briefing to the senate special committee on aging may 21, 2007
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Why Population Aging Matters: A Global Perspective. Briefing to the Senate Special Committee on Aging May 21, 2007. Labor Force Implications and Pension Vulnerabilities. Adele Hayutin, Ph.D. Director, Global Aging Project Stanford Center on Longevity [email protected]. - PowerPoint PPT PresentationTRANSCRIPT
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Briefing to the Senate Special Committee on Aging
May 21, 2007
Adele Hayutin, Ph.D.Director, Global Aging Project Stanford Center on Longevity
Why Population Aging Matters: A Global Perspective
Labor Force Implications and Pension Vulnerabilities
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2Most advanced economies face shrinking workforces. The U.S. is an exception.
Source: United Nations 2004 medium variant forecast
Working-Age Population Growth, 2005-30
Working-Age PopulationGrowth, 2005-30
Moderate Growth (0% to 25%)Rapid Growth (25% to 50%)Too Fast (50% to 100%)Dangerously Fast (100% to 171%)
Shrinking (-29% to 0%)
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3
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Working-Age Population; 2005=1.0
France
Italy
US
UK
GermanySpain
Note: Working age = 15-64Source: United Nations 2004 medium variant forecast
Shrinking labor forces will be the norm throughout Europe with only a few exceptions.
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4
0.00.20.40.60.81.01.21.41.61.82.0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Working-Age Population; 2005=1.0
Note: Working age = 15-64Source: United Nations 2004 medium variant forecast
China
Philippines
Pakistan
South KoreaJapan
US
India
South Korea and Japan face steep labor declines while Asia's young countries will see strong gains.
Mexico
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5
0
5
10
15
20
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Rapidly declining worker-retiree ratios will be especially burdensome for low-income countries.Ratio of Working-Age Population to Retirement-Age Population
South Korea
India
China
Japan
Notes: Working age = 15-64; retirement age = 65+Source: United Nations 2004 medium variant forecast
US
Mexico
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6There will be fewer and fewer workers per retiree.Ratio of Working-Age to Retirement-Age Population
16.2
15.711.912.0
14.8
10.85.4
11.94.1
9.3
3.33.4
13.310.7
8.57.3
7.08.2
5.3
5.82.9
4.12.7
2.01.9
9.76.64.74.53.73.53.43.33.02.92.62.61.61.41.4
11.9
7.6
15.1
6.6
3.3
0 2 4 6 8 10 12 14 16 18
AfricaPakistan
PhilippinesIndia
IndonesiaIran
VietnamBrazil
USMexico
UKChina
S. KoreaItaly
Japan
205020302005
Source: United Nations 2004 medium variant forecast
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7
Source: United Nations 2004 medium variant forecast
The US has a growing supply of future workers.
0
50
100
150
200
250
300
1950 1975 2000 2025 2050
Age Mix (millions)
15-64
<15
65+
23%
0
50
100
150
200
250
300
350
400
1950 1975 2000 2025 2050
Total Population (millions)
<15
65+
15-64
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8Japan and Germany face large workforce declines.
Source: United Nations 2004 medium variant forecast
Age Mix (millions)
0
25
50
75
100
1950 1975 2000 2025 2050
Japan
-33%
15-64
<15 65+
0
15
30
45
60
1950 1975 2000 2025 2050
Germany
-19%
15-64
<15 65+
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9China's workforce peaks in 2015, while India faces continued strong growth.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1950 1975 2000 2025 2050
15-64
<15
65+
Source: United Nations 2004 medium variant forecast
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1950 1975 2000 2025 2050
China India
Age Mix (billions)
15-64
<15
65+
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10
0.0
0.2
0.4
0.6
0.8
1.0
1950 1975 2000 2025 2050
More Developed Countries
15-64
<1565+
Source: United Nations 2004 medium variant forecast
Older countries face shrinking workforces; young countries face quadrupling of the older population.
0.0
1.0
2.0
3.0
4.0
5.0
1950 1975 2000 2025 2050
Less Developed Countries
15-64
65+
<15
Age Mix (billions)
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11
10.1%
7.7%
4.9%
3.7%
2.2%
1.9%
1.8%
1.7%
1.3%
1.9%
0% 2% 4% 6% 8% 10% 12%
ChinaBrazil
IrelandS. Korea
JapanUS
GermanyUKEU
Mexico
Source: The Conference Board and Bart Van Ark, 2002 & 2004*Data for China and Brazil 1995-2001
Average Annual Growth in Labor Productivity, 1995-2003*
In most cases, productivity gains will be too small to offset large workforce declines.
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12
Population in millions by five-year age bracket; males on left, females on right.Source: US Bureau of the Census and Bureau of Labor Statistics
Increased labor force participation could boost labor supply & help reduce dependency burden.
10 5 0 5 10
Total Population = 275.3 millionTotal Labor Force = 140.9 million
85%
85%
83%
59%
19%
42%78%
7%
Age100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4
U.S. Population and Labor Force Participation by Age, 2000
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13Labor force participation of men aged 60-64 has declined despite their increased life expectancy.
-14%
-29%
-51%
55%
30%
30%
37%-77%
-80% -60% -40% -20% 0% 20% 40% 60%
JapanCanadaSweden
USUK
SpainItaly
GermanyDenmark
NetherlandsBelgium
France
Source: David Wise, U.S. State Department Summit on Global Aging, March 15, 2007
% Change, 1960 to early 2000s
%Chg in Labor Force Participation Men Age 60-64
%Chg in Life ExpectancyMen at Age 65
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PUBLIC PENSION INCENTIVES TO LEAVE THE LABOR FORCE FOR MEN IN 11 COUNTRIESPercent of men age 55 to 65 not working
Source: Gruber J, Wise DA, eds. Social Security and Retirement around the World. Chicago, IL: University of Chicago Press, 1999. Reproduced from Why Population Aging Matters, NIA 2007.
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15The "youth bulge" is greatest in Africa and the Middle East.
Source: United Nations 2004 medium variant forecast
Young Adults (15-29) as % of Total Adults, 2005
0% to 25%
25% to 35%
35% to 45%
45% to 55%
Over 55%
Young Adults (15-29) as % of Total Adults, 2005
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16Urban populations are projected to grow fastest in the poorest countries.
Source: United Nations, World Urbanization Prospects 2003 Revision
Urban Population Growth, 2005-30
1.0% to 1.5%
1.5% to 2.0%
2.0% to 3.0%
3.0% to 4.0%
4.0% to 6.0%
Urban Population Growth, 2005-30, Percent per year
< 1.0%
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