2050: The Impacts Of Aging Population

Population aging is set to be increasing by 2050. Many countries will be suffering a decline of GDP, growth rate and others from this aging population. The main factors of this process are low and declining fertility rate and increasing life expectancy. As the cost of living increases, people tend to have a smaller family to reduce cost of living. While the health care system is improving, people become healthier and it helps to increase the life expectancy. What are the impacts of the aging population on the economy context?

a) Labor Force Supply and Productivity

There will be a decline in the supply of labor force among the young populations as the total fertility rate decreases. The involvement of older generations is a good thing as it

Since it is not yet to occur and it has no historical episodes, the policy makers will find the best way to manage this issue. The right policies made can help the country to have a better position in dealing with economic, social and political effects due to the changes of population structure in the future. Different age structure will have different needs. Bloom, D.E., Cunning, D., and Fink. G., (n.d.) states that people with 60 and older will have different behavioural compare to the younger generations. The older generations will prefer health related products or services. So any changes or implication made on health sector have to be considered carefully that aging are solely depending on their

This population needs special and extra care of health as well as it costs lots of money since they need more medicine, procedures and treatments. Also, government have to consider in providing the latest technologies in health care for this population due to the increase in demand for health care. Government may need to review development priorities so that the government will not face a serious budget constraint. The government budget for public expenditures on education decreases as the fertility rate decreases but a higher allocation of budget is made on health and pension bills. Due to that, the consumption tax rate is increased to balance the government budget. For example in Australia, in the case of the medium projection scenario, the increase in the consumption tax rate is 42.75 per cent, from 10 per cent in 2007 to 14.28 per cent in 2053. (Kudrna,G., Woodland,