Though populations in Western countries are getting older, the proportion of young people in developing countries is extremely high. There are no fears of a future labor shortage because of this. However, Western economies will probably face higher unemployment and lower tax revenue if they do not employ older citizens.
Countries that go through boom times seem to end up with societies that do not produce enough children to "even out" the general population over time. A case in point is Japan. It was a strong economy from the 1960s. Now it is struggling but the propensity not to have children persists. Savings were high in Japan. Elderly people have already sold off assets that they had accumulated to fund their retirement. Savings have fallen from 15 per cent of GDP to only 3 per cent. Baby boomers experienced the highest standard of living ever so they had the opportunity to save. Younger Japanese workers today do not have the income surplus to put aside for their retirement.
One thing that at first seems a negative could prove to be a positive. Developed countries will not able to afford to pay government funded pensions. Older people will be forced into the workforce. Governments will have to back this up with strong health systems in order to keep elderly workers healthy enough to be able to maintain employment. To ease matters developed countries will have to follow Australia's lead and rely on immigration for population growth.
Countries that go through boom times seem to end up with societies that do not produce enough children to "even out" the general population over time. A case in point is Japan. It was a strong economy from the 1960s. Now it is struggling but the propensity not to have children persists. Savings were high in Japan. Elderly people have already sold off assets that they had accumulated to fund their retirement. Savings have fallen from 15 per cent of GDP to only 3 per cent. Baby boomers experienced the highest standard of living ever so they had the opportunity to save. Younger Japanese workers today do not have the income surplus to put aside for their retirement.
One thing that at first seems a negative could prove to be a positive. Developed countries will not able to afford to pay government funded pensions. Older people will be forced into the workforce. Governments will have to back this up with strong health systems in order to keep elderly workers healthy enough to be able to maintain employment. To ease matters developed countries will have to follow Australia's lead and rely on immigration for population growth.
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