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Preparing for an Aging World
The world's population is aging at an accelerated rate. Declining fertility rates
combined with steady improvements in life expectancy over the latter half of the 20th century have produced dramatic
growth in the world's elderly population. People aged 65 and over now comprise a greater share of the world's population
than ever before, and this proportion will increase during the 21st century. This trend has immense implications
for many countries around the globe because of its potential to overburden existing social institutions for the
elderly. One popular view envisions global aging as a looming catastrophe, as populations top-heavy with frail,
retired elderly drain pension and social security funds, overwhelm health care systems, and rely for support on
a dwindling working-age population.
In Preparing for an Aging World: The Case
for Cross-National Research (Washington, D.C.: National Academy Press, 2001),
a panel of experts convened by the National Research Council (NRC), part of the National Academy of Sciences, examines
the issues surrounding global aging and their implications for policy and research. The report rejects alarmist
as well as complacent views of global aging. Though aging trends raise difficult issues, the report concludes there
is no crisis. Aging is gradual and its consequences tend to appear gradually and predictably. Thus policymakers
have time to deal with these issues before they become acute problems. Furthermore, because aging is at different
stages around the world, there are opportunities for nations to learn from each other's experiences. Taking advantage
of these opportunities will require cross-national planning and coordination of research and data collection.
A PROFILE OF GLOBAL AGING
Population aging refers to an increase in the percentage of elderly people (65 and
older). The number of elderly increased more than threefold since 1950, from approximately 130 million (about 4
percent of global population) to 419 million (6.9 percent) in 2000. The number of elderly is now increasing by
8 million per year; by 2030, this increase will reach 24 million per year. The most rapid acceleration in aging
will occur after 2010, when the large post­World War II baby boom cohorts begin to reach age 65.
The elderly population itself is also growing older. The "oldest old"
(80 and older) population is the fastest-growing group among the elderly. Levels of illness and disability among
this group far exceed those for other age groups, and thus the needs of this group are likely to increase substantially
in the 21st century.
In 2000, Italy was the world's "oldest" nation, with more than 18 percent
of its population aged 65 and over (compared with 8 percent in 1950). Also with notably high levels (above 17 percent)
were Sweden, Belgium, Greece, and Japan.
Among the world's regions, Europe has the highest proportion of population aged
65 and over and should remain the global leader in this category well into the 21st century. However, other regions
of the world will begin to age much more rapidly in coming decades: The percentage of those aged 65 and older in
Asia, Latin America and the Caribbean, and the Near East/North Africa will more than triple by 2050 (see figure
on next page).
AGING RAISES CRITICAL POLICY ISSUES
These shifts in global age structure highlight several areas in which policymakers
need a clearer understanding of aging's effects and the impacts of alternative policies. These areas include the
following:
Work, Retirement, and Pensions
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Global Aging, 2000 - 2050:
Percentage of Elderly by Region
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One of the most dramatic developments of the past 40 years
has been declining labor force participation among older people in many parts of the world. Public pension plans
in some countries have created incentives for older workers to retire, thus exacerbating the financial problems
posed by aging populations. There has also been a shift in many countries from pay-as-you-go retirement programs
to fully funded ones, as well as a shift toward private programs. It is important to disentangle incentives for
leaving the workforce, as well as to ensure a closer alignment between public and private pension programs. For
many developing nations that are now designing pension programs that have public as well as private components,
there are opportunities to learn from more-developed nations' experiences.
Private Wealth and Income Security
The need for income security during retirement--now an increasingly lengthy and
important segment of life for many--is an important concern in developed societies. Providing income security has
raised two critical policy challenges: (1) ensuring that individuals have sufficient income during retirement to
avoid a sharp decline in living standards and (2) ensuring that elderly people are sheltered from financial risks.
Policymakers need better data on the economic behavior of elderly populations, such as whether they continue to
save or begin to "dissave."
Transfer Systems
The well-being of older persons often depends on intricate systems of pecuniary
and non-pecuniary transfers associated with individual savings, family behavior, and, as in the case of many social
security systems, transfers from current workers to retired persons. Although considerable progress has been made
in understanding these transfer systems, gaps in our understanding remain. Particularly in need of study are interrelationships
across systems and a clearer picture of how changes in one system (such as public pensions) affect others. For
instance, do publicly funded programs crowd out private-sector or family-based transfers?
Health
The health of elderly populations is a critical issue and influences outcomes in
all of the other policy areas affected by aging. Evidence shows that disability is declining across countries,
which would suggest that more elderly people are leading longer and healthier lives. While all countries must address
the changing health needs of older citizens, the diversity of national health care systems points to the value
of comparable cross-national data on health care quality and outcomes, which to date have largely been lacking.
Well-Being
Overarching the financial and health status of older populations is the issue of
their well-being and quality of life--not simply in later years but from birth to death. Our understanding of this
issue would benefit from measures of subjective well-being that are sensitive to changes in well-being during major
life transitions, such as retirement.
CROSS-NATIONAL RESEARCH CAN INFORM POLICY RESPONSES
To address these gaps, the NRC panel recommended that nations coordinate data collection
and research in order to leverage resources and benefit from nations' collective experience. Specifically, the
panel identified several activities for pursuing an effective research agenda on aging:
- Develop multidisciplinary research designs to produce data on aging populations
that can most effectively inform policy choices.
- Conduct longitudinal research to illuminate the long-term interrelationships among
work, health, economic status, and family structure.
- Establish mechanisms that will help to harmonize and standardize data collected
in different countries.
- Emphasize the critical importance of cross-national research, organized as a cooperative
venture that will enhance the ability of policymakers to evaluate institutional and programmatic features of aging
policy.
- Consolidate information from multiple sources to generate linked databases.
- Create unhindered access to relevant data for the widest possible community of
scientists.
THE WINDOW OF OPPORTUNITY IS SHRINKING
The report emphasizes that the full effects of global aging are still decades away.
Therefore nations have time to develop and use research tools to guide future policies. However, considerable lead
time will be required to collect and interpret the kinds of data scientists need to understand the ramifications
of aging. Nations need to act promptly to develop strategies for generating policy- relevant information to guide
policymaking and to avoid the potential for a global "aging" crisis.
RB-5058 (2001)
RAND policy briefs summarize research that has been more fully documented elsewhere.
Unlike most RAND policy briefs, this brief describes work conducted outside RAND, in this case by the National
Research Council (NRC), and documented in Preparing for an Aging World: The
Case for Cross-National Research, ISBN: 0-309-07421-5 (pb). Copies of the
NRC report are available from the National Academy Press, 2101 Constitution Avenue, N.W., Washington, DC 20418,
or at http://www.nap.edu/. The NRC study was funded by the Behavioral and Social Research Program of the National Institute
on Aging. If you would like a copy of a CD-ROM that contains the full text of the NRC report Preparing for an Aging World: The Case for Cross-National Research,
as well as 11 other reports that the NRC has prepared for the National Institute on Aging, please contact the Behavioral
and Social Sciences Program, National Institute on Aging, 7201 Wisconsin Avenue, Room 533, Bethesda, MD 20892.
As part of its mission to synthesize and disseminate important population-related
research, RAND's Population Matters program produced this policy brief in consultation with the NRC. Population
Matters is sponsored by the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, the
Rockefeller Foundation, and the United Nations Population Fund. Population Matters publications and other project
information are available at www.rand.org/labor/popmatters. This research brief is also available in printed form.
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Source: Rand Corp
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