Getting Older but Not Poorer

• Author: David Amaglobeli, Era Dabla-Norris, and Vitor Gaspar
• Position: DAVID AMAGLOBELI is assistant to the director and VITOR GASPAR is the director of the IMF's Fiscal Affairs Department. ERA DABLA-NORRIS is a division chief in the IMF's Asia and Pacific Department.
• Pages: 33-36

March 2020 | FINANCE & DEVELOPMENT 31

As societies age worldwide, pensions and public policies must adapt

David Amaglobeli, Era Dabla-Norris, and Vitor Gaspar

GETTING

OLDER

BUT NOT

POORER

Unless you live in France, you might not thin k recent mass strikes over the

proposed pension reforms in that countr y have anything to do with you.

But given how fast demographics are cha nging around the world, that

would be a mistake. If you live in Eu rope and your parents are getti ng

ready to retire at the age of 65 (the statutory retirement age in ma ny countries), you

should know that today there are, on average, 3.4 working-age people to support

the retirement of every person 65 and older. By 2050, the year when you might be

expecting to retire, that number is projected to dwindle to just 2.

Japan is already nearly at t hat point. By 2050, more than 35 other countries (about

7 percent of the world population) will join Japan. is implies a signi f‌icantly higher

burden on workers to support retirees. is dra matic change wil l have important

economic and social implications t hat cannot be ignored either by governments or

by individuals.

is phenomenon is not conf‌ined to Europe or advanced economies more generally.

Aging is af‌fe cting all parts of the world, but to vary ing degrees. Two main factors are

contributing to this shif t in the age composition of the population: people are living

longer and having fewer child ren. Many countries in the Northern Hemisphere,

particula rly Japan, f‌ind themselves in a more advanced sta ge of this demographic

transition. Others, mostly in A frica, are in the early stage.