Takeaways - 2017 UN World Population Aging Report

[A new year is upon us. As usual, I have set a few personal goals/challenges for the year. One of these goals/challenges is to read one long-form research paper every week and publish the key takeaways here. I see three benefits of doing this:

1. It will help me learn better. My personal experience is that knowledge will stay fresh in my mind much longer if I spend the time to take notes and summarize
2. It will make me a better writer. I'm a terrible writer, but the best way to improve is by doing
3. Most of these reports I intend to read are quite long. If someone within my network is interested in the same topic, but doesn't have the time to read the original report, I hope my articles can serve as some sort of "Executive Summary" for them

The topics I intend to write about are all related to my personal passions, so you will see a lot of articles on population aging, AI, China, future of work, etc. Of course if I come across some thought-provoking reports related to insurance, I will jump on them as well. Most of these reports should be freely available on the internet. All credits go to the original authors and any additional observations are my personal opinions only.

Without further ado, here is Article #1.]

Here is the Link to the original report.

https://www.un.org/en/development/desa/population/publications/pdf/ageing/WPA2017_Report.pdf

Introduction

Population aging is a global phenomenon. Regardless of a country’s economic condition, it will have huge implications on its social welfare programs, public and private retirement schemes, etc. It presents a challenge for the society, as most governments don’t have enough funding in their public retirement scheme and many individuals lack the financial disciplines to plan for a long retirement life. Equally importantly, how to meet the emotional need of the aging population will determine what kind of society we will live in. On the flip side, this demographic tectonic shift also presents opportunities for companies and entrepreneurs who are proactive in their thinking about treating the aging cohort as a brand new customer segment (with many sub segments underneath), and develop custom made products and services to empower these people to live a healthier and more fulfilling life.

Key Findings

Number of Older Population

First, they looked at current and projected number of older population. Here are some of the key findings:

• The global population aged 60 years or over numbered 962 million in 2017, the number of older persons is expected to double again by 2050, when it is projected to reach nearly 2.1 billion.
• Globally, the number of people aged 80 years or over is growing even faster than the number of older persons overall. Projections indicate that the number of people aged 80 or over worldwide will increase more than threefold between 2017 and 2050, rising from 137 million to 425 million.
• Two thirds of the world’s older persons live in the developing regions, where their numbers are growing faster than in the developed regions. In 2050, it is expected that nearly 8 in 10 of the world’s older persons will be living in the developing regions, and two out of every three persons aged 80 or over will live in the developing regions.

• Between 2017 and 2050, the number of older persons is expected to grow fastest in Africa with a projected 229 percent increase followed by Latin America and the Caribbean (161 percent), and Asia (132 percent).
• Lower income countries (especially in Africa) will have the highest percentage increase of 60 or over because the aging of the large cohort that were born between 1970-1990.
• On the other end, In half of the 61 high-income countries, the number of older persons was projected to grow by less than 60 per cent between 2017 and 2050, while the projected growth was greater than 100 percent in less than a third of high-income countries. Within the high-income group, projected growth in the older population tends to be higher in countries of Asia: (ex: Korea 104%, Singapore 137%). Japan’s projected growth is only 8% due to the very low fertility over a number of decades.

• By 2050, Asia will account for 61% of all 60 or over population, and 58% of all 80 or over population, with China accounts for about 40% of total Asia numbers. Already in 2017, nearly one in four persons aged 60 years or over and nearly one in five persons aged 80 years or over lived in China

• Globally, during 2010-2015, women outlive men by an average of 4.6 years. As a result, women accounted for 54 percent of the global population aged 60 years or over and 61 percent of those aged 80 years or over in 2017. In the coming years, average survival of males is projected to improve and begin to catch up to that of females so that the sex balance among persons aged 80 or over becomes more even. The proportion of women at age 80 years or over is projected to decline to 58 percent in 2050.
• Both improved longevity and the ageing of larger cohorts, including those born during the post-World War II baby boom, mean that the older population is itself ageing. The proportion of the world’s older persons who are aged 80 years or over among the older population is projected to rise from 14 percent in 2017 to more than 20 percent in 2050.

• The number of older persons is growing faster in urban areas than in rural areas. At the global level between 2000 and 2015, the number of people aged 60 years or over increased by 68 percent in urban areas, compared to a 25 percent increase in rural areas. As a result, older persons are increasingly concentrated in urban areas. In 2015, 58 percent of the world’s people aged 60 years or over resided in urban areas, up from 51 percent in 2000. Those aged 80 years or over are even more likely to reside in urban areas: the proportion residing in urban areas increased from 56 percent in 2000 to 63 percent in 2015.

Proportion of Older Population

Next, they looked at the proportion of older population, instead of the absolute numbers.

• Globally, the number of older persons is growing faster than the numbers of people in any younger age group. Consequently, the share of older persons in the total population is increasing throughout the world. While population ageing is a global phenomenon, the ageing process is more advanced in some regions than in others, having begun more than a century ago in countries that developed earlier, and getting underway only recently in many countries where the development process has occurred later, including the decline of fertility.
• In 2017, one in eight people worldwide was aged 60 years or over. By 2030, older persons are projected to account for one in six people globally. By the middle of the twenty-first century, one in every five people will be aged 60 years or over. (For Asia, it’s one in every four people)

• By 2030, older persons will outnumber children aged 0-9 years (1.41 billion versus 1.35 billion); by 2050, there will be more people aged 60 years or over than adolescents and youth aged 10-24 years (2.1 billion versus 2.0 billion).
• The ageing process is most advanced in high-income countries. Japan is home to the world’s most aged population: 33 percent were aged 60 years or over in 2017.
• Comparing 2017 and 2050 in the graph below, age 60 or over make up a bigger percentage of total population in most countries, regardless of their income level. This is evident by the clear upward moving trend of most countries when compared the bottom chart to the top chart below.

• The pace of world population ageing is accelerating. Projections indicate that the proportion aged 60 years or over globally will increase more than 4 percentage points over the next 15 years, from 12.3 percent in 2015 to 16.4 percent in 2030, compared to the 2.3 percentage point increase in the share of older persons that occurred between 2000 and 2015.

• In 2050, nearly half the world’s population will live in relatively aged countries, with at least 20 percent of the population aged 60 years or over, and one in four people will live in a country where more than 30 percent of people are above age 60.

• Currently, the pace of population ageing in many developing countries is substantially faster than in developed countries in the past. Consequently, today’s developing countries must adapt much more quickly to ageing populations and often at much lower levels of national income compared to countries that developed much earlier.

Examining the Drivers

There are three major driving forces contributing to the aging of global population: lower fertility rate, lower mortality rate and global migration. This report provided detailed analysis into each of these three drivers. Here are some charts that stood out.

• Lower fertility rate - Projections of future fertility indicate that rates in Africa will continue to fall towards 3.1 births per woman in 2045-2050. Fertility rates in Oceania, Asia and Latin America are also projected to decline, although only slightly, from their 2010-2015 levels, while those in Northern America and Europe are projected to increase, again only slightly from their 2010-2015 levels.

• Lower mortality rate - Life Expectancy continue to increase for all regions since 1950.

• International migration - Looking to the near future, international migration is projected to have only small effects on the pace of population ageing in most countries. It’s unrealistic for a country to rely on immigration to reverse the trend of population aging. Although, for one country in particular, the United States, immigration will help slow down the pace of population aging.

Living Arrangement of Older Population

Lastly, the report looked at the living arrangement of the older population.

• Across 143 countries or areas with available data, the proportion of persons aged 60 or over who live “independently”—alone or with a spouse only—varied widely, ranging from a low of 2.3 percent in Afghanistan to a high of 93.4 percent in the Netherlands.
• Of the world’s sub-regions, older persons’ co-residence with children was most common in South-Central Asia (73 percent), followed by South-Eastern Asia (66 percent). Independent living was most common for older persons in Western Europe (88 percent), followed by Northern Europe (83 percent).

• Data for 67 countries indicate that older persons have become more likely in recent decades to live independently (around 37 percent circa 2010 compared to 24 percent circa 1990), whereas co-residence with children has become less common (53 percent circa 2010 compared to 65 percent circa 1990).
• A shift away from co-residence with children and towards independent living has occurred in many countries of the developing regions as well, but co-residence with children continues to be the dominant living arrangement for older persons in these regions and it remains far from certain that they will see further shifts of the same magnitude as occurred in Europe and Northern America. Moreover, the persistent differences in the living arrangements of older persons across regions speaks to the resilience of traditional family structures and cultural norms in the context of demographic, economic and social change.