The Surprising Implications of an Aging Population

The world's demographics are changing. Across all countries and particularly developed markets, populations are getting old. So what will global aging mean for our economic future? I'm Allison Nathan, and this is Goldman Sachs Exchanges. Today, I'm sitting down with my colleague, Kevin Daly, co head of the economics team covering Central And Eastern Europe, The Middle East, and Africa within global macro research. Kevin, welcome back to Exchanges.

Thank you very much, Alison. Good to see you. So,

Kevin, you've done a lot of work around your path to 2075 series looking at what the global economy could look like in fifty years from now. And you recently released a report about global aging. It's no secret that the global population is aging, but first, give us the facts behind that. What measure do you look at to determine this, and what does it show?

I mean, Alison, however you measure it, the global population is aging. So if you look at median ages in developed economies, fifty years ago, the median age was 30. Now it's 43. Over the next fifty years, that's expected to rise to 47. For emerging economies, they're significantly younger, but the median age there has also risen from 19, to 30 currently and is projected to rise to 40 over the next, fifty years. The other way that economists like to look at it is to look at developments in the working age ratio. So what is the share of the population that is between the ages of 15 to 64? For d

So what's driving that process of population aging?

So, I mean, there's two developments. There's increased longevity and declining fertility. I mean, on increased longevity, life expectancy has risen, in the, what demographers called the longevity frontier. So this is the the country with the with the highest, longevity in the world. And it's you know, in in a hundred years ago that was Australia, and the life expectancy was 63. And fifty years ago, that that country was Iceland with a life expectancy of 75. Currently, the country with the highest life ex expectancy in the world is Hong Kong with eighty six years. If if you look at that trend

So let's take those in turn. I mean, first of all, longevity. Isn't it a good thing that we are living longer? I mean, we're all striving to live longer. I mean, in some ways, that is, you know, the product of innovation and technological advancement and everything else is is to be able to live longer. No.

I mean, it is I mean, it's a very basic point, but it's a very good one. And it's one that I think a lot of economists often miss is that the fact that we're living longer, and not only longer, but also healthier lives is is a fantastic, testament to the, you know, the pro the scientific, progress that we have made over the last, you know, couple of centuries. And as as I say, it's not just that we're living longer, we're also living healthier lives as well. There was a a very comprehensive study done by the IMF recently published, which looked at, 50 year olds over the last quarter of a centu

That's really striking actually, even in the year February, which is, you know, very fresh in our memories that we have had such a big improvement. Very interesting. It's