Introduction: economics of an ageing world

In the 1950s, 1960s and 1970s there was great concern that the population of the world was growing too rapidly. This concern generated a series of books aimed at getting the over-population message across to a more general audience. Perhaps three of the most influential were Karl Sax’s Standing Room Only (1955), Paul Ehrlich’s The Population Bomb (1968), and Donella H. Meadows et al.’s The Limits to Growth (1972). This view of impending ‘doom and gloom’ is best exemplified by Ehrlich’s chilling warning: ‘mankind will breed itself into oblivion (p. xii)’. It is safe to conclude that much of what was predicted in these books has not happened. The fact that the global population growth rate is slowing is welcome news in the sense that many of the economic, social and environmental problems caused and/or exacerbated by population growth should lessen. However, decreasing population growth, driven by declining fertility and longer lifespans among other things, is creating a new set of problems—the populations of many countries are ageing rapidly. ‘Population ageing’ is the redistribution of relative population shares away from the younger to the older age groups, leading to an increase in the average or median age of the population. According to the United Nations (2005), there are only 18
‘outlier’ countries, where currently population ageing is not occurring. In this sense, population ageing is a global phenomena and not a ‘problem’ restricted to the highincome countries of Europe, North America, Australia, New Zealand and Japan.