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Impact of a Growing Elderly Population


One of the main challenges that most countries face in the contemporary economic setting is the increasing number of elderly people in the society. This group constitutes of retired workers and veterans aged 60 years and above (Morgan 16). According to experts, growing old is an inevitable process that mostly happens without any adequate measures to deal with the challenges that come with it. Studies have established that a growing elderly population poses one of the greatest threats to contemporary societies across the world.

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This has even surpassed some of the most feared threats such as war, terrorism, climate change, natural disasters, and diseases (Arenson and Reichel 100). Experts argue that the trends observed in the demographics of the ageing population across the world, indicate the possibility of aging people outnumbering the young in the next couple of decades.

They argue that even with the increase in life expectancy since the turn of the 20th Century, the society is likely to continue feeling the impact of the elderly population, which is growing at an alarming rate (Altman and Shactman 66). Some countries are already feeling the impact of taking care of a high number of elderly people in the population.

Experts argue that even developed countries are increasingly getting worried by this growing phenomenon. Studies have established that economic, social, and health factors are likely to increase the burden of the elderly population on economies around the world (Morgan 22).


Studies have established that the number of elderly people in developed countries such as the United States is likely to double in the next two decades, thus increasing the burden on both the federal government and state governments (Altman and Shactman 74). Experts argue that the growing elderly population impacts on crucial life elements such as the economy, health care, social development, housing, taxation, labor market, and infrastructure among others (Arenson and Reichel 109).

Governments often spend numerous resources in providing health care, social services, and economic incentives for the elderly people in economies that are already burdened. This means that the dependency ratio in the society increases as more and more people get older.

This is a huge concern because the decline in birth rates means that over the next couple of years the number of people who will be economically productive will be much lower compared to the current state (Morgan 31). Experts argue that as the world continues to grow, people tend to change their expectations in life. This means that even those who are aging will have different expectations compared to those they currently have.

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Impacts of a growing elderly population

Studies have established that a growing elderly population has numerous impacts on the government, the society, and families. The first impact is an increase in government expenditure on health care and pensions (Arenson and Reichel 121). Experts argue that elderly people, most of whom are not economically productive, contribute very little towards a government’s tax revenue.

This often creates a financial burden to governments because they have to provide health care services to people regardless of their contribution towards the economy (Altman and Shactman 85). Experts also argue that a growing elderly population increases the economic burden on governments because of the high number of regular payments made to the elderly people in the form of pensions.

The second impact is the possibility of higher taxes for the working people (Hobbs and Damon 149). Experts argue that governments can be forced to increase taxes on working people in order to meet their financial targets. Governments have numerous expenses to meet and also the need to keep the economy running.

This is likely to severe effects on the economy in terms of a decrease in growth, productivity, and a vibrant labor market (Altman and Shactman 103). Studies have established that such kind of disincentives can reduce the motivation of people to be employed or business developers to invest in such an economy.

The third impact is a weak labor market (Hobbs and Damon 160). Due to factors such as low birth rate, the number of people that enter the labor market in a year compared to those leaving is likely to be lower. A growing elderly population is likely to cause a shortage in human labor.

According to experts, this can easily lead to inflation because the high demand for labor can force those eligible for employment to ask for extremely higher wages (Morgan 60). When the supply of labor cannot meet its demand, wages are likely to increase for the few laborers available. Another impact of a growing elderly population is the emergence of new sectors in the economy geared towards meeting the growing needs of the elderly.

Studies have established that elderly people have special needs and different expectations. Therefore, the possibility of their numbers increasing can lead to the emergence of sectors to meet those needs (Arenson and Reichel 136). For example, older people tend to buy homes when they retire and receive their pension. This is a sector that can easily develop to become a strong pillar for any economy around the world.

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Studies have also established that a growing elderly population can lead to low capital investments due to increased financing of pension schemes (Altman and Shactman 111). Experts argue that economic development of any country is highly dependent on the amount of savings available for investment.

Therefore, for a country with a high number of elderly people in the population, the rate of economic growth is likely to be lower because of limited resources available for meaningful investments. The other possible impact of an ageing population is a steady increase in the dependency ratio (Arenson and Reichel 149).

Experts argue that with a fixed age at which people can retire and an increase in life expectancy, the number of elderly people depending on young ones for economic and social needs is likely to increase. Governments are also likely to have more people depending on them through the pension schemes (Morgan 74).


The growing elderly population has a number of impacts on the society, the economy, and families. Over the next couple of years, population demographics are likely to change a lot, with the elderly people likely to outnumber the young ones. There is an urgent need for governments across the world to develop policies that will address this challenge.

One the most effective ways of dealing with the challenge of a growing elderly population is changing the retirement age so that people can be productive for longer periods. However, this might not have an evenly distributed impact on the economy because some people often choose to retire early. Another measure that can be used to effectively address this issue is to increase the participation of the private sector.

Works Cited

Altman, Stuart, and D. Shactman. Policies for an Aging Society. San Francisco: JHU Press, 2002. Print.

Arenson, Christine, and W. Reichel. Reichel’s Care of the Elderly: Clinical Aspects of Aging. New York: Cambridge University Press, 2009. Print.

Hobbs, Frank, and B. Damon. Sixty-Five Plus in the United States. New York: U.S Department of Commerce, 2004. Print.

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Morgan, Leslie. Aging, Society, and the Life Course. New York: Springer Publishing Company, 2006. Print.

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