The aging population challenges investors

Lyle Stein - May 03, 2011

THE AGING POPULATION  is one of the biggest issues facing the global economy. Birth rates in most Western countries have fallen well below the natural replacement level of 2.1 children per woman (or roughly 20 births for 1,000 population). This decline in population growth has the potential for serious economic repercussions going forward.

With a birth rate of just 10.3 births for 1,000 population, Canada is aging. To put that into perspective, the World birthrate is 19.2. By comparison, the United States is at 13.8, China is at 12.3, Italy is 9.2 and Japan is 7.3.

It is important to assess the age composition of the population when studying the impact of demographic trends on economic activity. In the chart , we compare Canada to the world as a whole.

Note the “bulge” in Canada’s middle-age brackets. Compared to the world, we are a much older society. This could result in numerous issues, especially as the bulge moves from age bracket to age bracket.


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