Pension

Ageing planet: the new demographic timebomb | Population


In Japan even criminals are getting old. In the country’s notorious yakuza crime syndicates, more than half of members are now over 50, according to the national police agency.

Veterans who have passed 70 outnumber those in their 20s by two to one, even though younger men are the groups’ traditional source of “muscle”.

Japan is a pioneer in adjusting to the skewed demographics of an ageing society, with the impact of its low birthrates exacerbated by a fierce resistance to immigration. But its dilemmas are increasingly shared around the world.

India may be on the brink of becoming the world’s most populous country, with more than 200 million new citizens expected to be born in the next two decades. But in some parts of its more prosperous south, it is already greying.

In the coastal state of Kerala, just 5.1% of the population was over 60 in 1961, below the national average. By 2025, it is expected to be one in five, with a corresponding drain on the state’s finances.

As it struggles with an increasing number of destitute elderly, the government is planning to give the state new powers to seize property that parents had handed over to their children, if the older generation is not being well cared for, and return it.

Policymakers are also grappling with how to reverse a grim trend that has turned Kerala into a destination for families who travel from parts of the country even less prepared for a greying population, to abandon sick elderly relatives; a scheme called “Prathyasa” (Hope) aims to send back them to their home states.

The challenges facing Kerala and Japan are increasingly common across much of the world, where families are getting smaller, and people are living longer.

Falling fertility and falling mortality combine to speed up overall ageing of a population. By the middle of the century, a majority of countries still enjoying the demographic dividend of youth will be in sub-Saharan Africa, UN figures show.

Elsewhere, across Asia, Europe and Latin America, governments will need to support fast-rising numbers of old and vulnerable citizens. Very few countries have started making the social, political and physical changes needed, even though it is not a challenge that has crept up on politicians.

Demographic changes play out in slow motion. Data on birthrates give governments and scientists decades of warning about how their population will shift, barring major catastrophes such as war.

Sugamo, a neighbourhood in Tokyo that is popular with older shoppers.
Sugamo, a neighbourhood in Tokyo that is popular with older shoppers. Photograph: Justin McCurry/The Observer

“Purposeful planning would work better than after-the-fact patchwork,” said Eileen Crimmins, chair of the University of Southern California, Leonard Davis school of gerontology.

Yet finding money to pay for the care of older people involves reallocating resources, which is usually painful – whether it is the Keralan approach of ring-fencing older people’s assets, or efforts by western governments to keep people working for longer.

In France last week, workers took to the streets in strikes and protest over government plans to raise the pension age by two years, to 64.

For all the deep anger, that is still younger than the retirement age in the UK and the US, where officials had already pushed back the age at which people can stop work.

“The French situation appears to be an example of making things difficult for yourself,” said Crimmins. The policy change was hitting people already gearing up for retirement, who felt the personal impact on their life plans, she said.

“In the US (which is certainly not an example of good policy), the retirement age for baby boomers was raised in the mid 1980s when none of them cared a bit about retirement, and were not looking. Now people are surprised that it is not 65 when they get there.”

When pensions were first introduced in the 19th century, making it to your 60th birthday was statistically equivalent to making it past 100 today, says Sarah Harper, professor of gerontology at the University of Oxford.

Limited changes to pension age have not kept pace with that rapid increase in life expectancy, even in places stricter than France. Many lucky baby boomers in the UK and US with generous pensions based on their final salary have enjoyed decades of leisured retirement and good health.

A handful of the most fortunate could spend their entire careers with one company, retire early, live into their 90s and thus spend more years on the HR pension roll than they did on the pay roll.

Even today, longer lives and the prospect of early retirement could mean decades as a pensioner. A shrinking number of young workers cannot keep a growing pool of older retirees financially afloat.

An elderly man works out on an exercise machine at a park in Shanghai.
An elderly man works out on an exercise machine at a park in Shanghai. Photograph: Aly Song/Reuters

“We live in a society where we are saying to young people, ‘stay in education to your mid-20s, you can retire (early) in your mid-50s, and you may well live well into your 90s’. So that’s only a third of your life being active and contributory and that clearly doesn’t make sense in the modern world,” Harper said. “We are all going to have to work longer.”

That may not be unwelcome for everyone. Recent research across 20 countries showed that “many older people actually don’t want to retire completely”, she said, because of the income, fulfilment and status that can come from work.

What they do want and need is more flexibility, often to take on caring roles. One side-effect of an ageing population is the growing number of “grey” carers, older people who look after even older relatives.

In the UK, that includes a surprising number of older men looking after their wives. Although men still die younger than women, anti-smoking campaigns, particularly from the 1980s on, have had a significant impact on the mortality rates from strokes, heart attacks and cancer, Harper said.

Women tend to be frailer than men when they age, so as men survive longer, they are more likely to take on a carer role into their 70s, even though traditionally the majority of care for the elderly – as for children – has been performed by women.

Countries where state provisions of care are weak, or that lack protection for carers trying to work while looking after the very young or very old, may be particularly vulnerable to the impact of an ageing population.

China last week announced its population had fallen for the first time since the 1960s. The quickly growing cohorts of young students and workers had powered decades of economic growth, even as a government worried about overpopulation enforced a punitive, often abusive one-child policy.

Now as growth slows, and the population ages, the government has abruptly switched course and is trying to encourage more siblings.

But preferences shift slowly, and China is one of many places where a misogynist society extracts a heavy penalty on women who become mothers.

Almost universally, when women have access to education and economic opportunities, they choose to have fewer children. If their careers suffer, and they carry a disproportionate burden of childcare, there are likely to be even fewer babies.

“We do know that if you want to raise the fertility rate from say 1.3 up to 1.8 [children per woman], which is the difference between, say, Greece and Scandinavian countries, if you provide good-quality childcare, women will take that leap and have that second or third child,” Harper said.

The difference between whether women on average have one or two children can be the difference between a population that spirals downwards and one that stays relatively stable.

In Japan, the rate is also 1.3, and has shown no sign of budging for years. Decades of gimmicks and campaigns have failed to resonate with couples, and the government has belatedly accepted that more financial help may have more impact than lectures from conservative politicians on a woman’s patriotic duty to give birth.

About 3,000 people demonstrated in Cahors, France this month against the pension reform project.
About 3,000 people demonstrated in Cahors, France this month against the pension reform project Photograph: Prezat Denis/ABACA/REX/Shutterstock

In his first major policy speech of this year, the prime minister, Fumio Kishida, said he had ordered ministries to work together to take “unprecedented, decisive and bold” measures to tackle the low birthrate, which officials labeled a threat to “the very survival of the nation”.

He has promised a rise in child allowance, an expansion in after-school childcare, and reforms that will make it easier for parents to take leave to raise families – all funded by a promised doubling in spending on children that will be finalised in June.

While they sidestep serious discussion of immigration and a new approach to work-life balance, the national and local governments have put their faith in offers of hard cash, targeting residents of Tokyo and other big cities who complain about the prohibitive costs of bringing up children.

The Tokyo metropolitan government plans an ¥11bn (£70m) programme to make nurseries free for all second-borns, starting in October 2023, which would benefit 50,000 children. It is also considering giving ¥5,000 a month to all under 18s to help with their education costs.

“These are projects the central government should be addressing, but we decided to offer our own support, as there’s not a moment to waste,” the Tokyo governor, Yuriko Koike, said.

Looming over questions of ageing is the role of inequality, between countries and within them. In the UK and the US, being wealthy adds nine healthy years to life expectancy, recent studies found.

Advances in medical science, and the obsession some of the wealthiest in the west have with immortality, may exacerbate these differences further, not only within countries but across borders.

If the wealthy live longer, could the burden on the healthy young get even bigger? For all the alarmist political rhetoric, a shrinking population should not be seen as calamity, any more than fast growth has been.

Discussions of population size have always been an easy trigger for moral panic – whether people think there are too many babies or too few.

British cleric Thomas Malthus gave his name to the theory that growing populations will outpace resources two centuries ago. The fact that he has been proved wrong for many decades, the forecast “tipping points” for social collapse by famine and conflict having never arrived, hasn’t stopped the theories gaining regular traction.

One of the obvious ways of dealing with shifting demographics is encouraging migration. This can lead to a dangerous brain drain – the UK has a red list of countries where it should not recruit health workers, because luring them to Britain devastates local healthcare systems.

But if workers are given rights and training, it can serve as an effective way to shift both capital and expertise from rich areas to poorer ones.

And in a world facing climate catastrophe and a worrying fall in biodiversity, that is a much better way to address the challenges of ageing populations in some areas, than unfettered population growth that is dangerous for both us and the planet.

“We are in transition across the 21st century and need to adjust to this age-structural transition, rather than fight it,” Harper said. “So that every generation, every cohort, more or less replaces itself.”

Additional reporting by K A Shaji in Thiruvananthapuram



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