Question

write an 1400 essay about the following question

Q.How might aging and declining populations in old core countries like Canada or Japan affect economies and lifestyle?

Answer 1

Aging population has become a serious issue for many industrialized nations around the world. Lower birth rates or increasing life expectancy are the two key factors resulting in this phenomenon. Modern technology has brought tremendous breakthroughs in the medical sector that has significantly increased life expectancy rates. People are living longer than ever. Fertility rates are kept in check by governments for making decisions relating to the allocation of resources. Often, government policies may also contribute to the decline in the population. For instance, China relaxed its decades old one child policy in 2014 to deal with its rapidly declining workforce. An aging population increases the demand for retirement homes, healthcare services, rehabilitation centres. As a result, the government has to incur additional expenses on these requirements. More importantly, funds may have to be diverted from the key sectors like education and infrastructure to healthcare.

Shortage of Labour:

An aging population means, at some point, there is going to be shortage of labour due to lack of qualified and working age workers. An economy that finds it difficult to employ the needed labour suffers from low productivity, high labour costs and probable losses in the long run.

Japan had a life expectancy of 85 years in 2016. Increasing life expectancy along with low fertility rates have together contributed to the aging population of Japan. Healthcare costs become a priority for the government of such nations as they now have to incur additional expenses for keeping the health of the aging population in check. Though the aging population may have the competence to make their rightful contribution to the society, the declining workforce leads to mounting up of pressure on the productive/working population. Nations may frame liberal immigration policies to fill in the gap between labour demand and labour supply. For instance, nations like Australia and Canada encourage qualified workforce from other nations to migrate to their nation and help their economy grow. This diversification of workforce, however, isn’t always helpful as immigrants may not match the exact job profiles that need filling up.

Changes in economic setting:

An economy with a declining workforce will have different demand patterns than those with an increasing workforce. Retired people have different needs and their medical expenditure is also higher than the working age group. Investments in the healthcare sector become important for such economies. As the retired population receives only a fixed income, the government has the problem of balancing the loss in tax revenues and the additional expenditure on medical services for sustenance.