By 2050, demographic shifts could mean a very different global economy
By 2050, demographic shifts could mean a very different global economy
Earlier this year, the United Nations put out new data showing that China, which has been the most populous country in the world for at least the last 70 years, has been overtaken by India in population size.
And, based on population projections for the next few decades, that’s far from the only big demographic shift we’ll be seeing in the near future.
Lauren Leatherby is a visual journalist with the New York Times who has been looking into what those demographic shifts will mean for economies around the world. She joined Marketplace’s Kai Ryssdal to talk about how the world will shift by 2050. An edited transcript of their conversation is below.
Kai Ryssdal: On paper, or, as it were, on the internet, this is great story because the graphics are kind of amazing. And they really illustrate it. It’s a little trickier to do on the radio, but that’s fine. That’s kind of my job. I do wonder, though, how you got interested in this story.
Lauren Leatherby: The richest most powerful countries today have long had these really large working-age populations. And economists agree that that’s been a huge, huge advantage economically and geopolitically. And meanwhile, a lot of developing nations have had quite high dependency ratios having a high number of children compared to working-age people. And so, I think we know a lot of these storylines one by one, but putting it all together, it’s just like the world is going to shift really dramatically.
Ryssdal: The example that comes up pretty early in this piece is, of course, Japan, which has already started to make that shift from having a good, robust, working-years workforce to a much older population with far fewer workers.
Leatherby: Absolutely. And then I think what we see in Japan today is only the tip of the iceberg. A lot of East Asia, China, Europe, South Korea will be much older than Japan is today, in just you know, 20 or 30 years. Some countries will have upwards of 40% of their population that are 65 or older in just two or three decades. And meanwhile, on the other end, you have a lot of these other countries that have long been, you know, hindered economically by their age structures. And suddenly a lot of them will start to enjoy the exact same age structures that Europe and East Asia, the U.S., that a lot of those countries have historically enjoyed.
Ryssdal: Right. So what happens in a population, what happens in a country, when that shift happens when that prime-age workforce is big enough to support all the retirees? What does it let that country do? What is the opportunity?
Leatherby: The upside can be absolutely enormous. Some of the best research is that a third of the economic growth in East Asia at the end of the last century is because of this concept of a demographic dividend. But what the experts who I spoke to were very cautious to say is that it’s not automatic.
Ryssdal: It’s not automatic, but we’ve been told, and I say this every now and then, that demographics is destiny. And yet, actually, maybe it’s not.
Leatherby: Yeah, because it can go multiple ways. I mean, if you have the policies in place with education, with good jobs, then that can be a tremendous upside. But I think the perilous thing that we worry about is extremism. I mean, what studies have shown is that [for] a lot of people that turn to extremism, it’s not because of religious ideology, it’s because it’s a better job opportunity. It’s economics. And so it’s just going to be really critical that these places that have suddenly a huge number of, like, healthy 21-year-olds, that they have jobs and education for those people.
Ryssdal: Just to get us back to where we started, which is the graphics part of this which I do encourage people to check out on the Times website, so the color coding is, you know, green has a healthy working-age population, and then, as the population ages and there’s a smaller working age population, it goes to orange, I was struck that Europe gets orange in a hurry.
Leatherby: Yeah, I mean, we’re really at this turning point right now. It’s like really the next five or 10 years that we are going to start to see a lot of shifts happen pretty quickly in terms of countries aging pretty quickly. And, you know, already this year, we saw India surpassing China.
Ryssdal: The United States, though, it sort of does okay in 2050ish?
Leatherby: Yeah, yeah, I found that quite interesting. The U.S., and Australia is actually another one, [are countries where] we will still see a lot of these effects. However, there’s just an ever so slightly higher birth rate, and we have slightly higher immigration. Immigration is very good for young populations. And so the projections right now are that the U.S. will have slightly larger working-age populations as a share of our population compared to Europe or East Asia.
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