Republish our articles for free, online or in print, under Creative Commons licence. The populations of most countries of the world are aging, prompting a deluge of news stories about slower economic growth , reduced labor force participation , looming pension crises , exploding health care costs and the reduced productivity and cognitive functioning of the elderly.
These stories are dire, in part because the most widely used measure of aging — the old-age dependency ratio , which measures the number of older dependents relative to working-age people — was developed a century ago and implies the consequences of aging will be much worse than they are likely to be. On top of that, this ratio is used in political and economic discussions of topics such as health care costs and the pension burden — things it was not designed to address.
So instead of relying on the old-age dependency ratio to figure out the impact of aging, we propose using a series of new measures that take changes in life expectancy, labor participation and health spending into account. When you take these new realities into account, the picture looks a lot brighter.
But, since the old-age dependency ratio was introduced in the early s, most countries have experienced a century of rising life expectancy, and further increases are anticipated. For instance, in , life expectancy at birth in Sweden was By , it had risen to In , when the U.
S Social Security Act was signed into law, year-olds were expected to live In , 65 year-olds may expect to live
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