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Demographics of Aging: Why is Our Population Aging?  How Will This Aging Affect Us?

Demographics of Aging: Why is Our Population Aging?  How Will This Aging Affect Us?. National Press Foundation Presented by Karen Glenn and Steve Goss Office of the Chief Actuary Social Security Administration April 8, 2013. The US Population is Aging. What does this mean?

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Demographics of Aging: Why is Our Population Aging?  How Will This Aging Affect Us?

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  1. Demographics of Aging: Why is Our Population Aging?  How Will This Aging Affect Us? National Press Foundation Presented by Karen Glenn and Steve Goss Office of the Chief Actuary Social Security Administration April 8, 2013

  2. The US Population is Aging • What does this mean? • Shift toward more elders, because: • Slowed growth for younger ages • Faster growth for older ages • But why? 2

  3. The US Population is Aging • Is it the: • Baby boomers? • Individuals living longer? • Lower birth rates? • Yes, to all three 3

  4. Under 65 Growth Will Slow — Over 65 Speeding Up 4

  5. Age Distribution Shifting Older 5

  6. Why Is the Population Aging? • Boomers now reaching retirement age • Yes for a while, but: • This would be a temporary bulge • Would “pass through” over time • Permanent change for other reasons! 6

  7. Why Is the Population Aging? • Individuals are living longer • Death rates have been declining • Life expectancies have been rising 7

  8. Yes, Death Rates Are Dropping 8

  9. And Life Expectancies Are Rising(Note gender gap shrinking since 1980) 9

  10. Why Is the Population Aging? • Individuals living longer is just one piece of the puzzle • “Aging” of the Population • Changing age distribution • Recall growth in younger population is slowing • This is not due to death rates 10

  11. The BIG Factor for the Next 20 Years… • Birth rates have dropped • This permanently changes age distribution • Immigration has provided some counterweight - but not enough 11

  12. Birth Rate Dropped from 3 to 2;particularly considering survival

  13. Birth Rate Dropped from 3 to 2;increase in immigration helps some 13

  14. How Will This “Aging” Affect Us? Fewer working-age people Compared to aged “dependents” Workers will need to support more retirees Or more young or old individuals will need to work 14

  15. Consider Dependency Ratios; OK So Far

  16. Big Increases Ahead; Not Due to LE

  17. Stable After Shift for Lower Births

  18. More “Dependents” per Worker • Ultimately, each year, each day: • Goods and services of today’s workers are shared with all in the population • Economics is just how we distribute the scarce resources 18

  19. Pay-As-You-Go System Depends on Current Population 19

  20. One Example: US Social Security Cost Rising as Percent of GDP Above Currently Scheduled Revenue 20

  21. This Aging Transition Is Not Just About Retirement (OASI); It Has Already Happened for Disability (DI)

  22. What to Do ? • Aging population is largely due to lower fertility • With fewer workers per population: • Need lower consumption per person • Workers share more, or others just get less • Will we find ways to encourage working longer? • Political balance will determine the outcome 22

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