By Bruce Stokes, Special to CNN
Editor’s note: Bruce Stokes is director of global economic attitudes at the Pew Research Center. The views expressed are his own.
The inexorable aging of the U.S. population has been one of Washington’s rationales for raising the retirement age, reforming health care and cutting the government deficit and debt. Continuing policy debates driven by fears of the economic consequences of a graying society are almost inevitable.
But the fiscal and societal burdens of an aging America are far from unique. Indeed, when it comes to getting older, Europe and increasingly much of Asia face a far more challenging future in which there is a mismatch between demographics and slowing economic growth. Compounding the problem in some nations is public opinion, with expectations of government often out of synch with projected economic growth and the ability of states to foot the bill for their aging populations.
In 2010, 13 percent of the U.S. population was age 65 or older. By 2050, that proportion is expected to grow to 21.4 percent, according to estimates by the United Nations. But notable as those numbers are, they are even more dramatic in Europe – Spain’s retirement age population is expected to grow by about 17 points, to 34.5 percent, while Italy’s elderly population may increase by 13 points to 33 percent. Germany’s 65 and older population, meanwhile, is likely to expand by 12 points, to almost 33 percent.
Asian nations face even more daunting aging trends over the next few decades. In South Korea, those 65 and older are expected to make up 35 percent of the population, up by 24 percentage points, while China’s elderly population is likely to grow by about 16 points, to 24 percent. Japan, for its part, is projected to have the grayest population of all, with 37 percent being 65 or older, a rise of 13.5 points from 2010.
Faced with such formidable increases, publics in some of the most rapidly aging societies are far more likely than Americans to look to their governments to take care of them in their old age. Just 24 percent of Americans say that the government should bear the greatest responsibility for people’s economic wellbeing in their old age, according to a new Pew Research Center survey. In contrast, 56 percent of Italians, 55 percent of Spanish, 47 percent of Chinese and 36 percent of Japanese look to government as their principal caregiver in their twilight years.
Yet such expectations may face real fiscal constraints. In 2050, Italy is expected to spend 16 percent of its Gross Domestic Product (GDP) on public pensions, according to estimates by the International Monetary Fund. For Spain, the figure is 15 percent, while for Germany it is 13 percent. Difficult tradeoffs between pension outlays and other public spending may prove inevitable.
A number of Asian societies face similar – if not greater – challenges because their spending on the elderly, as a proportion of their economies, is expected to grow even faster.
South Korean public pension expenditures could grow from 1.7 percent of GDP in 2010 to 12.5 percent by the middle of the century, while Chinese outlays could increase from just over 3 percent to 10 percent of GDP. Such outlays raise the specter of tensions over competing priorities as countries are forced to reallocate resources.
By comparison, U.S. spending on public pensions, which was 6.8 percent of GDP in 2010, is expected to reach only 8.5 percent in 2050.
This relatively lower share of public expenditure on pensions is attributable to a number of factors.
For a start, European populations are aging faster and their economies are growing slower. Populations in key Asian countries, meanwhile, are aging faster, in part because of lower birth rates and also because of almost non-existent immigration. In addition, U.S. Social Security payments are often less generous than the public pensions offered in many European nations.
But while this explains some of the global differences in anticipated spending on the elderly, it does not reconcile the mismatch between public expectations and fiscal realities. Americans do not expect much government support in their old age and Washington is likely to deliver relatively less.
Whether expectations reflect anticipated spending or whether likely outlays are a product of relatively low expectations is something of a chicken and egg debate. What is clear is that public attitudes and expected government support are in rough alignment in the United States. This is not the case in a number of other aging societies, where expectations are high, spending as a portion of the economy and spending increases are likely to be greater than in the United States – and the ability to pay for such outlays remains an open question.
A relatively small shift in spending priorities to support a slowly aging population has already fueled deeply divisive political debates in the United States. There is no telling quite what the political consequences will be in Europe and Asia for the much more dramatic shifts on aging and pensions outlays that these two continents are facing.
So what? Give tax breaks for hiring senior citizens age 65 and older. Let uncle sam cover the insurance costs too. Problem solved.
This is not banasy. Banasy writes much more eloquently. I haven't seen any posts by banasy in a while; probably because of childish posts like this, and the poster below, both authored by the same person, if the pattern avatar being exactly the same is any indication.
Somebody needs to grow up and act their age.
good post daVide,thank u.
My feeling, is that as our global population ages, there are more cases of high blood pressure and cholesterol among the general population. So due to doctor's orders and for health reasons, many are cutting back on pepperoni pizza.
DeVide, you do realize that cutting back on pepperoni pizza alone is not the solution. One needs to be physically active on a daily basis, and eat vegetables and fruit.
Well, I am 63 years old and have eaten pepperoni pizza all my life. My doctor says I have the vital signs of a 40 year old.
So pepperoni pizza does not affect everybody.
Our doctor suggested we watch what we eat. My wife and I eat fruits, vegetables, lean beef, drink plenty of water and eat pepperoni pizza.
Good post banasy,thank u.
The preceding eight posts were courtesy of me, Jeff Roem; ruining CNN blogs since 2010.
No Jeff. I created you. I made you.
Anyone fooled by me pretending to be banasy saywhat dazzle bobcat? Anyone? Please? Please say I fooled someone.
A very big dose of ego trippin going on eh? What is it that they prescribe for schizophrenics anyway? Well whatever it is you seem to have missed a few doses.
Hi cutie patootie. This kinda thing has been going on for two days now.it makes me feel very uncomfortable. They even stole my name too.
Banasy and I created Jeff Roem. He is like Santa or the Easter bunny, made up.
Hello @ rupert. JR just has to ruin it for everyone, aint that righ JR? And we didnt make you up, had we you wouldve been a very different kind of guy! Pleasant even.
Ignore Rupert's trolling. He is mentally ill,
With help od technology and robotics, life can be made easier for old people. Yet many of them lack computer skills and have to depend on human resources for help. In Europe old people's homes in general aren't equipped with computers. No doubt in 10 years it would be different.
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