By Rajeshni Naidu-Ghelani | CNBC – Mon, Jan 23, 2012 3:09 PM SGT
The world is rapidly aging. A whopping two billion people will be 60 years and older by 2050, more than triple the number in 2000, according the World Health Organization.
This demographic change has major implications for the global economy. Some of the world’s biggest economies are facing rising health-care costs, a shrinking workforce, higher pension costs and diminishing fertility rates. Many countries have already begun adapting to their increasingly aging populations by raising the retirement age, reducing pension benefits and spending more on elderly care.
More from CNBC.com
We’ve come up with a list of countries with the starkest gap between the number of old and the number of young. We calculated the number of people aged 65 and older for every person 14 years and younger. We’ve also provided statistics on the percentage of the total population aged 65 and above as well as the percentage aged 14 years and below.
The population numbers are from the CIA World Factbook, while we used organizations such as the World Bank, United Nations (UN), and International Monetary Fund (IMF) to illustrate demographic trends.
So, which countries have the biggest gap between old and young? Click ahead to find out.
Old/young ratio: 1.251:1
65 years & over: 16.9%
0-14 years: 13.5%
With one of the world’s oldest populations, Latvia is expected to lose more than a tenth of its of 2.3 million people between 2000 and 2025 , according to the World Bank.
The Baltic state is also the only country on our top 10 list that has more than double the number of elderly women (252,000) than men (122,000). In fact, women live 10 years longer than men in Latvia, which is among the highest gaps in life expectancy between genders in the European Union, according to the United Nations. On the whole, the country has seen its population decline at a rate of 0.5 percent annually from 2006 to 2010, while the percentage of people aged 65 and over has steadily increased.
Not only is Latvia facing a rapidly aging population, the country’s ability to support the old took a big hit during the 2009 financial crisis, when its economy suffered the deepest recession in the EU, nosediving 18 percent.
The government had to drastically cut its budget for a $10.2 billion bailout loan from the International Monetary Fund (IMF) and EU . The austerity measures, which sparked a strong reaction from protesters (pictured), included a 10 percent cut in old-age pensions, and a massive 70 percent reduction in pensions for those still working. Pensioners account for 25 percent of Latvia’s population, while the labour force makes up only 43 percent, according to former Finance Ministry State Secretary Martins Bicevskis.
Old/young ratio: 1.253:1
65 years & over: 16.8%
0-14 years: 13.4%
The retirement age in Slovenia is currently among the lowest in the EU, at 57 for women and 58 for men.
Part of the former Yugoslav republic, which was once considered a successful model for post-communist transition, is now facing a series of credit rating downgrades as its economy struggles with a high budget deficit, political instability and an expensive state pension system. Government reform to raise Slovenia’s retirement age was rejected in a referendum in June of last year, dealing a major blow to the country’s plans to control its ballooning public debt. The World Bank predicts the average age for Slovenia will be 47.4 years in 2025 — among the oldest in the world.
The rapidly aging population has been a big burden on Slovenia’s budget. From 2003 to 2009, the average annual increase in health expenditure was 7.1 percent, while GDP growth in the same period was 5.9 percent , according to the government figures. In 2009 alone, the nominal health expenditure grew by 7.1 percent, while Slovenia’s GDP contracted 5.3 percent. Despite the increase in health-care spending, Slovenia is still below the average for OECD countries. Total health spending accounted for 9.3 percent of its GDP, compared to average of 9.5 percent in OECD countries in 2009.
Old/young ratio: 1.27:1
65 years & over: 19.7%
0-14 years: 15.4%
Sweden is the only country in Scandinavia, a region heralded for its quality of life, to make the top 10 list of the world’s oldest populations.
The country’s elderly population has steadily increased from 17 percent of the total population in 2006 to 18 percent in 2010, while its population of people aged up to 14 years has remained at 17 percent since 2005, according to the World Bank. Seniors will account for nearly 30 percent of the Swedish population by 2040, according the Global Aging Preparedness (GAP) Index. But, despite its aging population, a recent study by asset management firm Allianz Global Investors showed that Sweden has the second-most sustainable pension system out of 44 major economies, thanks to a highly developed and privately funded system which lessens the burden on public finances. Swedes contribute 18.5 percent of their income to the national pension system.
In December, the government pledged $617 million over the next few years to improve elderly care after a series of highly publicized senior care scandals in recent months. An IMF study from June 2011 has ranked Sweden as the 7th country out of the world’s 20 major economies to have the best living standard for the elderly.
Old/young ratio: 1.3:1
65 years & over: 18.2%
0-14 years: 14%
Austria’s population has the fifth-highest percentage of people aged 65 and over in the world, tied with European counterparts Sweden, Portugal, Latvia and Bulgaria, according to the World Bank.
The country’s 65 and over population has gone up from 16 percent of the total population in 2006 to 18 percent in 2010, while its population of people aged 14 and under has declined from 16 percent to 15 percent in the same period. Public pension spending was 12.3 percent of Austria’s GDP in 2008, over 5 percent higher than in the average of OECD countries. Austria also has only 3.5 people of working age for every person aged 65 and over, which is below the OECD average of 4.2 workers.
Men in Austria can currently retire as early as 62, while women can retire at 57. There are nearly 245,000 more women aged 65 and over in the country than men, according to the CIA Factbook. The OECD warned Austria last year that the country needs to cut government debt by curbing early retirement and eliminating early pensions. Last week, the country lost its top-notch credit rating, when it was downgraded by Standard & Poor’s to AA+.
Old/ young ratio: 1.31:1
65 years & over: 18.2%
0-14 years: 13.9%
Bulgaria is one of three Eastern European countries to make the list of the world’s 10 oldest populations. It is also one of only 16 countries in the world that saw their populations decline by more than 5,000 people between 2000 and 2005, according to the World Bank.
Bulgaria’s elderly population increased from 17 percent in 2006 to 18 percent in 2010, while its young population aged up to 14 years has remained steady at 14 percent of the total population since 2003, according to the World Bank. By 2025, more than one in five Bulgarians will be older than 65, up from just 13 percent in 1990.
With its rapidly aging population, the Bulgarian government raised the official retirement age by four months starting this year for every year until it reaches 63 for women and 65 for men, up from 60 and 63 respectively. The government backtracked from plans to raise the retirement age by one year in 2012 after thousands of workers stormed through the capital in protest . For its 2.5 million workers, Bulgaria has 2.2 million retired people. It is also the poorest member of the EU, with the lowest GDP per capita, according to Eurostat.
Old/young ratio: 1.38:1
65 years & over: 19.6%
0-14 years: 14.2%
Greece has the world’s weakest pension system, crippled by high levels of sovereign debt, low retirement ages and a high ratio of pensioners to workers, according a recent study by Allianz Global Investors.
The country’s population of people aged 65 and over has increased from 18 percent in 2006 to 19 percent in 2010, while the group of people aged between 15 and 64 has remained at 67 percent since 2004, according to the World Bank. With nearly one-quarter of Greece’s 11 million people retired, pension payments are a major burden on the economy, which is being kept afloat by the EU and IMF bailout funds.
The country made headlines last year for welfare fraud when the government revealed that thousands of dead Greeks were still receiving pensions . Data in June showed that 4,500 deceased civil servants continued to receive pension payments, costing the taxpayer $20.5 million a year. Pressured by international lenders, the country has been forced to make sweeping reforms of its pension system. Now, fewer than 10 percent of Greeks can retire before 65. In 2010, some Greeks could retire as early as 40 years of age on a reduced pension.
Old/young ratio: 1.47:1
65 years & over: 20.3%
0-14 years: 13.8%
People over the age of 60 will make up a whopping 40 percent of Italy’s population by 2040 compared to over 25 percent in 2007, according the GAP Index.
The country has seen its elderly population remain at 20 percent from 2005 to 2010, while the younger population of people aged 0 to 14 years hasn’t grown since 1999, remaining at 14 percent. Italy’s public spending on pensions is the highest in the EU, at over 16 percent of GDP compared to an average of 11 percent for the bloc.
Once considered one of the most generous pension systems in Europe, Italy’s government took a hatchet to the current scheme by announcing a series of austerity measures to reform the welfare system in December . The country has one of the lowest employment rates in the region, in part because people retire long before the European average. Only 37.4 percent of Italians aged 55 to 64 still work, compared to an EU average of 47.5 percent. The new measures would see the minimum pension age for both men and women raised in stages to 66 by 2018 with incentives to keep workers employed until 70.
Old/young ratio: 1.54:1
65 years & over: 20.6%
0-14 years: 13.3%
Germany is the most populous European country and the second-biggest economy to make the list of the world’s oldest populations.
The country has seen its 65 and over population increase from 19 percent in 2006 to 20 percent in 2010, while the young generation aged 0 to 14 has declined from 14 percent to 13 percent in the same period, according to the World Bank. The percentage of people aged 15 to 64 has gone down to 66 percent in 2010, compared to 69 percent two decades ago, in part explaining the labor shortage the country faces in some sectors. Eurostat predicts there will be less than two people of working age for every retired person in Germany by 2040.
While the European economic power maintains a healthy economy for now, having among the worst demographic stats in the world could lead to rising public spending and debt in years to come. Germany has nearly 2.3 million more women aged 65 and over compared to men. Despite women living longer, they also typically have smaller pension savings than men at retirement. On the whole, nearly 60 percent of Germans between the ages of 55 and 64 work, compared to just 40.7 percent of Greeks, according to EU statistics.
Old/young ratio: 1.74:1
65 years & over: 22.9%
0-14 years: 13.1%
Japan is the largest economy to make the list of the world’s oldest populations. It is also the only country outside of Europe in the rankings.
With the highest life expectancy in the world at 86, people aged 60 and over will account for over 43 percent of Japan’s population by 2040, according to the GAP Index. Currently, one in four people are over the age of 65. On the other end, its population of people aged 15 to 64 fell four percentage points in the 10-year period from 2000 to 2010, while people aged up to 14 years fell two percentage points in the same period. Last year, the country made headlines when data showed that its population grew at its slowest pace since 1920 in the five years to 2010.
Slowing population growth indicates that Japan will find it more difficult to spread its debt burden and the rising costs of an aging society, among the working population. Japan is already the most indebted industrial nation with a public debt that is double its $5 trillion economy. Lonely elderly people have also become a growing social problem in the country. In 2010, 4.6 million elderly lived alone in Japan. The number of seniors that died at home alone increased by 61 percent between 2003 and 2010, according to official figures. In August, the government introduced measures forpostmen to check up on people over 65 once a month by handing them seasonal greeting cards.
Old/young ratio: 2.18:1
65 years & over: 26.9%
0-14 years: 2.18%
Monaco, one of the world’s most densely populated countries, is home to the oldest population. It leads eight other European countries in the top 10 list. But the country is also a bit of a statistical anomaly because its status as a tax haven makes it a big draw for the wealthy and the retired rich.
With an estimated population of 30,539, the country saw its population decline in 2011 by 0.12 percent, according the to CIA Factbook. Only around 8,000 people are citizens of the city-state. The proportion of Monaco’s population aged 65 and over is 26.9 percent, the highest in Western Europe, where the average is 16.5 percent, according to a 2011 study by research firm Euromonitor.
The median age of Monaco’s population is 49.4 years, according to the CIA Factbook. With its older demographic, Monaco spent just 1.2 percent of its GDP in 2009 on education, according to the World Bank. In an effort to attract young professionals and entrepreneurs to boost its economy,Prince Albert launched a new consular service in Britain to attract foreigners in 2007.