Q&A: How to prepare for the aging population of the future

Population aging is one of the most significant trends of the 21st century — 1 in 8 people in the world are aged 60 or over, and by 2050, this age group will make up 22% of the global population. This is something to be celebrated, said Michael Herrmann, senior adviser on economics, and manager of the Innovation Fund at the United Nations Population Fund — mainly, because it’s a result of significant improvements in modern medicine, infrastructure, nutrition, and water and sanitation, among other things. But the aging of individuals isn’t the same as the aging of a population, he continued, so as fertility rates continue to decline and migration patterns influence country demographics, some governments are anxious about the steady increase of older people as a proportion of the population. “When we talk about older persons, we often do so through this concept of the dependency ratio and this contributes to this terrible perception of older persons are a burden,” Hermann said. “But older persons gave a lot in their lifetime, and I think they still have a lot to give.” With the global population already surpassing 8 billion, UNFPA is working with governments to ease their anxieties and help them better prepare for an aging population. This conversation has been edited for length and clarity. While people living longer is something to celebrate, what are the challenges that this also presents for governments around the world? One that everybody has on their radar is the pension system. You have more people living longer lives so more people are drawing benefits for longer, or you have fewer people paying into the pension system. That can challenge the financial viability of these systems, and therefore most countries in the world have undertaken pension reforms. Then there are health care systems. Older people need more health care than younger people and that can place stress on the public health care system and has implications for financing from the public. Another challenge is labor shortages. You can have skills shortages in an economy because of aging doctors retiring, for example, but that is different from a general labor shortage. Since COVID-19, we do seemingly have general labor shortages in many places, sometimes because people went to their home countries during the pandemic and then didn’t come back. “Data is not the issue — it's about setting up systems in countries, particularly health systems, that are more focused on geriatrics and much more integrated.” --— Michael Herrmann, senior adviser on economics, and manager of the Innovation Fund, UNFPA Some news publications have published articles over the years telling us how bad population aging is for the economy. But in fact, countries with an aging population, such as Japan, are not doing so badly by all accounts. They might have a slow economic growth rate, but they have a high economic growth rate, and per capita wealth is continuing to increase. Many countries that are at an advanced stage of aging are dealing quite well with it. An aging population means a lot of changes in different areas. We might need to adjust our social systems, we might have different consumption patterns — the economy may need to respond, and perhaps we will see fewer strollers produced, and more wheelchairs will be demanded. But it's a structural change, and I wouldn't judge it as negative or positive from an economic perspective. What are some of the challenges and inequalities that older people face, specifically around health? Health care and access to it differs widely between countries, and rich countries are not always doing better. Many countries, including richer ones, are not well-prepared for an aging population and treat [age-related] diseases in a very segmented manner. We don't necessarily have strong geriatric systems that look at the health of older persons in a holistic way. There’s also loneliness. [UNFPA] did a survey in the west Balkans, but the situation is similar in other regions, and it shows that loneliness is a big problem that contributes to mental health issues. There are a number of things to be done about this. UNFPA, for example, is setting up aging centers in Bosnia and Herzegovina, Georgia, and many other countries, where older people can come together, cook, play cards, and do other activities. They also receive health checkups, or learn internet skills. Another big issue is discrimination. The retirement age, for example, hasn't been designed to be a discriminator, but to protect older people. The way it is implemented, however, means that people have to leave the labor market, even those who don't want to. We should be thinking about flexible modes of engagement of older persons. What is UNFPA doing to raise awareness about the aging population and how this can in fact be harnessed as an opportunity? There are biannual surveys by the U.N. of governments and how they perceive demographic changes. What you see in these surveys is that more and more governments have major concerns about population aging. You see also that an increasing number of these countries are taking measures to hold or reverse a fertility decline. A common reaction is, “Let's encourage everybody to have more babies.” In a growing number of countries, they're providing incentives for people to have more kids and in some countries even offering tax exemptions after your third or fourth child. What you see is what's called a temporary effect — they have kids earlier, but they don't have more. UNFPA tries to help countries understand, based on data, whether their population is aging, how rapidly is it aging, and how to anticipate the needs that come with this. The message is, don't wait until your pension system is bankrupt — start anticipating it and make reforms or design a social system ahead of time. The other thing we want to really help countries do is to move from a place of anxiety to a place where you start to manage this trend more constructively and proactively. We have created a demographic resilience program, which works with countries that have these anxieties to develop policy responses. In many cases, these are focused on helping women have a better work-life balance, so they can have children if they want, but also work. We need to work with demographic change and make the most of it, rather being anxious about it and the efforts to try to change it. What data do we have available and what role can it play in addressing these concerns? We have a lot of data on age structure and age-specific mortality that can help countries prepare. Data is not the issue — it's about setting up systems in countries, particularly health systems, that are more focused on geriatrics and much more integrated. There are also a lot of tech possibilities that we can use to better prepare for an aging world. You have companies that via ATMs can detect whether an older person might have a problem concentrating depending on how often they punch in their code wrong, and there are technology companies that can detect from afar whether someone takes their medication on time. We need to think about technology; we need to think about medical staff and health systems. How will some countries be affected differently by the aging population? When we think about countries with an older population, we typically think about more developed countries with a very high share of older persons in the total population. But the rate of population aging is actually much faster in the developing world. Some countries in Africa, for example, still have high fertility, but the population is aging from a low level at a very rapid rate. So today they have a very small share of older people but this share will double, even triple very quickly. These countries should also start thinking about population aging — but their mindset is not quite there yet because the average age of the population currently is 20, sometimes under 20 years old. There’s a real challenge of how even the poorest countries will extend support to older persons at some point in the future. Why is it so important that we don't just see the older population as a burden? We have to give them the space to be and to interact because if we push them to the outsides of society, the benefits they can offer and the experiences they have to share will not be realized. In Kenya, for example, we have initiated intergenerational dialogues where older people can give advice on looking for a job and writing a cover letter, or how to do an interview. Then we also have younger people teaching internet skills, for example, to older persons. We also see from the data that older people are hugely important in the care economy for children. It’s not that they only receive care, they give a lot of care, to grandchildren especially. And we see that older persons don't just get monetary transfers. Again, from the data and national transfer accounts analysis, we see that older persons provide a lot of transfers and share their wealth, usually with family. Society must look at older people differently and really think about the integration of this group in everything.