What impact could an ageing population have on a country’s economic development?

When we refer to an ageing population we mean one where the proportion of people who are beyond retirement age is growing in proportion to the number of younger people. In the UK, for instance, there are now more pensioners (men aged 65 and over; women aged 60 and over) than children (under 16). This has a massive impact on how the government spend our money.

In the UK, when people are no longer able to work they receive pensions paid for out of the contributions paid when they were working, and by people who are working now. The greater number of older people there are, the more money that needs to be spent on care, health and pensions by people in employment. Governments around the world have tried many strategies to reverse this trend. In Russia, women have been offered large sums of money to have a second child. In Portugal, taxes were adjusted to make them more favourable to families with more children.

Germany’s population has been in steady decline since the Second World War, and the government have become so worried that it has started to offer financial help to couples to have more children – and to help them when they arrive. When a couple has a baby, the state pays one parent 67% of their previous income for the first year to stay at home and look after their child. This is mainly aimed at fathers and seems to be working; one in five dads now stays at home to look after their child.

The German government has also pledged to increase the number of nursery-school places so that it’s easier for families to have more children and continue to work. It is too early to say whether this will be successful; statisticians say that unless more is done, Germany’s population will fall by up to 17 million in the next 50 years.