The ‘maturing’ of global societies is certainly a major achievement for medical sciences, with people today living far longer and healthier lives than previous generations. This demographic change offers opportunities to harness the experience, expertise and creativity of such an historically large number of older people.
The phenomenon of an ageing population creating social and economic worries became apparent first in rich industrialised countries in North America, Western Europe and Japan. As birth rates dropped and advances in medical sciences and better life quality allowed people to live longer, it caused a decline in work-age population, increased health care and ballooning pension budgets. More importantly, they have now started to change the demand drivers within the economy, for better or worse, we still don’t know.
With ageing populations becoming a reality in most of the developed world, the question now being raised is how we can harness the experience, expertise and creativity of such a historically large number of older people towards raising overall productivity without curbing employment opportunities for the youth.
Ageing is a phenomenon which is affecting largely the affluent countries. In 2015, only three countries- Germany, Italy and Japan- had 20% or more of their population over 65 years old. By 2020, 13 countries will be in this category and this number will rise to 34 countries by 2030. UN statistics have used the old-age dependency ratio to work out the ratio of the aged population to the working-age population, fixing the aged population’s median age at 65. This ratio has been on a rampant rise over the last few decades- 2005 (11.3), 2010 (11.7), 2020 (expected 14.4) and 2030 (expected 18). This is a global average which will vary from country to country.
However, countries like India, Brazil and some other developing economies have a huge pool of youths which is just entering the working population and can add to their human resources dividends. India stands to gain immensely from the ‘ demographic dividend” if it is properly managed. India’s working-age population (aged between 15 and 64 years) has grown larger than the dependent population (below 14 and above 65) since 2018. This youth bulge is going to last till 2055. Japan, China and South Korea were able to leverage this demographic dividend in a most effective manner to reach their current level of growth.
The corporate world also looks at hiring afresh / extending services of older employees with a jaundiced eye. The perception that ageing is often associated with a decline in cognitive abilities – the brain’s ability to learn and remember skills and to problem solve. With multitasking now a common feature of many jobs, there is a view that older workers may be less competent in handling the demands of the work-place. The expectation is that older employees are less motivated, unwilling to involve themselves in learning new skills and are therefore less likely to be innovative. The fear is that when older workers are less willing to adapt to change, this may hold companies back in meeting new challenges.
This thought process needs to change as the overall fitness, both physically and mentally, has drastically improved over the years due to excellent health care, improved lifestyles, greater awareness of overall physical wellbeing. Add to this the advantages of experience gained over three to four decades, a mature outlook and a sense of innate satisfaction in those with a reasonably successful career, we are looking at a workforce which can add value to any organisation at the middle and upper echelons. Where required, renewal of skills to match current work cultures could be facilitated.
The demand side of the economy is vital to its growth. With ageing populations, this demand side is undergoing radical changes. The demand drivers for senior citizens is vastly different from that of working-age people- they buy health care products and invest in retirement homes/ old age sanatoria. Economies will have to make the necessary adjustments/ transitions to take advantage of the purchasing power of senior citizens. In India, this trend has been noted and online businesses have happily reported rising profits from sales to this segment which has started to have sufficient surplus income to indulge in shopping.
- The trend to encourage immigration of only highly skilled workers, as prevalent in Northern America and Australia may change once the shortage of even basic labour is felt. Countries like Singapore, Lebanon and the Gulf countries have been importing manual labour for years to work in their factories, homes, farms and infra construction businesses. India with a large working population stands to gain as it would be in a position to meet the demand unless robotics and AI can close the gap between demand and supply.
- The retirement ages, with improved overall health, is bound to be increased from 60 to 65 and even up to 70 at some later stage. This will reduce the pension bill, keep the higher taxes coming for a longer period and reduce the need for imported workers. However, in countries like India, this may not be practical at least while the youth bulge exists as it reduces the employment opportunities for the younger generation.
- Does the aged population remain relevant to society and the nation or are they just burdens? In this context, the quote of Goldie Hawn is worth understanding-“ “What helps with ageing is serious cognition — thinking and understanding. You have to truly grasp that everybody ages. Everybody dies. There is no turning back the clock. So the question in life becomes: What are you going to do while you’re here”
- Society and the Governments must see the aged population as an asset and provide opportunities to remain in the workforce longer as well as engage in volunteering, creative activities, mentoring and relieve both the social and economic pressures generated by them.
As per a statement made by the government in the Parliament, India will have approximately 34 crore people above 60 years by 2050; this is more than the total population of the US! Therefore, it makes sense to look at this huge segment of the population as an asset rather than a millstone. We need to, if necessary, re-jig their skills and ensure that they find a useful slot in the job market and earn into their old age, rather than merely living off an increasing pension and healthcare burden on the exchequer.