Apr 4, 2021
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Old but not great. Why aging is more terrible for humanity than atomic war

China has announced that it will raise the retirement age to 65. Why can’t even the most successful countries do without it?

How population aging will affect the 21st century on the lives of people of different ages? And how dangerous is this process for Russia? “AiF” discussed these problems with ch. Researcher of the Institute of World Economy and International Relations, Corresponding Member of the Russian Academy of Sciences Rostislav Kapelyushnikov

Retired planet

Alexey Makurin, AIF: There are scientists who argue that aging of mankind, or aging, is an even more serious threat to the world than the proliferation of nuclear weapons. Rostislav Isaakovich, is everything really that dramatic?

Rostislav shlyapnik: According to the UN forecast, by 2050 the share of 65+ people in the world may double, and by 2100 – triple and reach almost 30%. The main reasons are a drop in the birth rate with a simultaneous increase in life expectancy. All countries will age at different rates. And no one today knows how society and the economy will be able to adapt to this process.

The biggest problems are created by the inability to the new situation of solidarity, or, as we call them, pay-as-you-go pension systems. In a world where one in three is a pensioner, one worker will have to support several non-working fellow citizens, which is fraught with a drop in living standards. And the favorable time has already been missed when solidarity systems could be replaced with minimal costs with alternative structures combining elements of accumulative and private pension schemes. During the transition period, both the former and the latter will have to be financed simultaneously. And the elderly population is already too large for society to withstand the double burden without shocks.

– How do governments behave in such a situation?

– Delay the solution of the problem. The retirement age is being raised, although it is clear that it is impossible to raise it indefinitely. Contributions to state social funds are increased. But it is known that payroll taxes impede the growth of wages themselves. As a result, people in active working age have less desire to work harder and more productively. There is a huge brake on the economy and income growth. And he’s not the only one.

There are more workers ending their careers, for whom it often makes no sense to strain at work and master new knowledge. Economies with an increased proportion of older people are at risk of lagging behind in terms of productivity. And the most dangerous thing is that their innovativeness, dynamism, and entrepreneurial spirit decrease. After all, new ideas and projects are often born among young people.

A generational conflict over limited state resources may also arise. Older voters will begin to dominate and pull the budget pie over themselves, nominating politicians who pass laws in their favor. And this also threatens stagnation, since the economy is driven forward primarily by the young.

“At the same time, the elderly have a great experience. Doesn’t anyone need him anymore?

– Very much needed! Research shows that companies where one age group complements another are most successful. The same applies to countries. Difficulties arise not in connection with aging as such, but with the need to adapt to new demographic realities. For example, a lot depends on the structure of employment. It is known that closer to retirement, individual productivity falls among industrial and construction workers, whose work is associated with physical exertion. Banking and commercial employees, electronic engineers do not have such a dependence. For lawyers, managers, teachers, doctors, productivity even increases with age. And it is expected that in the coming decades, as robotization and other technologies develop, the proportion of occupations that are unfriendly to older workers will gradually decline.

– The number of the older generation is highest in the most successful countries. How does this affect their development today?

– Analysis of economic statistics of 21 developed countries for 1990-2007. showed that each successive percentage increase in the proportion of older people was worth a drop in the annual GDP growth rate by 0.14%.

But, firstly, the role of demographic factors in the development of the economy should not be absolutized. These countries have a number of other advantages that made them leaders in the 20th century. and will retain their positions in XXI. Secondly, no country has previously found itself in such a demographic situation as it will be at the end of the century. Nobody knows what level of population aging will become critically dangerous.

How China punished itself

– Which countries are facing the biggest problems?

– By 2100, South Korea and Japan are projected to have the highest elderly population at almost 36% (see infographic). The population of the leading European countries will noticeably age, and most of all in Brazil (from 9.5 to 33.5%) and China (from 12.2 to 31.7%). However, the consequences of this will be different everywhere. In some countries, older people prefer to work longer, in others they prefer to retire earlier. In some countries, older people consume more than young people, in others – the same or even less. Somewhere old people are primarily supported by families, somewhere the main source of income for pensioners is the state, and somewhere – previously accumulated assets: personal savings, securities, real estate. And in countries of the latter type, the costs of aging will be lower.

Click to enlarge.
Click to enlarge

China has dug its own demographic hole with its One Family, One Child policy. And this will negatively affect everything. Now the PRC leadership has abandoned artificial birth control. But there is no other way out to solve pension problems, like raising the retirement age.

In general, attempts by governments to intrude with scrap into the processes associated with the birth of children lead to nothing good. In India, the birth rate has now dropped to fairly low levels without any government intervention. Because there is a pattern: as well-being grows, people in the country prefer to have fewer children, but more educated and healthy ones.

– What awaits the USA?

– The situation there is better, as this country still receives many migrants, including many young people. And the birth rate in the United States is higher than in other developed countries. Why? It’s hard to say exactly. But I can assume that this is due to the high proportion of people of non-European origin among the population, whose culture encourages fertility.

– That is, the most effective way to combat aging is migration?

– No. With its help, the process can only be slowed down. After all, yesterday’s migrants will grow old too. Population aging is the inevitable future of all humanity.

– And the programs to stimulate the birth rate will not give the desired effect?

– Benefits that governments give families can have a positive impact on the quality of the younger generation – their health and education, but not their quantity – at least in the long term. In Russia, maternity capital increased the birth rate only for a short time. And then the statistics went down again. Women did not give birth anymore, but only accelerated the appearance of children.

Perspective for Russia

– How fast will the Russian population age in this case?

– In the coming decades, pretty quickly. But in the middle of the century, when the proportion of the elderly rises from the current 15.5% to 24%, this process will stop. And by 2100 the situation will be no worse than in the United States, and much better than in other large countries.

– Why are we so lucky?

– Russia is characterized by the rise and fall of demographic waves. In our country, due to wars and other shocks, the ratio between age groups of the population has sharply changed in previous years, and the country will continue to feel the echo of these changes. It is hoped that the ratio between older and working citizens will stabilize when the current decline in the proportion of youth is over.

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