Sobering Thoughts

One statistic that is often used to demonstrate the challenge of aging populations is the OADR – Old Age Dependency Ratio.

It describes the relationship between the number of people who are “economically active” and the number who are not, and is usually calculated by dividing the total number of people aged under twenty plus those aged over sixty-five or more by the sum of the population aged between twenty and sixty-four.

It is a far from perfect metric, not least because it assumes that everyone in the latter age group is employed and paying taxes, ignores tax income derived through other means, such as wealth tax, and overlooks the role of monetary policy in public spending. But it can nonetheless give an indication of the scale of demographic change within a country.

In Sweden, the OADR has steadily climbed since the early 20008, with some estimates suggesting that due to the aging population, it is expected to rise to 0.92 by 2060. In other words, there will be almost as many people of working age as there are out of work. Compounding Sweden’s growing older population is the declining fertility rate in the country.

In Singapore, the number of centenarians doubled from 2010 to 2020. 1,500 people are above 100 years old. Two in three of these are women, as they generally live longer.

In 2021, the life expectancy at birth here was 81.1 years for men and 85.9 years for women, according to the Department of Statistics. Its data shows that there are currently also about 21,500 nonagenarians, or people in their 90s, in Singapore. Of these, around 14,900 are women and roughly 6,500 are men.

With government initiatives like Healthier SG, which aims to get people to live healthier for longer, there may be even more in the future who live full, rich 100-year-long lives.

The United Nations estimates that there are 573,000 centenarians globally. The United States has the most, at almost 97,000, and Japan has the highest proportion at 0.6 per cent of its population.

With higher life expectancy, it therefore becomes necessary to rethink our approach to education, work, and retirement. These three key stages in life will increasingly not be linear any more.

We must avoid becoming another Japan, where productivity and GDP have sagged as the elderly make up an ever larger share of the population, placing tremendous stress on the country’s coffers.

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