Age Demographic Shifts
This is the sort of topic that can easily fly under the radar if you're not plugged into global trends and what we might call the analysis industry, but one of the most fundamental elements shaping this century is an impending (and in progress) change in age-demographics that will likely result in tweaked national fortunes, untold discomfort and strife, and maybe even dramatically reconsidered national attitudes toward immigration.
To understand what all that means, consider that for the past several decades, the parts of the world with the largest working-age populations have been countries like the US, Canada, China, Japan, essentially all of the EU, Thailand, Australia, and New Zealand.
Another thing all those countries have in common? They've done incredibly well, economically, during that same period.
The so-called "developing world," in contrast—places like India, essentially all of Africa, most of Southeast Asia, and most of Central and South America—they've been burdened with outsized youth populations: the majority of their people have been too young to work, and that means the majority of people in these countries have been economic liabilities rather than assets, costing their families and these nations money rather than adding money into the pot.
Beginning in the early 2000s, though, some of those wealthy nations—because their fertility rates weren't high enough, falling short of the replacement rate (which is generally shorthanded to 2.1 children per woman: the birth rate at which there are enough new people born to replace those who die, keeping the population steady)—began to see their populations grow older.
Having a population that is too old and has aged out of work but which is living a long time, is similar in some ways to having a population that's too young.
There are a bunch of people around who cost their families and the state money, but who don't contribute to the economy, directly.
Thus, beginning at the turn of the century, counties like Japan, which was just killing it for a while in the 80s and 90s, started to tilt in the opposite direction, their birthrate having plummeted and their working-age population dropping and dropping and dropping, leaving them with more expenses and fewer people available to work and to pay taxes, which meant less money available to fund the support systems for all those older people.
The same trend that was first noted in Japan has since been seen elsewhere, as European nations have seen their average age increase, followed by the US and Canada and Australia, alongside other currently quite wealthy and flourishing nations, like South Korea and China.
The tipping point on this for some of today's wealthiest nations is mid-century, around 2050, at which point China will be about where Japan is, today, hobbled by a population that's at least 40% people aged 65 or older.
This is arguably a good thing in many ways, as it implies people are living longer, and the overall trend has been toward increasing both life- and health-span in most of these nations, so folks are living longer while also being generally well enough to enjoy most of those years.
So the countries that are wealthy today are improving their health outcomes for their people, that's allowing folks to live longer, and the trend we've noted since the mid-20th century is that as people become healthier, wealthier, and more educated, they tend to have fewer children (for a variety of reasons).
Thus, these countries are aging up, but also failing to produce as many babies, which means the population becomes even more heavily weighted toward the top end of the age spectrum.
Parallel to this, many of the countries that have until this point been burdened by all those hungry, non-working children will see those kids grow to working age, which will massively expand their wealth-generating potential and the number of people doing things like laboring, starting businesses, inventing stuff, and engaging in other sorts of measurable economic activity.
There are risks associated with a sudden increase in the number of working-age people in a given area: if there aren't enough jobs, for instance, that can spark violence and revolution, because folks who are keen to work and earn and start families, but who aren't able to do so, tend to be unhappy about that (they’re also young, healthy, and risk-tolerant enough to act-out and maybe even attempt forced change).
So two different age-related situations, both with baked-in threats, but there's also opportunity inherent in this dichotomy.
Part of why Japan has struggled with its population imbalance over the past few decades is that it’s a racially homogenous place with a history of not welcoming outsiders, and consequently, not being super-keen on immigration of any kind.
Places like Canada, in contrast, have encouraged immigration for a long while, and that's helped it defy some of the trends other wealthy countries have struggled with over the years: its population grew by about one million people in 2022, for instance, almost entirely from immigration, which gave it a growth rate of 2.7%, making it one of the world's fastest-growing nations that year—a list that's otherwise dominated by African countries.
That's notable because immigrants, on average, also tend to be younger, working-age people, and Canada's open stance on immigration seems to be helping it plug holes in its economy that might otherwise slow its wealth-related growth, as well.
The big opportunity here, then, is for today's wealthier, rapidly aging countries to figure out systems for attracting and welcoming younger folks from faster-growing areas (where there could soon be a worrying overabundance of such people) to help rebalance their demographic makeup, ensuring the system doesn't become too top-heavy and topple.
There are hurdles to such efforts, though, including concerns about “outsiders” taking all the jobs (and being willing to work for less money), changes to cultural makeups and traditions, and outright prejudices.
The opportunities for nations that make increasing immigration a priority, though, would seem to be vast, and that will become even more the case as we inch closer to that major tipping point in 2050.
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