Global Greying
Toni Horst, Ph.D.
Specialist in regional economics and demographics
One implication of the growing elderly share of the population is that fewer workers will be supporting retirees in the future. At present, working taxpayers outnumber retirees in the developed world by 3 to 1, according to estimates by the Organization for Economic Cooperation and Development (OECD). Assuming no change in the retirement age, this ratio drops to 1.5 to 1 by 2030. In some countries like Italy, it drops to 1 to 1 or even below.
Public policymakers will be left with few appealing choices. They can raise taxes on the working aged population, a difficult proposition in countries where the tax burden is already high. They can cut benefits to the elderly. Or, they can borrow. Public debt levels are likely to rise in coming decades as countries grapple with how to meet this demographic challenge.