World to Experience Myriad Formidable Demographic Changes
In a broad overview of the global demographic issues explored in the latest issue of the IMF’s quarterly magazine, Bloom identifies a number of pressing problems, including:
• rapid population growth in some developing economies and the changing share of adolescents and young adults in others;
• increasing longevity and population aging, already occurring in advanced economies and soon to be a factor in almost every country;
• urbanization, which brings the benefits of large markets for both labor and goods and services, but also the pressures of environment degradation; and
• migration, which offers economic opportunities to migrants and host countries but faces political and social resistance in both destination and home countries.
Reforms required
None of these problems are insurmountable, according to Bloom. But they will require, among other things, reforms of retirement policy, global immigration policies, better techniques for dealing with population growth, and further improvements in child survival and treatment of chronic disease.
Populations are getting older and women are giving birth to fewer babies in much of the world. This combination of aging and shrinking populations portends large and growing fiscal burdens both in advanced economies, where the problem is already apparent, and in developing economies, some of which are already dealing with the issue. IMF economists Benedict Clements, Kamil Dybczak, and Mauricio Soto write that unless preventive steps are taken, spending on retirement and health care as a percent of GDP could rise to unmanageable levels by the middle of the century or even sooner.
Other articles in the demography cover package explore whether increasing the role of women in the workforce could offset some of the problems of aging and declining populations and how Africa, where the population is still growing, could reap economic benefits if it manages well the so-called demographic dividend that results from a growing working population relative to young and older age groups. Economists Mikael...
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