population of roughly 2.2 billion people worldwide and represent 85 per cent of all the world’s farms. In particular, older men and women are primary caregivers for many children and grandchildren.
