A report by the Center for Strategic and International Studies says,
The UN projects that the ratio of working-age adults (aged 15 to 64) to elderly (aged 65 and over) in the developed world will drop from 4.5 to 1 today to 2.2 to 1 in 2050. The actual ratio of contributing workers to retired beneficiaries is lower—since not all younger adults work and since most older adults retire before age 65—and is due to drop further. According to estimates by the International Monetary Fund (IMF),* this “support” ratio will fall by 2050 to 1.5 to 1 in Japan, to 1.4 to 1 in France, and to 1.2 to 1 in Germany. In at least one country, Italy, it may sink beneath 1 to 1, meaning that more people will be collecting benefits than paying taxes.
…The official projections, in fact, rest on a remarkably optimistic set of assumptions about future economic and demographic developments. They assume that unemployment rates in most countries will fall, that labor-force participation rates will rise, and that fertility will rebound back toward the replacement level. All of these developments increase the projected size of the workforce and tax base, and hence decrease the projected pension cost rate. The projections also assume that the historical rate of improvement in longevity will slow.
READER COMMENTS
Barkley Rosser
Nov 22 2006 at 4:27pm
One thing that this report underlines is how little of a “crisis” we have in the US. Germany
already has the demographic ratio the US is
projected to have around 2030, when things will probably more or less stabilize with the baby boomers fully retired, and Germany pays substantially higher pensions than we do with earlier retirement ages. All the huffing and puffing about needing to do something about social security, being whooped up yet again by the administration is just horse pucky, especially when we have a much more serious fiscal problem with our health care system.
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