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Briefing to the Senate Special Committee on Aging May 21, 2007

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 ahayutin@stanford.edu.

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Briefing to the Senate Special Committee on Aging May 21, 2007

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  1. Why Population Aging Matters: A Global Perspective Briefing to the Senate Special Committee on AgingMay 21, 2007 Labor Force Implications and Pension Vulnerabilities Adele Hayutin, Ph.D. Director, Global Aging Project Stanford Center on Longevity ahayutin@stanford.edu

  2. Working-Age Population Growth, 2005-30 Shrinking (-29% to 0%) Moderate Growth (0% to 25%) Rapid Growth (25% to 50%) Too Fast (50% to 100%) Dangerously Fast (100% to 171%) Most advanced economies face shrinking workforces. The U.S. is an exception. Working-Age Population Growth, 2005-30 Source: United Nations 2004 medium variant forecast

  3. Shrinking labor forces will be the norm throughout Europe with only a few exceptions. Working-Age Population; 2005=1.0 US UK France Germany Spain Italy Note: Working age = 15-64 Source: United Nations 2004 medium variant forecast

  4. South Korea and Japan face steep labor declines while Asia's young countries will see strong gains. Working-Age Population; 2005=1.0 Pakistan Philippines India Mexico US China South Korea Japan Note: Working age = 15-64 Source: United Nations 2004 medium variant forecast

  5. Rapidly declining worker-retiree ratios will be especially burdensome for low-income countries. Ratio of Working-Age Population to Retirement-Age Population South Korea China Mexico India US Japan Notes: Working age = 15-64; retirement age = 65+ Source: United Nations 2004 medium variant forecast

  6. There will be fewer and fewer workers per retiree. Ratio of Working-Age to Retirement-Age Population Source: United Nations 2004 medium variant forecast

  7. Age Mix (millions) Total Population (millions) 23% 65+ 15-64 15-64 <15 <15 65+ The US has a growing supply of future workers. Source: United Nations 2004 medium variant forecast

  8. Japan Germany -19% -33% 15-64 15-64 65+ 65+ <15 <15 Japan and Germany face large workforce declines. Age Mix (millions) Source: United Nations 2004 medium variant forecast

  9. China's workforce peaks in 2015, while India faces continued strong growth. Age Mix (billions) China India 15-64 15-64 <15 <15 65+ 65+ Source: United Nations 2004 medium variant forecast

  10. Older countries face shrinking workforces; young countries face quadrupling of the older population. Age Mix (billions) Less Developed Countries More Developed Countries 15-64 15-64 65+ <15 <15 65+ Source: United Nations 2004 medium variant forecast

  11. In most cases, productivity gains will be too small to offset large workforce declines. Average Annual Growth in Labor Productivity, 1995-2003* *Data for China and Brazil 1995-2001 Source: The Conference Board and Bart Van Ark, 2002 & 2004

  12. Age 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Total Population = 275.3 million Total Labor Force = 140.9 million 7% 19% 59% 83% 85% 85% 78% 42% 10 5 0 5 10 Increased labor force participation could boost labor supply & help reduce dependency burden. U.S. Population and Labor Force Participation by Age, 2000 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

  13. Labor force participation of men aged 60-64 has declined despite their increased life expectancy. % Change, 1960 to early 2000s %Chg in Life Expectancy Men at Age 65 %Chg in Labor Force Participation Men Age 60-64 Source: David Wise, U.S. State Department Summit on Global Aging, March 15, 2007

  14. PUBLIC PENSION INCENTIVES TO LEAVE THE LABOR FORCE FOR MEN IN 11 COUNTRIES Percent 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.

  15. Young Adults (15-29) as % of Total Adults, 2005 0% to 25% 25% to 35% 35% to 45% 45% to 55% Over 55% The "youth bulge" is greatest in Africa and the Middle East. Young Adults (15-29) as % of Total Adults, 2005 Source: United Nations 2004 medium variant forecast

  16. Urban Population Growth, 2005-30, Percent per year < 1.0% 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 populations are projected to grow fastest in the poorest countries. Urban Population Growth, 2005-30 Source: United Nations, World Urbanization Prospects 2003 Revision

  17. Please do not distribute, print or copy this file without written permission of the author.

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