ECONOMIC IMPLICATIONS OF GLOBAL AGEING
Preeti Chandra Shekhar
Principal Consultant, Infosys Technologies Limited, India
Abstract. The effect of global ageing on old age income and security has been a
topic of interest across the globe. Global ageing is the result of a two pronged trend
– rising life expectancy and declining fertility. The historically known steep pyramid
shaped population structure that was characterized by more young people than old
is slowly being replaced by an inverted pyramid, with more old than young.
Population ageing is presenting a new challenge for the state for providing pensions
and other long-term care benefits for a longer period than expected. The public
system and the economy at large have to provide both for pension/retirement and
health. There is no choice that exists between the two. Perhaps one can look at
ways of exploiting the synergies between pension funds and long-term care.
Key-words: pay-as-you-go, long-term care (LTC), defined benefits, defined
contribution, phased retirement, annuities, pay-out
"It is not how old you are but how you are old which matters." Chinese proverb
The effect of global ageing on old age income and security has been a topic of
interest across the globe. A majority of the studies have emphasized on the social
impact as also the merits and de-merits of the various funding methods existing for
retirement benefits in various countries.
This paper attempts at discussing the economic impact of global ageing and
attempts at suggesting some methods that can help exploit the complementing
requirements of pension and long-term care.
2 Global Demographic Trends
The world over, the demographic trend is moving towards increased life
Following are some of the key indicators of the demographic profile of the world:
• Life expectancy at birth: As per the United Nations report, by 2050 the more
developed countries are expected to attain a life expectancy of 82, while that of