Consequences of a graying world

Aging populations pose big problems. Here's what to do.

from the June 29, 2007 edition

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Women were able to decide when and how many children to have. The pill gave them the ability to combine career and family aspirations in a way that was previously impossible.

But the advent of choice has brought an unintended consequence. Many women now delay childbirth to the point where it becomes much less likely that they will conceive naturally. Twice as many women remain childless today as did in the 1940s, and family size is shrinking.

The options for mitigating the effects of population aging are limited and complex. The main possibilities are welfare reform, increasing immigration, or raising fertility rates.

All three strategies have massive financial and political implications. Many governments shy away from taking the drastic steps needed in these areas, tending to be more concerned with the next election than with the next generation.

The option least tangled up with political will is to introduce policies aimed at encouraging people to have more children – in other words, reducing the social, economic, and biological barriers to childbirth.

Need for family-friendly policies

Countries that have "family-friendly" policies – particularly those that help mothers to raise children and work – have managed to maintain or even slightly raise their fertility rates. Such policies include tax incentives for families with more than one child, flexible working options, and maternity and paternity leave.

France now has the second-highest fertility rate in Europe, due in part to the introduction of pro-natalist policies at the very earliest indication of population decline.

As a larger percentage of the population falls into the 60-plus category, governments will not be able to ignore the graying of society. On pensions, healthcare, and other issues, retirees will have a louder voice as their numbers increase, and they will use it.

They did in the last British election. More than twice as many over-65s voted as did 18-24 year-olds. Elected officials know that if they ignore these voters, they risk being forced into early retirement themselves at the next election.

• Jonathan Grant is president and Stijn Hoorens is a senior analyst at RAND Europe, an independent nonprofit research organization.

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