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Problems Faced by Aging Population

The "demographic dividend" associated with the transition from high to low fertility and mortality rates is based on two facets. The first is the large pool of potentially employable labor of working age in the first phase of the process; the second is the potential for high savings rates by these workers, particularly as they move into their most productive working years and as the consumption support needs of their young dependents lessen. Both facets provide an enormously important window of opportunity for rapid and buoyant economic growth through an enhanced labor force and high investment rates. The opportunities afforded by high savings rates relate to achieving both a higher aggregate per capita income level by the time the population becomes aged and the building up of a stock of assets, both real and financial (and internal and external), that can be drawn upon to help finance the consumption needs of an elderly population. The flip side of the transition, of course, is the eventual subsequent movement of the population structure toward significantly higher Elderly Dependency Ratios (and smaller Young Dependency Ratios) as the rate of growth of the working age population falls and the share of the longer-lived retired population (defined by some arbitrary retirement age - usually 60 or 65) rises.

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* Contributed by: -
Manvendra Pratap Singh & Vishal Narlawar,
MBA (majoring in Marketing),
ICFAI Business School, Hyderabad.