This blog is intended to go along with Population: An Introduction to Concepts and Issues, by John R. Weeks, published by Cengage Learning. The latest edition is the 13th (it will be out in January 2020), but this blog is meant to complement any edition of the book by showing the way in which demographic issues are regularly in the news.

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Thursday, June 11, 2015

Will an Aging Population be the Death of the UK's Economy?

Thanks to Abu Doaud for weighing in on the issue of how terrible an aging population is by linking us to an article with the rather startling headline: "A devastating Credit Suisse note says Britain's economy is screwed." The assessment comes from Amlan Roy, who is Managing Director and Head, Global Demographics and Pensions Research for the Investment Banking Division of Credit Suisse in London. 
He concludes, in part, that the ageing population of the UK is making the economy unsustainable, absent of some major change in demographics. "Health and pension promises towards older people pose a serious future challenge to the UK's financial sustainability," his note to investors says.
The takeaway here is that if your priority is economic growth and low unemployment, then everything UKIP and the Conservatives have been saying about immigration has turned out to be totally wrong.
This is not a new insight from Roy. A quick Google search suggests that he has been talking about this issue for awhile now. If we just look at his economic analysis, he uses the old and tired idea that as people get older, they get tired and are less productive. That may be true in an agricultural society, but not in a technological society, where retirement of people may lead to corporate brain drain, as the AARP has been saying. Indeed, the UK has lifted its mandatory retirement age and recently raised the age at which full pensions are on offer. In particular, they changed the old system by which women (who, of course, outlive men by several years on average) could retire at age 60, while men had to wait until age 65. 

The real message of Roy's report is, as the reporter notes, to keep the UK mindful of the importance of immigrants, given the mounting opposition to the rise in the number of immigrants to the UK. 
The solution to the problem — and we're quoting Roy a little out of context here — is to let more immigrants in: "Immigrants into the UK also tend to be younger. In the UK, 81.2% of migrants are of working age (i.e., 15-64 years old), compared to 65% in the total population. Most of them are also gainfully employed."
Roy is himself the very kind of immigrant of whom he speaks, having migrated to the UK from India by way of a doctorate at the University of Iowa in the US. An interesting demographic aspect to the perception that any country is being taken over by immigrants is, of course, the fact that they tend to have more kids than non-immigrants. This is certainly true in the UK, according to the National Office of Statistics. And, of course, that is the trade-off that any society has to make when it comes to migration policy.

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