The Economic Outlook of an Aging Society

The growth in the older population is a relatively new phenomenon that began during the second half of the twentieth century, first in developed countries and more recently across developing countries as well. It is grounded in two recent developments: a reduction in birthrate and developments in medical science that have significantly increased life expectancy.

Generally, men aged sixty-five and women aged sixty are classified as older people. In the richer, more developed countries, by 2050 about 30 percent of the population will be over the age of sixty years. A declining working population will have to create the income, wealth, and tax revenues needed to support the economic needs of the rising number of retired people, and this is likely to have enormous financial and political consequences. By 2050, the ratio of working people to those over age sixty-five in the United States will be about 3:1. This will have major implications for Social Security taxes and retirement planning. As a consequence of the large numbers retiring from the labor force, Social Security and other retirement systems will require re-organization. Key challenges include the financing of public pensions, health care costs of the aged, and long-term care. Other significant issues include changes in labor, immigration, and family policies. There will also be a rising risk of retiree poverty for millions of people, especially for those who have been unable to save enough through their pension and retirement plans

Economic growth, taxation, consumption, investments, and the welfare system will all impact society across all age groups. The public sector will undergo new stresses, as will free market systems and economic growth. In this context, the world economy will demand increased cooperation of governments to resolve socioeconomic and political problems and to assist state and local communities in providing adequate services for the older citizens.

Public Health, Public Policy, and Government and Community Practices

Even with all the changes the aging population will bring, the aging phenomenon can be seen as a success for current public health policies – policies that are increasing the physical health, psychological and social wellbeing, and the cognitive and functional abilities of older people.

Opportunities for active aging abound, grounded in better health and longer work participation and security. Active aging programs are allowing people to realize their potential for extended physical, social, and mental well-being throughout their life course. These developments may significantly enhance the quality of life for people as they age. For continued success, our future public health policies and institutions will have to assume a leadership role, creating initiatives for the aged that apply both to individuals and population groups. Education programs must be initiated, work policies regarding age must adapt, and health promotion must be at the forefront. Such programs will position the growing, global aged community to continue to be productive, independent participants in life and the new world demographics. There is much knowledge about aging that can be applied, but societies have a record of responding slowly to crisis. Now is the time to prepare for the changes that will face all global societies in the coming decades.

Health, Wellness, and Aging

Health promotes productivity, and the opportunity to be productive encourages good health. A productive aged society would be a positive gain for society as a whole as well as for the aged individuals.

The health of older people is improving over time. Recent generations have a lower disease occurrence and fewer health problems. Older people can live vigorous and more active lives until a much older age than in the past. Current intensive biomedical anti-aging interventions are helping to extend the health and productivity of human life. For instance, research has shown that a daily active fitness program will not only maintain physical health and cognitive abilities but can enhance physical and mental abilities. With encouragement and the need to be productive, older people can continue to be economic contributors, to the advantage of both the individual and the larger community and society.

Population aging also poses a great challenge for health-care systems world-wide. As the proportion of the aged populations of nations increase, so can the occurrence of disability, frailty, and chronic diseases including Alzheimer’s, cancer, cardiovascular, and cerebral diseases. The demand for health services increases as people age. It has been estimated that nearly 60 percent of a person’s health costs occur in the year before their death. As the population ages, the expenses of health care will increase, especially for the care of those with chronic ailments and diseases. Planning for these future demographics and the demands on both individuals and society needs to be proactive--not retroactive, when the situation reaches crisis proportions.

Social and Cultural Aspects of Aging

There is a societal obligation to understand how the needs and abilities of individuals can change with age and create programs, strategies, and sensibilities to aid this growing segment of population and society.

More people than ever are spending a significant amount of their lives in a non-work environment. These numbers will grow at a quickening pace. Living in a society where social lives are structured around work and its organization, how can we cope with a situation in which a large and now ever-growing segment of the population is leaving the domain of formally organized work? Will this new paradigm create a new structure of social inequality? Will we witness the growth of a new affluence divide between age-defined welfare classes and production-based classes? Will age become an increasingly acute differentiator of poverty juxtaposed with productivity and achievement for the producer class?

With the current retirement structure, large shifts from the working population into retirement can be anticipated, often at the expense of the potential contributions of the aged to social well-being. Not only is the ratio of the older to younger adults increasing but also the proportion of well-educated, healthy, and economically secure adults who are entering old age and who have the ability to continue to make significant contributions, but whose opportunities to do so may be limited. Concern over this growing disconnect between aged abilities, and the roles they are expected to fill, suggests we need urgent social policy reform. How can social policy increase the productivity of the aged and reduce the social and financial burden of supporting a growing older population? We need to develop better methods and strategies to integrate and keep aged citizens members of productive society. This leads to a key question: How will the large population of aged be able to live and function independently, carrying out activities and tasks essential to an acceptable quality of life?

Aging is marked by changes in physiology and psychological functioning, accompanied by difficulties in adjusting to new social conditions and everyday technologies. It also involves lost abilities such as visual acuity or physical impairment. There is a societal obligation to understand how the needs and abilities of individuals can change with age and create programs, strategies, and sensibilities to aid this growing segment of population and society. To maintain a positive self-image, the aged person must develop new interests, roles, and relationships to replace those that have become diminished or lost. Society should not demand declining involvement of its aging members. Rather, we should take measures to avoid the injustices of aging by continuing to apply the same norms to old age as it does to other ages in the negotiation of variables such as ethnicity, gender, lifestyle, and socioeconomic status.