Impact Of The Aging Population

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Population aging is set to be increasing by 2050. Many countries will be suffering a decline of GDP, growth rate and others from this aging population. The main factors of this process are low and declining fertility rate and increasing life expectancy. As the cost of living increases, people tend to have a smaller family to reduce cost of living. While the health care system is improving, people become healthier and it helps to increase the life expectancy. What are the impacts of the aging population on the economy context?

a) Labor Force Supply and Productivity
There will be a decline in the supply of labor force among the young populations as the total fertility rate decreases. The involvement of older generations is a good thing as it helps to reduce the shortage of skilled workers. Although older workers tend to have more skills and abilities, the young workers would probably have something that can lead to innovation or development of the new ideas. Lower labour force will lead to lower production. So it will affect the country’s GNP. Besides that, the productivity also decreases as they are not really able to do the job due to their health or condition or age. According to Dostie (SRI-2006) by using statistics from Canada 's Workplace and Employee Survey (WES), states that wages and productivity differentials across three age groups (under 35 years; 35 to less than 55 years; 55 years and older). People in the middle-aged group (35 to 55 years) will reach their both

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