Global population aging is an inevitable feature of the final stages of the demographic transition, a worldwide combination of low fertility and low mortality that result in older, more slowly growing (or even shrinking) populations. This trend raises two concurrent concerns: the risk of rising "dependency ratios" of the elderly on the working-age population, and falling global saving rates as the growing retired population begins to dissave after a lifetime of working.

These are genuine concerns, but there are also factors that will ameliorate them. Although the burden of the dependency ratio will fall on public programs such as pensions and health care, it will occur in such a gradual fashion that resources can be effectively redirected over time. Moreover, the smaller labor force in an aged society can be more productive with a small pool of capital as resources per worker increase. Global Population Aging and Its Economic Consequences explains how the risks of global aging can be contained with a combination of foresight and prudent public policy. It also considers how these trends will affect the developing countries that have too often been neglected in discussions of global aging.

Ronald D. Lee is the Edward G. and Nancy S. Jordan Family Professor of Economics and professor of demography at the University of California, Berkeley, and director of the Center on Economics and Demography of Aging. Lee is also a research associate of the National Bureau of Economic Research.

The Henry Wendt Lecture Series

Global Population Aging and Its Economic Consequences was the 2005 Henry Wendt Lecture, delivered at the American Enterprise Institute in Washington, D.C. on September 28, 2005. The Wendt Lecture is delivered annually by a scholar who has made major contributions to our understanding of the modern phenomenon of globalization and its consequences for social welfare, government policy, and the expansion of liberal political institutions.

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