Older and Poorer? How sharing among generations could improve well-being

TOWARD INCLUSIVE GROWTH

Around the world, the age of the entire population is changing. These changes will affect economic growth and equity across generations. In 190 countries, the fastest-growing age group is working-age adults (25-59 years old). In these countries, the proportion of children is declining because of low fertility, and the proportion of elderly people is still small. Thus, they are experiencing what is often called a "demographic dividend." This is a unique opportunity to improve standards of living and lower rates of poverty. With fewer mouths to feed, each working-age adult has a better opportunity to save, invest, and educate the young, building a strong foundation for sustained economic growth. This process is just beginning in Africa, where it will relieve the pressure created by very young populations. In many countries of Latin America, Asia, and most of the industrialized world, the age structure will be favourable for several more decades, but the future will be increasingly dominated by growing older populations.