The World’s Aging Population Crisis: Visualizing Demographic Transition

This blog is Part 1 in our series on population dynamics. In this blog, we look at the world’s aging population using a fun visualization and the factors that lead up to aging population. (All finished? Check out Part 2 here.)

33% of Japan’s population is over 60 years of age. No wonder Japan is said to be facing an “aging population” crisis. But wait, why is this a crisis? How can we avoid it? What is “aging population” anyway? Are all countries headed there?

Visualizing Aging Population

To understand if the world’s population is indeed aging, we aggregated the United Nation’s median age estimates from 1950 to 2015 for each country and combined it with median age projections for 2020 to 2100.

(The UN projections for 2020 to 2100 have been made using medium variant projections. A medium variant projection “assumes a decline of fertility for countries where large families are still prevalent” and “a slight increase of fertility in several countries with fewer than two children per woman on average.”)

Check out our interesting visualization on how the world is aging from 1950 to 2100!

Build-Up to Aging Population

So, the world is aging indeed! But how did we get here?

The events leading up to aging population can be best explained by the demographic transition theory. Demographic transition refers to a country transitioning from high birth and death rates to lower birth and death rates as it progresses economically and culturally. It is considered one of the best documented theories in population studies.

The Demographic Transition theory says that a country’s demographics undergo 4 stages:

Stage 1: Pre-Transitional Stage

High birth rate and high death rate

In this stage, limited birth control leads to a high birth rate. Death rate is high too, owing to a high incidence of diseases, lack of good nutrition, high infant mortality, and frequent famines.

Examples of countries currently in the pre-transitional stage: Angola, Mali, Niger, Somalia, Uganda

Stage 2: Early Transitional Stage

High birth rate and falling death rate

As public health and nutrition improve, the infant mortality rate and overall death rate fall.

Examples of countries currently in the early transitional stage: Benin, Guinea, Mozambique, Rwanda, Zambia

Stage 3: Transitional Stage

Continued fall in birth rate and slowdown in fall of death rates

As lifestyles improve, children are no longer seen as a source of income but another expense that reduces spending money for newly available luxury items, social trends, technology, and fashion. Moreover, as more women enter the workforce and opt for fewer children, population growth slows.

Examples of countries currently in the transitional stage: India, Botswana, Bangladesh, Cambodia, Jordan

Stage 4: Post Transitional Stage

Low and nearly equal birth and death rates

Cultural factors — such as need for self-actualization and financial independence before “settling-in” for marriage — play a significant role in bringing down fertility rates.

Examples of countries currently in the post-transitional stage: Japan, Germany, Lithuania, Ukraine

Why Aging Population Is a Concern

Countries such as Japan, Germany, Lithuania, and Ukraine are facing an “aging population” crisis, where birth rates are falling because of increased education levels, higher awareness on family planning, improved birth control methods, and cultural shifts. This aging population is a concern for governments, since it leads to lower tax revenues and higher pension expenses as people age out of the workforce. Moreover, aging population can lead to a deflationary economy, since lower savings and risk tolerance hurt the stock market and money supply.

On the flip side, Africa has the youngest population in the world according to the United Nations. Africa has 200 million youth aged between 15 to 24, and this number is projected to double by 2045. While this could lead to high economic growth, it poses a huge challenge for African governments in creating employment for all their youth. Many Asian countries such as India are at the cusp of this transition. 42% of India’s 1.2 billion population is in the working age group of 15-40.

In order for countries to prepare better for sharp changes in demographics, they will have to combine data on demographics and economic indicators to devise effective forward-looking policies. Perhaps countries in the early stages of demographic transition could learn from the experiences of their late-stage counterparts.

Enjoyed this blog? Check out the next blog in this series: “Is India Aging Like Japan? Visualizing Population Pyramids”