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A Critical Window for Policymaking on Population Aging in Developing Countries

Population Reference Bureau
Inform. Empower. Advance.

A Critical Window for Policymaking on
Population Aging in Developing Countries
Toshiko Kaneda

(January 2006) The world's elderly population is quickly growing, both in its absolute
numbers and in its percentage relative to the younger population—the latter trend
known as population aging.
And populations are aging even faster in the developing world, as fertility rates there
have declined more rapidly and more recently than in the developed world.1 Asia and
Latin America and the Caribbean are the world's fastest aging regions, with the
percent of elderly in both regions projected to double between 2000 and 2030 (see
Figure 1).2 Even sub-Saharan Africa, which has the smallest proportion of elderly and
which is aging slower than any other region, is projected to see the absolute size of
its older population grow by 2.3 times between 2000 and 2030.3

Figure 1
Percentage of Elderly (Ages 65 and Over) by Country, 2000 and 2050


But less developed countries—which have much lower levels of economic development and access to adequate health care than more developed countries— will be hard-pressed to meet the challenges of more elderly people. especially as http://www. World Population Prospects: The 2004 Revision (New York: United Nations.5/26/2016 A Critical Window for Policymaking on Population Aging in Developing Countries 2050 Source: United Nations Population Division. 2005) 2/7 .

developing countries face particular issues in constructing policies that address increasing elderly populations. http://www. reflecting the marriage patterns of today's younger cohorts. the proportion of the elderly who are divorced or never married will likely increase. such support is under pressure from trends that include falling fertility rates (which mean fewer children as caregivers). Third. only with their spouse (without any adult children). and the migration of rural young people to cities and away from elderly relatives. Policymakers in the developing world need to invest soon in formal systems of old-age support to be able to meet these challenges in the coming decades. changing cultural norms. The health care systems of many developing countries are still focused on childhood and infectious diseases as well as reproductive-health services.5 The growing size of elderly populations—combined with these populations' disproportionately large consumption of health care per capita—will place increasing pressure on developing-country health care systems. Second. and a potentially growing acceptance and availability of institutional care for the Pressure on health care systems.aspx 3/7 . improved joint survival of couples. Elderly in developing countries have relied heavily on their family for personal care and material support. But population aging leads to increasing demand for care that addresses chronic health conditions. the percentages of the elderly who live alone. Per capita health expenditures also tend to be much higher for elderly adults than they are for younger adults. increased longevity of the elderly. First. Several trends might also soon have impact on informal support systems. Today.prb.5/26/2016 A Critical Window for Policymaking on Population Aging in Developing Countries traditional family support systems for the elderly are breaking down. rapid urbanization and growing out-migration of young adults to urban areas may mean that their parents will age in rural areas without the direct support of the children and face difficult living conditions without access to various amenities. Strain on informal support systems. changing norms of familial support. or in institutional settings will likely increase in developing countries because of declining fertility. Challenges of Population Aging Although population aging presents major challenges for even the most developed countries. however.

8 These factors must be taken into account in policies on the elderly. and to have fewer financial resources compared with elderly men at any given age. elderly women are generally more likely to be disabled.aspx 4/7 . living alone. 2005).org/Publications/Articles/2006/ACriticalWindowforPolicymakingonPopulationAginginDevelopingCountries. especially because women will make up an increasingly greater proportion of the elderly http://www. Today's relatively high level of labor force participation among older adults in developing countries reflects the lack of comprehensive old-age pension systems in these countries. and the female advantage in life expectancy will probably widen further in the developing world as gender gaps in education and economic opportunities narrow (see Figure 2). 2000-2050 Source: United Nations Population Division. Increasingly feminized older populations.5/26/2016 A Critical Window for Policymaking on Population Aging in Developing Countries Shrinking productivity and increasing demand for pensions. World Population Prospects: The 2004 Revision (New York: United Nations.7 Still.6 Figure 2 Population Ages 65 and Over in More Developed and Less Developed Countries. Labor force participation rates for the elderly are projected to decline as economies expand and societies become wealthier. widowed. Growth in elderly populations may pressure developing economies by increasing demand for pension payments and reducing economic productivity of work forces.prb. Women generally make up the majority of elderly populations around the world.

and rely on public pension and health care programs to meet their needs fully. Greater workforce retention levels would help elderly individuals save more for retirement.prb. To offset the impact of the demographic shift and other changes on the traditional system. Establish or expand public pension systems. Immediate Investment Needed in Systems of Old-Age Support Policymakers must realize that many less developed countries currently have or will have a demographic window of opportunity over the next generation—an optimal time for investing in formal systems of old-age such as those working for government or large companies.11 Creating public housing options for multigenerational living also encourages such living arrangements and might facilitate family care for the elderly.9 Below are some policy measures that could help less developed countries to deal with population aging. Finally.12 Increase employment opportunities for the elderly. Work disincentives and labor market impediments to the elderly (such as low mandatory retirement ages) should be eliminated. Most developing countries have pension coverage that is restricted to small segments of the workforce. This window has been opened by falling fertility rates. which mean that the number of working-age adults in the developing world will continue over the next few decades to grow faster than the number of children and elderly.10 Facilitate family provision of support.aspx 5/7 . policymakers should encourage high rates of personal savings by managing inflation to secure the value of savings over the long-term. policymakers must invest in the systems that would encourage and facilitate the elderly to work longer.5/26/2016 A Critical Window for Policymaking on Population Aging in Developing Countries populations in developing countries. most of which http://www. Increasing both flexible and part-time employment options as well as expanding educational programs for older workers are also essential. Public pension programs. they would also bolster the fiscal viability of public pension and health care programs. Programs to assist families in caring for the elderly include providing tax incentives for elder care and increasing day care and home nursing services. save more.

13 These programs also must be designed with enough capacity to incorporate the expanding ratio of elderly to working-age populations. securing the care to address chronic conditions for the elderly is often lower priority. providing wide coverage in developing countries requires political stability and may be administratively challenging. and achieving these without forgoing vital services for other age groups—are major policy questions facing rapidly aging countries.aspx 6/7 .org/Publications/Articles/2006/ACriticalWindowforPolicymakingonPopulationAginginDevelopingCountries. self-employed. Finding Workable Policies on Aging Developing or expanding health insurance programs for the elderly population. and informal-sector workers.) While developing countries can learn from the policy successes and failures of developed countries. adopting these policies in a short time frame and at much lower levels of economic development has never been attempted. making poor investments. But the opportunity for such investments will be available only for a few decades. As in the case of pension coverage. Prepare health care systems. Addressing the health care and economic needs of increasing numbers of elderly will also require balancing these needs with those of other populations as well as summoning the political will to support often very expensive programs. improving the capacity of health care systems to treat chronic conditions. Without universal access to even basic health care in many developing countries. and outliving one's savings. particularly in places with high proportions of agricultural. and the cost of squandering this opportunity will be high.prb. provide an economic safety net and also allow risk pooling to mitigate the cost of becoming disabled. http://www. and the next focusing on population aging in China. insurance programs for the elderly in most developing countries cover only a small minority of that population. (The issues raised in this article will be followed by discussions in two Web-exclusive articles over the next two months on aging and health care—one analyzing the preparedness of health care systems to handle population aging.5/26/2016 A Critical Window for Policymaking on Population Aging in Developing Countries also cover some disability insurance. However.

. Kevin Kinsella et al. "Global Aging: The Challenge of Success. 12. "The Effect of Education on Mortality Among Older Taiwanese and its Pathways. Sidney 3." Population Bulletin 60. Kevin Kinsella et al. no. "Below-replacement Fertility in East and Southeast Asia: Consequences and Policy Responses. Aging in OECD Countries: A Critical Policy Challenge.5/26/2016 A Critical Window for Policymaking on Population Aging in Developing Countries Toshiko Kaneda is policy analyst at the Population Reference Bureau. EastWest Center Research Program. 1997). An Aging World: 2001. See more detailed discussions on the worldwide trends in population aging in Kevin Kinsella et al. 7.. no.. 2 (1998): S71-S82. 2002). Averting the Old Age Crisis (Washington. Olivia S.. World Population Prospects: The 2004 Revision. 2005).. United Nations Population Division." Journal of Population Research 20. 2." Pension Research Council Working Paper Series 1995-14 (1995). See more detailed discussions on the policy options discussed below in Sidney B. 6. Westley et al. 1 (2005). Population and Health Studies (Honolulu: East-West Center. Westley et al.. Xian Liu et al. 1 (2003): 1-18. "Asia's Aging Population. 4. 13.aspx 7/7 . 2001). References 1. DC: World Bank." in The Future of Population in Asia." 11. Bhakta B. The World Bank." Journal of Gerontology: Social Sciences 53B. An Aging World: 2001. OECD Social Policy Studies 20 (Paris: OECD. http://www. no.prb. ed.. 1994). 9. "Asia's Aging Population. Organization for Economic Co-operation and Development (OECD).. Mitchell et al. 8. 5. An Aging World: 2001 (Washington. Kevin Kinsella et al. World Population Prospects: The 2004 Revision (New York: United Nations. 10. DC: Government Printing Office. United Nations Population Division. Gubhaju et al.. "Designing Pension Systems for Developing Countries.