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Aging Population Related to Macroeconomics
1. Aging Population Related to
Macroeconomics
JoHannah Momenee
ECN 231 - Principles of Macroeconomics
2. Why did I choose this topic?
Why did I choose this
topic?
3. Article: Which countries face the biggest policy
challenges of aging populations in Europe and
Central Asia?
4. The Challenge
“The ability of workers to pursue life-long learning and training so that they can remain
active and productive throughout their entire career” (Koettl).
• As the population of a nation becomes older and the gap between young and old
increases, the health of the population declines, then requiring the younger
generations to provide for social security (unsustainable public debt).
• When the populations age, voters age too. The interests are also shifted to the older
generation.
• Declining labor forces
5. Dependency Ratio
Visual
“This may hurt economic
growth and overall quality of life
if governments need to divert
public spending from education
and infrastructure investment to
finance programs for the elderly.
(Nikolova)”
Source: UK Department for Work and Pensions
6. Additional Effects on the Economy
• Transfer payments increase
• Increase in government expenditures (income security is under
half of this)
• Incentive to work decreases
• Incentive to invest and put money into the economy decreases
7. Solution – “Gradual Retirement”
Article: Two solutions to the challenges of population aging
• Allows continuity in tax revenues, reduced expenditure on
pensions.
• Valuable for organizations and younger colleagues
• Better health consequences
8. Citations
Nikolova, Milena. "Two solutions to the challenges of population aging | Brookings
Institution." Brookings. The Brookings Institution, 28 July 2016. Web. 19
Apr. 2017.
Koettl, Johannes. "Which countries face the biggest policy challenges of aging populations
in Europe and Central Asia? | Brookings Institution." Brookings. The
Brookings Institution, 13 Oct. 2016. Web. 24 Apr. 2017.
Graph Source: UK Department for Work and Pensions
