The Impact of Aging Population
Based on the various studies, aging population often leads to the increase of dependency ratio of people from 65 years old and above. Meaning, there are more people who will be claiming retirement benefits like state pensions, heath care pensions and insurances than the people who will work productively and who pays income taxes to the government. And, the most significant impact of more aging population is those working people will have to force to pay higher taxes. This event will surely stop many companies to stop sufficient incentive programs to their employees. As a result, many employees and workers would be forced to leave their jobs and shortages in the work force will be a greater problem in many industries. At the same time many businesses would tend to close due to lower productivity rate. With all these negative impact in the economy, there are lots of changes that could be possibly made to keep the country’s economy still running effectively and productively.
(http://longevity-science.org/Population_Aging.htm)
Furthermore, aging population will surely increase the massive demands of working people for the increase rate of their compensation as well as to their health care benefits and medical needs. Even in the social security costs in the government side. In other words, the primary negative impact of aging population is the remarkable shortages of workers in different industries that would cause shortages of production and supplies as well. This is the reason that many families in some part of the globe are encouraged to have more children as much as possible as to meet the aging population problem in every nation. Relatively, since there are many women and men who are using birth controls, currently birth rates are decreasing significantly. Naturally, if there are more old people than the younger people, the tendency is to have a negative impact to many businesses as well as to country’s economy. In relevant with this, Japan is a country that has a ratio of 19 seniors versus 1 adolescent. This is obviously a real concern for those countries that number of children is limited by their government, and it has been a part of their government law. In this case, the government and the various industries may experience remarkable shortages in their work force for a certain period of time. Perhaps, this is the reason that Japan, Korea, Taiwan, and other countries in the globe are requiring for additional employees for various industries from other countries who have more population than they do.
However, various governments do their best effort to solve this kind of problem through increasing the participation rate of all younger groups of people. At the same manner, every government of each country modify the retirement age of their employees. They even extend the retirement age even beyond 60 years of age. So long as the employees are still capable of working. Most countries are giving more importance and great consideration to providing their employees with proper health care program, pension plan and insurance plans. This is the only effective way of keeping their employees stay longer in their companies.
(http://www.economicshelp.org/labour-markets/ageing-population.html)
Moreover, medical benefits and expenditures of the employees are rising faster compared to pension plans due to the fact that Medicare pays for acute and long-term medical treatment and maintenance for the poor –elderly and none elderly workers. Like in United States, most middle class American employees have fewer savings and investments aside from Social Security. These are main reasons that many old people forced to enter to nursing homes since Medicaid accounts shoulder 40 percent of all nursing home spending and health payments. Correspondingly, the lifetime value of Social Security old age benefits is from the time that it matures until the time of death of the members. All the objectives of Medical programs and Social Security would be better achieved among the old and retirees through direct allocation of funds to hospitals and other credited health facilities that may serve poor or uninsured aging populations. The impact of an aging population really affects the federal assistance of the states as well as to the total medical spending scale. Some economists are seriously discussing about the budget deficits for the Medicare and Medicaid. This is going worst by the recent global recession. There are many companies that were forced to close due to insufficient capital. Part of this event, many employees in the world were being deprived of their medical, pension, health and insurance benefits that they supposed to claim when they get older.
(http://www.brookings.edu/es/research/projects/budget/fiscalsanity/chapter5.pdf)
References:
(http://longevity-science.org/Population_Aging.htm)
(http://www.economicshelp.org/labour-markets/ageing-population.html)
(http://www.brookings.edu/es/research/projects/budget/fiscalsanity/chapter5.pdf)
Credit:ivythesis.typepad.com
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