CHAPTER II REVIEW OF LITERATURE -...

Aspects of Population Ageing and Economic Development: An Empirical Study on Selected States of India

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CHAPTER II

REVIEW OF LITERATURE

2.1 REVIEW OF LITERATURE ON POPULATION AGEING

In a report entitled “The Graying Of The Great Powers Demography and Geopolitics in the 21st

Century”, (2008), Jackson, R., Howe, N. et al. discus about the geopolitical implications of

global ageing, mainly viewing the situation of today’s developed countries and future changes in

developing countries. The findings in this report are summarized into two heads- findings about

the demographic transformation and findings about its geopolitical implications. Some major

findings are - The world is entering a demographic transformation of population ageing. 8 of the

16 nations of Western Europe have a median age of 40 or higher today compare to a national

median age higher than 30 at the beginning of the twentieth century. By 2050, 6 nations will

have a median age of 40 or higher. The coming transformation is both certain and lasting

because anyone over the age of 45 in the year 2050 has already been born and can therefore be

counted. The transformation will affect different groups of countries at different times. Though

nearly every country in the world is projected to experience slower population growth and

population ageing, but there exist diversity. Most of the youngest countries of today, such as sub-

Saharan Africa are projected to experience the least ageing compare to oldest countries of today

like those in Europe. The transformation has a long term economic, social and political

consequences that can affected the developed world. For this the demographic size of the

developed world may change. The growth rates of working age population and therefore the

GDP of the developed country will fall far below their historical trend which declines their

growth rates. As economic growth slows down this will affects economic performance of the


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developed countries. For developing world the transformation brings more varied consequences,

some country drives toward greater prosperity and stability by converting their declining fertility

into higher savings rates, greater human capital development, efficient and open markets, rising

income and living standard and stable democratic institutions. While some other countries faces

new security threats. The share of population and GDP of the developed countries in the total

world will reduce steadily. The population of the developed world grew faster at the era of

Industrial Revolution and its share of the world’s population rose steadily from 17% in 1820 to

25% in 1930. After then its share has declined, by 2005 it stood at 13% and projected to decline

at 10% by 2050. Similarly the collective GDP of developed countries will reduce from 54% in

2005 to 31% at 2050. As a result, the global influence of the developed world will turn down and

a large expansion of newly market-oriented economies as China, India and Brazil will occur. The

2020s will likely be a decade of maximum geopolitical danger throughout the world. In 2020s

global ageing will hit the pick point in the developed countries. The ratio of aged to working age

adults will rush forward specially in the countries which have large post war baby boom

generation. Work force will stop to growing mostly in every place. As the developed countries

face the problem of ageing they will also face chronic shortage of young old man power for their

economies and security forces. To meeting the challenges of global ageing problem the authors

suggested some policy actions, which can be divided in four heads, as- (i) Demographic Policy,

like, help women job balance and children, reward families for having children, improve the

economic prospects of young families, control immigration more effectively etc. (ii) Economic

Policy, like, reduce the projected cost of old age benefits, increase funded retirement savings,

encourage longer work lives, enable more younger people to work, etc. (iii) Diplomacy and

Strategic Alliances like expand the developed world club, invest in development assistance,


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Remain alert to the threat of neo-authoritarianism (iv) Defense Posture and Military Strategy,

like, Substitute military technology for manpower, Create “service alliances” with loyal

developing countries, Prepare for growing casualty aversion, Substitute nonnative for native

manpower.

Albis, H. d’ and Collard, F. (2013), think that, measuring the proportion of older persons based

on a fixed age provides biased information and therefore in their research paper “Age group and

measure of population ageing” suggest a new measure of population ageing. Using the data from

US and other 13 industrialized countries, authors apply optimal grouping techniques to age

distribution based on the relative age of each individual in the population. This method directed

to an endogenous definition of old age that depends on the entire distribution of ages within the

population and therefore, the old age cutoff have to depend on the type of population, the country

and the data at which it is estimated. According to the authors, the main intend of optimal

grouping technique is defining age groups that minimize the average difference of age pairs

within each group, where the dispersion is calculated with a Gini coefficient. The outcome of the

research paper is that, the share of elderly individuals within the total population has not

increased even remained stable in the reference countries. Though the authors also mention that,

the reliability of their proposed method is largely depend on the initial choice of the number of

groups.

Gavrilov, L. A. and Heuveline, P. (2003), in an article entitled “Aging of Population” discus the

definition and measuring system of population ageing, demographic determinants of population

ageing, dynamics, features, future projection and implications of population ageing. According

to them population ageing is a summary term for shifts in the age distribution of a population


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toward older ages. Population ageing is projected to be the most major global demographic

trends in the 21st century and is the direct result of ongoing global fertility and mortality decline.

Writers mentioned two types of measuring system of population ageing, viz., head count ratio

and group of statistical measures. The indicators under first system are (i) the percentage of

elderly people of retirement ages, (ii) the elderly dependency ratio (EDR), (iii) aging index,

sometimes referred to as the elder-child ratio, defined as the number of people aged 65 and over

per 100 youths under age 15. The group of statistical measures of location is median, mean and

modal ages of population. The indicators of head-count ratio simply relate the number of

individuals in large age categories; it does not take into account the age distribution within these

large categories, particularly the elders. On the other hand, the ‘median age’- the age at which

exactly half the population is older and another half is younger is perhaps the most widely used

indicator. The ‘mean age’ of population is used to study the dynamics of population aging. Since

population aging refers to change in the entire age distribution, any single indicator may not be

appropriate for measuring the aging population. Population aging is related to demographic

transition, such as, transition from high rates of fertility and mortality to lower rates of fertility

and mortality leads population to grow older. Population ageing is also influenced by

immigration, as, migration of younger modulate population ageing; on the other hand,

emigration of working–age adults accelerates population ageing. Though all nations are

experiencing growth in their elderly population but the current level is vary widely across and

within regions. The percentage of world population aged 65 and over only increased from 5.2%

in 1950 to 6.9% in 2000, whereas in Europe the proportion is 14.7% in 2000. For a long time, the

highest proportion was found in Northern- Europe (10.3% in Sweden in 1950), but have moved

south by 2000 (18.1% in Italy). The proportion of elderly is lower outside of Europe with the


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notable exception of Japan where it increased from 4.9% in 1950 to 17.2% in 2000. The

proportion of the elderly population in the U.S. (12.3% in 2000) is much lower compared to the

developed countries standard. According to the authors population ageing has some features, as,

(i) population ageing is becoming ‘deeper’ with preferential accretion of particularly old and

fragile people, (ii) population ageing is mainly rapid among women because of lower mortality

rates of them, resulting in ‘feminization’ of population ageing, (iii) lower female mortality

results half of older women are living without spousal support, (iv) population ageing changes

the living arrangements as it increases the number of older people living alone, (v) since older

people have lower income therefore population ageing is associated with poverty, especially in

developing countries. Changing age structure has various socio-economic implications, such as

increase in the older retired population relative to the shrinking working age population creates

social and political pressure on social support system. Except this, rapid population ageing places

pressure on social security programs and is also a great challenge for the health care system.

Gavrilov and Heuveline argued that to face the global trend of population ageing a proper

coordination of international, national and local actions is required. The United Nations and

other international organizations proposed some initiatives to alleviate the adverse effect of

population ageing. These includes reorganization of social security system, changes in labor,

immigration and family policies, encouragement of active and healthy life style and more

cooperation between the governments of different country.

Guillemette, Y. and Robson, William B.P. (September, 2006), in their book, “No Elixir of

Youth: Immigration Cannot Keep Canada Young” discussed the impact of immigration on

population structure and economy of Canada. They argued that higher immigration trend do not

affect the future age structure and ageing problem of Canada’s population and also public


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finances of the country as many Canadians think it can make affect. A constant inflow of

immigrants, though they are young ones does not necessarily revive low fertility populations; in

fact, in the long run it may essentially contribute to the population ageing. Nonetheless, as

immigration is easier to control than fertility, it may appear as an elixir of youth. With the help of

projections based on current fertility rates, current immigration levels and moderately rising life

expectancy they showed that the ratio of the population aged 65 to the population of traditional

working age (18-64) rising from 20% in 2006 to 46% in 2050. This trend of slower growing

population and increasing number of elders will make a worried situation as, because of this

living standards rise more slowly in the future than the rate of past. Along with this age related

expenditures will increase and this will put significant pressures on public finance. Against this

ageing problem Canadians suggest high immigration rate. Higher immigration can replace higher

fertility to raise population numbers and can moderate the imminent slowing down and reversal

in labor force growth and meet specific labor market shortage. But according to the authors,

immigration can influence the age structure of Canada’s population through two main channels –

its level, and its age structure. Empirical data reveals that 15% of the total immigrants in 2004

are less than 10 years old when they arrived and most of the immigrants in Canada are below the

age group of 20 than above the age of 40. Therefore higher immigration would result in a lower

average age of the population and a smaller increase in the old age dependency ratio. Authors

have modeled four immigration scenarios on the basis of several assumptions about fertility,

mortality and migration, and they argued that the old age dependency ratio has been rising since

1971 in Canada and will rise rapidly until about 2030, but it will rise more steeply at around

2012 when baby boom generation will reach at the age of 65. After then the rate of increase will

slows down though the ratio will continuously rising and will reached at 46% in 2050. Total


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population will rises to 39.2 million in 2050 from 32.2 million today. According to the authors

small extent of age filtered migration can make effect on the economic and fiscal condition and

also demographic changes of Canada, but it needs a moderate rate from less than 1 percent of the

population to near about 3 percent for decades, and an average age of 22 years such that every

single immigrant lowers the old age dependency ratio, because old age dependency ratio is

calculated as the number of persons 65 years and over per one hundred persons 18-64 years.

Except this Canadian govt. have to encourage greater labor market participation, higher incomes

and higher tax payments for the long term sustainable economic and demographic growth and

also betterment of countries fiscal condition.

In the paper “Global Population Ageing in the 21st Century and Its Economic Implications”

(December 2005) published by Congressional Budget Office (CBO) as a part of a series of

reports, it is argued that the world is going through a long term demographic transition leaving

the global population averagely more larger and more older. Due to improvements in nutrition,

sanitation, health practices and medical care infant mortality has noticeably reduced and life

expectancy of children and adults has increased. As people live longer the world is facing a hasty

and persistent population growth. As a result of this along with improvement in their economic

conditions, people have begun to bear fewer children. This decline in fertility rate reduces the

population growth and world is facing the incident of ageing. The demographic transition first

started in Europe in 1700 with improvement in health facility and living standards leading to a

primary decline in mortality. After that, step by step the mortality and then fertility rate of people

reduces and the demographic transition going on. Finally in 1960s, elder mortality reduces

because of further improvement of medical facility results increase in life expectancy of the older

peoples. As a result of this life expectancy at birth rise by roughly one third in 20th century. It is


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projected that this trend of increase in life expectancy in developed countries will continue for

few decades in future. Life expectancy at birth has risen from under 30 years in 1900 to about 65

years in 2000 and projected to increase to 81 years by 2100 for the world as a whole. This

demographic transition takes place in all over the regions and countries of the world though the

timing and the velocity differs place to place. Such as the developed countries have experienced

the decline in fertility and mortality and increase in life expectancy more than the developing

countries, but the rate of decline in fertility and increase in life expectancy is higher in

developing countries than the developed countries. Apart from this, high rate of immigration

from developing countries have increases population growth rate for many of the developed

countries along with enlarge population ageing for developing countries. These differences

between developed and developing countries have significant consequences on international

economic trends. In Latin America and Asian countries, the total fertility rate was around 6

births per women in 1960s which is now decreased to around 3 births per women in 2000. It is

projected that fertility rate will fall below 3 children per women within 2040. The total fertility

rate has dropped from 5 children per women in 1950 to 2.7 children per women in 2000 and

expected to decline to about 2.1 children per women by 2050 for the world as a whole. As per

the medium- variant projection, the share of the people aged 65 and older will grow from about

7% to more than 16% within next 50 years, whereas the share of people aged 18 to 64 will

remain constant and the people under age 18 will fall from about 34% to 24% in the same time.

If a country have large share of working age population then its economy will grow relatively

faster. Whereas, if the number of older people is larger than the number of working age people,

then the economic growth will slower again, because, the older people produces less and they

consumes more as they spend large portion of their consumption on health. At that time saving,


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investment and income become automatically lower. As a solution of population ageing some

observers have suggested to increase the rate of immigration from developing countries to the

countries having large share of aged people to increase the working people. Therefore sufficient

number of working people would available to support the elderly people, and thus cost of support

per individual worker will reduce. But recent research suggests that increase of immigration rate

is not the ultimate solution of ageing problem for a country.

Raeside, R. and Khan, Hafiz T.A. (2008), in a paper entitled “The Ageing Scottish Population:

Trends, Consequences, Responses” discusses the trend, causes and consequences of

demographic profile of Scotland. Like many other developed countries Scotland also faces the

problem of population ageing. The authors noticed from Annual Review of the Scottish Registrar

General (GROS, 2003) that the overall population is just over 5 million since last 50 years but

the median age of the Scottish population has raised 31 years from 1951 to 38 years in 2001.

10% of the population is above the age of 71 years now whereas in 1951 10% of the population

was over the age of 64 years. The Economic and Social Research Council (ESRC, 2004:1)

viewed that between 1995 and 2001 the population of this country fell by 1% whereas the

populations of other developed countries like, UK or EU rose by more than double rate, the

population of UK and EU rose by 2.8% and 2.2% respectively. According to GROS the causes

of population fall in Scotland is decline in fertility rate below the replacement fertility with a

high rate of emigration. These make big changes in the age structure and geographical

distribution of the population of Scotland with most immediate effect of ageing of population.

The total period fertility was high in the year of 1964, it was 3.09. After that it declines sharply,

1.70 in 1970 and 1.48 in 2002; though it roses slightly to 1.67 in 2006. One of the reasons behind

the reduction in fertility is as society becomes developed women of that society gained more


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liberty and sovereignty, they have engaged more in workforce. This has led to delay in marriage,

reduction in marriage, and reduction in fertility. In addition to this it has been observed that,

most of the emigrants are of the age group of 15-34 i.e. working age group and immigrants are

over the age of 45 years, specially retired person returning to the homeland Scotland. Over the

period 1951 to 1966 there was a net outflow of migrants at around 35,000 per annum, since

2004, there has been excess immigration of up to 20,000 per annum. Another important factor

behind population ageing in Scotland is increasing life expectancy of the Scottish people. In

1951, life expectancy of Scottish males and females were 64.4 years and 68.7 years respectively,

while in 2001 it was 73.4 years and 78.8 years respectively. It is projected that in 2031 they will

be 79.2 years and 83.7 years. This population ageing has different consequences on Scottish

society as it increases the relative size of the dependent people, creating a burden on public

pension provision and health care, along with these it increases sex imbalance among the older,

increases unemployment and poverty, decreases supply of education, shrinks the domestic

market for home produced consumption goods and decreases the revenue generated from these

markets. At present, in Scotland, the ratio of women to men over the age of 75 years is 2:1, over

one-third of men aged 50-65 years are now jobless, the number of primary schools decreases

from 2418 in 1981 to 2184 in 2006 due to decrease in the numbers of young affecting the entire

education system. The Scottish government has formed and implemented a strategy to turn the

negative impacts of population decline and ageing to an advantage. Key canons of this strategy

are to create a positive image of the old, promote intergenerational exchange, ensure inclusion in

society by promoting participation in the workforce by ensuring that they have suitable skills and

making work more flexible, the use and access of information and communications technology,

participation in lifelong learning, reduction of poverty, and the improvement of the health and


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mobility of the old. Volunteering is promoted to involve the old more in their community. As per

the recommendations of UK Foresight program (Dunnel,2001) Governments have to understand

the need to improvement financial planning for retirement, have to promote public – private

partnerships and have to increase retirement age. A regional policy on migration has to develop

to ensure that the areas facing faster population ageing can receive benefits from immigration.

Nizamuddin, M. (2000), in the article “Population Ageing: Policy Responses To Population

Ageing In Asia And Then Pacific”, says that many countries in ESCAP region (United Nations

Economic and Social Commission for Asia and the Pacific) are now facing the problem of

population ageing. In 2000, 1 in every 11 persons was of the age group of 60 or above, and by

2050 this ratio is expected to reach 1 out of 4. Population ageing is an outcome of rapid fertility

decline and sustained improvement in mortality levels, which ESCAP region is experiencing

now. The total fertility has dropped to 2.7 children per women in 1995 – 2000 from around 6

children per women in 1950 – 1955. Decline in mortality results increase in life expectancy at

birth. In 1950 – 1955, the average life expectancy at birth of the people in this region was 40

years which increases to 66 years in the year 1995 – 2000, and noticeably, improvement in

female life expectancy is higher and faster than the males. Asia and Pacific region is

experiencing faster ageing process than any other regions of the world. From 2000 to 2050, the

proportion of aged people is expected to increase from 9 to 23% whereas the proportion of young

age people is expected to decrease from 30 to 19%. At present ESCAP region contain 9% of the

world’s total aged people in the absolute term which is expected to approximately 15.4% in 2025

and 23.5% in 2050. All these factors emerges some serious issues like, decline in working age

population, increase in the size of elderly dependent population, feminization and gender

disparity. Gradual and fast urbanization in many Asian and Pacific countries leave elder people


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isolated in rural areas, it is supported by the data that, the potential support ratio was 11 in the

year 2000, which expected to decline at 4 in 2050 in ESCAP region. In response to the

recommendations of the 2002 Madrid International Plan of Action on Ageing, recently the

United Nations Population Fund (UNFPA) in collaboration with Columbia University have

launched new initiatives for capacity building in developing countries, like, community

participation, income security, health care, family support and co- residence, improvement in

information and communication development, development in data bases, promotion of geriatric

care etc. Increase in the number of older people in the society means increase in public

expenditure for pension, healthcare and the welfare of older person. On the other hand, if

working age group decreases simultaneously, then production per capita income, saving and

investment all will be decline. So it is recommended that to solve the ageing problem,

government have to implement strong policies and non- government organizations have to work

together with government for social well being.

The “National Policy On Older Persons” formulated by the Govt. Of India at the year 1999

represents a policy frame work for the well-being of senior citizens within the limits of economic

capacity and development as per the effective provision for securities, and the right to public

assistance in case of old age as stated in the Constitution of India. This policy presents a clear

picture of demographic transition of India. A percentage of aged persons having 60+ in the total

population has been a steady rise from 5.1% in 1901 to 6.8% in 1991 and projected to reach

8.9% in 2016. Life expectancy will increase about 9 years from 1986-90 to 2011-16 for males

and for females it will be about 11 years, though men always outnumbered the women in

absolute figures of total number. This results the incidence of widowhood much higher among

females 60+ than among males of the same age group. This population ageing has impacts on the


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macro and also at household level, through huge human reserve and necessary activities to

provide social services and other benefits. The Policy states that the state will extend support for

financial security, healthcare, education, shelter, welfare and other need of the persons, provide

protection against abuse and exploitation, make available opportunities for the development of

the potential and provide services so that they can improve the quality of their lives. Action

strategies of giving financial security, healthcare and nutrition, education, welfare, protection of

life and property, realizing the potentials training of manpower etc are needed for proper

implementation of the policy. With this active participation of non- government organizations,

family, media etc can help the govt. to achieve the goal of well-being of elderly.

Weil, David, N. (March, 2006), in the paper “Population Aging” discusses about the process of

population ageing and how this ageing can affect the aggregate output of an economy. According

to the writer the aspects of population ageing are shift in the distribution of a country’s

population toward older ages, an increase in the population’s mean or median age, a decline in

the fraction of children or a rise in the fraction of elderly in the total population etc. Though

population ageing is occurring in most of the world but more developed countries are facing this

problem more rapidly. Rising life expectancy and declining fertility are the two main

demographic phenomenon behind population ageing among which declining fertility is the

central factor of population ageing. Weil viewed that any economic interaction brings people

together so that their participation is a function of participant’s age and therefore population

ageing has economic effects. He elaborates this by the model of analysis of dependency. People

of some ages produce less than they consume and so are dependent on the rest of the society for

their support. He considers a division of population into three age groups, viz., working age

adults, dependent youths and dependent elderly. Here he assumes that people of all ages have the


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same consumption and output is produced solely by the labor of working- age adults, with no

additional factors of production such as capita. From this diagram based analysis of dependency

Weil achieved two lessons; first one is, the period of rapid increase in old age dependency

especially through which the world’s richest countries are passing now is nothing but the

transitory benefit derived from a decrease in fertility, and the second one is, any change in

fertility can decrease the effect of population ageing in the long run only but in the short run it

leads to increase in total dependency by moving the age structure towards higher from stable

population. This model ignores the process by which the dependent people of society are

supported. In reality there are three methods to transfer resources to the people of dependent age

groups- by their own past savings, through institutions (basically the government) and by their

own families. Referring to Lee (Lee, Ronald, “A Cross-Cultural Perspective on Intergenerational

Transfers and the Economic Life Cycle” in Andrew Mason and Georges Tapinos, eds., Sharing

the Wealth: Demographic Change and Economic Transfers between Generations, Oxford:

Oxford University Press, 2000, pp.17-56) Weil entitled these different methods as ‘reallocation

system’ and argues that the reallocation system affects the overall burden of aging as well as the

distribution of that burden. Capital is an important factor to study population ageing because of

two reasons- accumulation of people allows either individual or society to break the temporal

link between production and consumption, and capital helps to determine the quantity of output

to be divided among workers and dependents as a factor of production complementary to labor.

Relation between ageing and capital accumulation can be analyzed into two channels- positive

and normative. The normative approach deals with the question that how society should respond

to an alarming change of demographics. Common sense suggests that an economy will

accumulate extra capital during the period of low dependency to maintain the consumption into


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the period of high dependency. But both the approaches have some shortcoming features. In

positive channel social planners approach to consider equilibrium of an economy where

consumers can take privately optimal saving decisions given the interest rate, wages, taxes and

government benefits. In developed countries government transfer programs are a major source of

support for dependent people. Population ageing not only rises government spending but also

reduces government revenue. Family is the third channel to support the dependents and Weil

viewed that working age adults of a family have to maintain balance between support for child

dependents and old dependents and therefore they retain low fertility to support elder members

of family more and thus ageing can lead to lower fertility resulting more ageing again.

Caselli, G. and Vallin, J. (1990), in the study entitled “Mortality And Population Ageing” try to

measure the impact of each element responsible for change in age structure such as total fertility,

mortality and migration and affirm that mortality is an important factor behind population

ageing. Their study area was France and Italy and they consider two long periods- 1952 to 1986

and 1986 to 2040. They attempt to discover the extent to which mortality trends have influenced

to change in the age structure since the 1950s and to measure their impact on the results of

population projections made by the statistical institutions of both countries. There are three

possible approaches to measure the mortality trends on population age structure- (i) comparisons

of the stationary population with the life tables, (ii) cohort approach i.e. considering the effect of

population movement earlier to the period studied consists of taking into account the full lifespan

of the cohorts in question, (iii) by distinguishing three components of the variation in population

numbers i.e. trend in numbers of births, mortality variation and migration observed at a given age

and a given period. This approach can be expressed in the equation form as


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r (a, t) = rB (t - a) - ∫ �µ �,��µ�0 d� + ∫ �� ,��µ

�0 d�

Where µ (a, t) and m (a, t) being the mortality rate and net migration rates at age a and date t, the

derivatives established for µ = t- a + �. r (a, t) is the growth rate of population at age a and time t,

rB (t - a) is the rate of growth in births, ∫ �µ �,��µ�0 d� is the cumulated changes in age specific

mortality rates and ∫ �� ,��µ�0 d� cumulated changes in net age specific migration rates. With the

help of available data fitted on the above equation authors analyses that the number of aged

people increases in both the countries in between the period of 1952 to 1986. This increase is

higher for women than for men. On the way of measuring the individual effect of birth rate,

mortality rate and migration rate on the increase of absolute number of aged Caselli and Vallin

found that mortality rate and migration rate has a highly positive effect on population ageing

whereas birth rate alone has comparatively negative effect. Side by side, the decline in the old

age mortality contributed to a larger level to enhance in the numbers of elderly people in France

than in Italy, and for women than for men. For French women, this factor is responsible for more

than 40% of the increase.

Bermingham, J. R. (2001), in the article “Immigration: Not a Solution to Problems of Population

Decline and Aging” tries to find out the answer whether immigration is a solution to the

problems of population decline and ageing on the ground of demographic position of Italy and

United States. This is a synopsis based on the UN study on migration and population ageing.

According to them over the next 50 years the total populations of most of the developed nations

are expected to decline rapidly and the same population will rapidly aged. Considering the

scenario of Italy, the total population is expected to decline by 28%, from 57 to 49 million with


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median age rises from 41 to 53 years and over half of the than population in 2050 is expected to

be older. As per the ‘medium variant’ projections of United Nations, over the next 50 years, the

total population of Europe is projected to decline by 14%, from 729 million to 628 million, with

working age people declines by 25% and elderly population increases from 101 to 173 million.

Japan’s population will drop from 127 to 105 million. Median age will rise from 41 to 49 and

elder population will increase from 17% to 32%. This demographic transition is interplay of

three factors- rising longevity, declining fertility and high rate of migration. To control ageing

stress only given onto fertility and migration, because according to the author societies habitually

demand increases in longevity. Therefore UN demographers examined how far changes in

fertility and immigration can solve the problem of ageing. In doing so they found that increase in

fertility cannot solve the ageing problem immediately because at least 15 years is needed to

reach a new born baby to working age. On the other hand, immigration is not a proper solution of

ageing too, because the immigrants will also become aged once. For the U.S., immigration is

already considerably higher than necessary to retain the working age population at a constant

number. Even so, the nation’s vigorous economy appears to have an insatiable need for ever

more workers from abroad like 10.8 million for the United States, 9.7 Million for Japan, and 93.6

million for Korea per year which is completely impossible. So immigration is not even remotely

possible as a solution to the problem of population decline and population ageing.

Visaria, P. (2001), in the paper “Demographics of Ageing in India” presents a brief data based

scenario of aged people in India. He defined aged as persons ageing 60 years or more as per the

retirement norms followed by Indian Government. Aged people have increased from 19.8

million in 1951 to 24.7 million in 1991, i.e. 189% increase within 40 years. The share of the

older people in the total population has increased by 24% in the same period. For India, in mid


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and late 1940s, the average length of life of a child at birth was no higher than 32 years where

males were in better position than females. In 1991-95, the life expectancy has increased to 60.3

years, where females enjoying an advantage of about 1.2 years over males. That is in 46 years,

the annual average increase in life at birth is about 28 years or about 0.61 year per year. A

Technical Group has prepared a official population projection for the period 1996- 2016 that, life

expectancy for males will increase from 62.4 years during 1996- 2001 to 67.0 years during 2011-

2016. For females it will be 63.4 years to 68.8 years for the same period. It is expected that the

expected length of life will slow down after life expectancy at birth reaches 65 years. This

Technical Group also projected that, while the total population will increase by 49% from 846.2

million in 1991 to 1263.5 million in 2016, the aged will increase by 107% from 54.5 million in

1991 to 113.0 million in 2016. The share of elderly in total population will increase from 6.4% in

1991 to 8.9% in 2016. Ageing of population is an ultimate result of decline in fertility, decline in

mortality and increase in life expectancy rate among which, according to the author, fertility

decline is the main factor. In the absence of fertility decline, mortality decline only leads to

increase in younger age groups, whereas fertility decline controls the number of births or

children in a population and affects its percentage age distribution much faster. It is expected that

the fertility rate will decline to its replacement level of 2.1 by around 2021 from 3.4 or 3.5

children per woman of current level. Visaria discuses some selected characteristics of aged in

India. Female leadership among the aged is one of them. According to a survey data of 1993-94,

about 41 to 42% of the aged were widowed. NSS and Census data represents that only 5.7% of

total population is aged in urban areas in 1991, whereas for rural areas it is 7.1%. The previous

three census data and NSS data have also represent more or less same result. General idea

assumes that urban India must have higher aged population due to better social and economic


44

position but data shows the opposite result. Some causes of such situation are overstatement age

of the rural people and later life migration from urban India to rural India. Difference exists

between young- old (age group of 60-69) and old-old (age group of 70 and over) people.

According to 1991 census, young- old formed 62% of the aged though it is expected that over the

next 30 years, the ageing process will steadily lower the share of the young-old and raises the

share of the old-old. The level of illiteracy is higher among the aged than the population 15 and

over in India. Over 80% of the urban aged males and only 17% of the females were reported as

head of their household in 1993-94. 70% of the rural and 44% of urban aged males was reported

to be working at same time period. The percentage of females was 24% and 11% respectably.

According to a survey report, about 52-54% of the rural and urban aged was suffered from a

chronic disease in 1995-96 and 40% of the rural aged and 35% of the urban aged reported as

physically disabled. 51% to 53% of the aged in India were fully dependent on the others in which

30% and 31% of the males and 71% and 76% of the females of rural and urban areas

respectively were fully dependent on others. But it is a real truth that Indian taxpayers are

unwilling to bear the cost of a ‘welfare state’, that’s why author suggests that government have

to take alternative strategies and policies to meet the physical as well as emotional needs of the

growing number of aged Indians.

Gulati, L. and Rajan, S. I. (1999) analyses the data on ageing, gender differentials in ageing and

widowhood in the article “The Added Years: Elderly in India and Kerala”. They take the

experience of Kerala because Kerala faces this demographic change first and rapidly compare to

the other Indian states and India as a whole. Population ageing is the increase of the proportion

of persons aged 60 and over in the total population. Before 1950s, the pattern of high birth rates

together with high death rates reserved the level of aged far low in Indian. After that, decline in


45

fertility and mortality hastened the ageing process and elderly has grown gradually. In 1961, the

number of elderly in total population was 24 million (5.6%) which increases to 52.4 million

(6.35%) in 1991. Among the major Indian states, in 1991, Assam has the lowest proportion

(5.29) of aged population in the total population whereas Kerala has the highest (8.77); the

proportion for India was 6.58. Ageing process is faster for women compare to men and Kerala

has 20% higher proportion of aged women compare to the whole country. Among the Indian

states Kerala is the only state where females outnumber the males, i.e. sex ratio is favorable to

women; the number of the very old (aged 75 and above) will expected to be 1.97 million in 2026

in which 1.12 million (57%) will be women. Authors argued that the world of the very old will

be the world of women in Kerala. One of the inferences of ageing is the increase in life

expectancy. The life expectancy at birth of Indian women was only 32.5 years in 1951 which

increases to nearly 60 years now. But for Kerala, the life expectancy at birth for women was

already higher than men by 3.8 years in 1960-65 onwards which expected to be 2.9 years during

2020-25. Kerala is experiencing a greater incidence of widowhood among women for this higher

life expectancy rate, which is true for the Indian context also. Relevant data of 1991 shows that,

widowhood for men is higher for India, 15.5% of the total aged people than Kerala 12.9% of the

total aged people, though the ratio is inverse for women widowhood, 54% for India and 58% for

Kerala. Therefore it can be said that, women of Kerala are facing twofold overlapping problems

of ageing and widowhood more and as a result of this, faces some socio-economic problems like

poverty, lack of accommodation etc. in their old ages. Authors demand proper government

intervention to solve these problems.

Chattopadhyay, A. (2004), in her study “Population Policy for the Aged in India” investigates

the needs and demands of the aged in India. Her study is based on a survey on 275 respondents


46

in Mumbai among which a large share is retired male pensioners; some are teachers and civil

servants. This study explores the importance of interweaving development and social security

policies for the welfare of the elderly people. Referring to Myers’ (Myers, G. C. (1982), “The

Ageing of Population”, in International Perspective on Ageing: Population and Policy

Challenges, Policy Document Studies, No. 7, pp. 1-40, United Nations Fund for Population

Activities) author argued that, the pattern of population ageing is different in developed and

developing countries. For this reason, the design of the ageing policies of developing countries

like India are mainly concentrating on the issues arises from ageing rather than to alter the basic

process of population ageing like developed countries. Proving economic and social support to

the aged people is the important issue that emerges from the ageing process. Family and state are

the two important sources of these kinds of support, but referring to Giele (Giele, J. Z. (1982),

“Family and Social Network”, in International Perspective on Ageing: Population and Policy

Challenges, Policy Document Studies, No. 7, pp. 40-74, United Nations Fund for Population

Activities) author has a opinion that, as family size decreases continuously due to low fertility,

family support to the elderly is a matter of concern now. Therefore international organizations

argued for a policy framework for combined help from various societies along with family and

state in the Indian context. The outcome of this survey is- financial security in old age, improved

medical and health care facility, better living arrangements introducing low technology family

care system etc. Based on this demands, Chattopadhyay suggests a bunch of policy framework

for the Indian government. But she also agreed that implementation of these policies needs huge

investment. It needs private- public collaboration.

Turei, S. (2009), in the article “Can We Slow Down The Alarming Rate Of Europe’s Ageing?”

discusses about the ageing process in and its adverse effect in European context. According to


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the author, the demographic process of a particular region, which changes with change with

values and habits of strata and individuals, can influence the growth opportunities of that region

in the long run. Till 90s, the world population was grew at hasten rate after that the growth rate

became decreases and this causes a serious problem of population ageing mainly in developed

countries like Europe and Japan. The causes of population ageing are enormously low fertility

rate along with long life expectancy. The fertility rate of Europe is 1.4 which is far below the

replacement level of 2.1. An estimate reports that European population is decreasing by nearly 1

million each year in the absence of immigrants. Because of low fertility the median age of

European people increases and expected to reach 47 years by 2050. The proportion of people

over 85 years will be tripled by 2050 and children under 14 will fall by nearly one- fifth. The

working age population will drop by 16% (48 million) within 2003 to 2050 and the number of

people over 65 will increase by 77% (58 million). The ration between working age population

and over 65s will be 2:1 from 4:1. These changes will affect the economy in two ways- (i) being

less dynamic, innovative and adaptive the elderly people will produce less, therefore the ultimate

production of European economy will decrease. (ii) Government has to face extra financial

burden to give social and economic support to the elderly. Turei proposed three major ways to

solving this problem – (i) A huge migration can solve the problem. The present rate of migration

is 0.3% per year which is just enough to balance the population decline in Europe, but it is far to

decrease the negative effect of population ageing. (ii) Encouraging people to work longer and

retired at a later age may be another solution of the problem. As the average life of European

people increases by 5 - 6 years, they are now able to work longer. The overall pay burden for the

government to the working people are much less than the pension burden to the retired people.

(iii) Increase in fertility rate is the long run way to terminate the adverse effect of population


48

ageing and will improve the dependency ratio. At present European government has encouraging

people to raise fertility rate by giving them various benefits and allowances.

Wright, R. E. (2004), in the report “Population Ageing And Immigration Policy”, evaluates the

impact of increase in net immigration on population decline and population ageing in Scotland.

Population ageing is defined as the redistribution of relative population share from younger

towards the older age groups. Fertility, mortality, immigration and emigration are the four main

demographic determinants of population ageing among which fertility is the prominent one. The

share of aged people in Scotland’s total population increases rapidly which increases the number

of persons who demand pension and other state supplied facilities like health care, residential

services, housing etc. On the other hand, the persons who can pay for this increasing demand that

is the working age groups continuously shrinking due to decrease in fertility. This imbalance

imposes a negative effect on ‘pay-as-you-go’ welfare system of Scotland and decreases the

standard of living of Scottish people. In the period of 1951 – 2001, the Scottish population has

remained above five million and the absolute size of population has not varied much in this

entire period. This indicates that the annual average growth rate of Scottish people is

approximately zero in between 1951 to 2001. The fertility rate in Scotland was continuously

increases in 1950s and 1960s; even in 1965 it reaches to 3.2 births per women, which is far

above the replacement level. After that it decreases rapidly, and at present it is 35% below the

replacement level. In 1951, the life expectancy at birth for men was 64.4 years and for women it

was 68.7 years, by 2001 it reaches to 73.1 years and 78.6 years respectively. This indicates that

the mortality of Scottish people decreases continuously. In most of the period of 1951 to 2001,

the number of emigrants are higher than the number of immigrants, since a major share of the

emigrants or immigrants are from younger age groups, therefore it can be said that Scotland loses


49

a large part of their working age people, which causes population ageing as well as decline in

total population also. Though after that the situation inversely changed, but the net migration

never exceeded 1% of the total population. Based on some assumptions, Government Actuary’s

Department (GAD) has made projections of Scottish population for the period of 2001 to 2041. It

is projected that Scottish population will decline by 10% from the current level. The number of

people aged 65 and over will increase from 8000,000 in 2001 to 1.2 million by 2041, i.e. an

increase of about 50%. The people of age group of 15 and less will decrease by about 30% in

between 2001 – 2041. The share of aged people in total population will raises from 16% to 27%,

and share of aged under 15 will decrease from 18% to 14%. Increase in fertility rate may be one

of the solutions of population decline and population ageing problems, but it needs a high rate-

about 35% of the replacement level and time consuming too. Increase in immigration rate may

be the other solution. But it will be effective only then when the migrants are of younger age

groups. Projected data represents that to control population ageing and population decline, 50000

net migrants per year is required, which is near about 1% of the total Scottish population. To

achieve this target author suggests some immigration policy like visa condition etc. to be

followed by Scottish government.

Kim, I. K. (2000), in an article entitled “Policy Responses to Low Fertility and Population

Ageing in Korea”, discuses the demographic prospects in Korea, consequences of low fertility

and population ageing in Korea and policy options to low fertility and population ageing.

According to him, the demographic transition in Korea has started from the beginning of 1960s

due to the interaction of rapid socioeconomic development and full-scale adoption of family

planning programs. The gross national product (GNP) grew at 7% annual rate from the period of

first five year economic development plan (1962-67). Simultaneously, the national family


50

planning program has been running very successfully since 1962. The crude death rate decreased

to 16 in 1960 and then 5.3 per thousand in 1996 from its very high level of 33 per thousand in

1955. This decline in death rate results gradual increase in life expectancy at birth, as it increases

to 69.5 years for men and 77.4 years for women in 1996 from 57.2 years and 64.1 years

respectively. The crude birth rate was also very high in 1960 at 45 per thousand. This decreases

to 23.4 in 1980 and further 15.2 per thousand in 1996. Total fertility rate decreases from 6 in

1960 to 2.7 in 1980. In 1984, it decreased to below replacement level and in 1995 it falls at the

level of 1.74. The ultimate result of all these demographic changes in Korea is population ageing

in both absolute and proportionate number. The proportion of the people aged 65 and older have

increase from 3.3% in 1966 to 5.9% in 1995 and expected to reach 19.3% in 2030. Population

ageing has its consequence on dependency ratio and ageing index. The dependency ratio of the

population aged 65 and over is projected to increase to 25.2 in 2030 from 8.3 in 1995, the ageing

index also expected to increase from 29.8 to 120.6 in the same time period. According to the

author, the population of Korea will reach its peck level in 2030, after than it will decline. The

UNDP has projected that the working age population in Korea will decline by 6.4 million from

1995 to 2050. Korea is a strongly boy preferred society, and low fertility has increase the sex

imbalance in this country. Low fertility and population ageing affects the living arrangement in

Korean society, most of the aged people are bounded to live alone without their family now. This

creates lack of financial security and health care security for the elders, especially for the aged

living in rural areas than in urban areas. To solve the population problems arises from low

fertility rate; Korean government has introduced a new population policy in 1966 mainly

focusing on quality of life rather than population control. One of the objectives of this new

policy is to maintain the below replacement level of fertility, though this further accelerate


51

population ageing. According to UNDP report (2000), increase in migration level is one of the

solutions of population ageing in Korea. Korea needs approximately 6.4 million immigrants in

between 1995 – 2050 to keep constant working age groups. So to maintain this huge immigration

level, Korean government has to follow a new migration policy.

Peterson, P. G. (1999), in the article “Gray Dawn: The Global Aging Crisis” says that the

graying of the developed world’s population is one of the major global hazards in the 21st

century, they are experiencing an unparalleled growth in the number of their elderly and decline

in the number of their youth. This process is popularly known as population ageing. Global life

expectancy has grown very first in the last 50 years. People aged 65 and over were only 2 – 3%of

the total population until the Industrial Revolution. But at present they amount to 14% and

expected to reach 25% even close to 30% in some countries by 2030. Working age population

will shrink rapidly, for example, in case of Japan, 25% working age people will drop within 2000

to 2010. The ratio of working tax payers to non working pensioners in the developed world is

around 3:1 at present, by 2030, the ratio will be 1.5:1 and for some countries like Germany and

Italy it will be 1:1. As per a projection of the United Nations, it is estimated that the number of

people aged 64 – 84 will grow from 400 million to 1.3 billion, people aged 85 and over will

grow from 26 million to 175 million and the number of people aged 100 and over will grow from

135,000 to 2.2 million for worldwide by 2050. Decrease in fertility step up the global ageing

trend. At 1960s the global fertility rate was 5, which decreases to 2.7 by 1995 in most of the

developed countries. Increase in life expectancy, urbanization, feminism, rising female

participation in the workforce, new birth control technologies, legalized abortion etc. are the

reasons behind the falling birth rates. Ageing developed world is facing the problem of huge

decline in their total population too. This type of gap in fertility and population growth rates


52

between developed and developing countries will rise in demand for migration of workers from

developing countries to developing countries. This global crisis of population ageing has

negative impact on economy, politics and society. It may threaten the democracy and security

commitments of a country also. An official projection suggests that, developed countries have to

spend at least 9 – 16% of GDP within next 30 years to finance the old age benefits given by

them. Increase in tax rate or borrow from other countries is not feasible way to meet this extra

demand, because it impose adverse effect on economy through the channel of higher borrowing,

higher interest rates, higher taxes, less savings, lower rate of productivity and wage rate growth.

According to the author, to minimize these negative effects, timely policy reforms is necessary,

such as, tight limits on public health spending, modest pension benefit formulas, new personally

owned saving programs that allow future public benefits to shrink as a share of average wages. It

is necessary to establish a new way of thinking and a unique opportunity for young and old

nations to work together to face the global ageing crisis.

Jackson, R. and Howe, N. (2004) in their book “The Graying of the Middle Kingdom”, mention

that falling fertility and rising longevity are the causes of demographic transformation called as

population ageing throughout the world so as for China also, and occurs at high speed compare

to the other nations of the world. In 2004, the person aged 60 and over was only 11% of the total

population, which is projected to rise to 28% by 2040. The fertility rate in China in 1970 was 5.8

which is now 1.8; life expectancy has risen from 41 years to 70 years in the same period. China

implemented its economic reform policy at 1978 and shows a very impressive growth rate. But

still it is a low income country. China produces only 4% of the global GDP, whereas, U.S. which

have less than one fourth of China’s population produces 32% of the global GDP. According to

the World Bank (2000), near about 204 million Chinese still lived in horrible poverty having


53

income less than $1 per day. Therefore it can be said that, China may be the first major country

which will grow old before it grows rich. Along with other demographic factors, China’s ‘single

child’ policy declines its working age population within the next ten years. By 2015, China’s

large baby boom generation will start to enter into elder hood. According to the authors, like

many other developed countries, China also had postwar baby boom, though it was the result of a

rapid decline in child mortality rather than a rise in fertility. This baby boom generation is now in

their thirties and forties, i.e. working age adults. The working age adults in China is now growing

by about 10 million each year, as a result, finding jobs for large working age population is a big

challenge now. But as the process of population ageing going on, the working age population

will shrink and job shortage problem will minimize; though create another problem of labor

shortage. China has to take immediate actions to meet the ageing challenges without

overburdening the working age population and maintaining the speed of economic growth. And

according to the authors, if China fails to do so it must face an uncertain economic future. To

care the rapidly growing elderly, China has to urgently reform its basic pension system. China’s

basic pension system only covers the urban labors; in 2002 it covered 45% of the workforce

mainly employed in urban areas- state and collectively owned enterprises. Though, now days,

China’s government has extended its pension system to cover the rural workforce also. Recently

government implemented a plan to transition from a purely pay-as-you-go system to a new

system of scaled-back pay-as-you-go benefits and personal retirement accounts. It is a fact that

most of these plans are running through different problems and more drastic steps are needed to

make successful them.

In the report “Dynamics Of Population Ageing: How Can Asia-Pacific Respond?” presented by

‘Economic And Social Commission For Asia And Pacific’ in the expert group meeting on


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development issues and policies (8 – 10 December, 2004), it has been argued that, population

ageing that is the process of increasing the share of elderly population in the total population is

one of the distinct demographic events happening in most of the developed and developing

countries of the world so that for Asia-Pacific region also. In this region the share of the elderly

people aged 60 or above was 6.8% of the total population in 1950, which increased to 8.8% in

2000 and expected to increase 14.7% by 2025 and further 22.6% by 2050. The share of the old

aged living will increased from 54% of the world’s total to 63% in the same time period. By

2050, three countries out of five countries which are expected to have more than 50 million older

people are from Asia-Pacific region. These countries are China (437 million), India (324 million)

and Indonesia (70 million). Rapid decline in mortality and fertility rates are the main

determinants of population ageing. Improvement in medical facility and health services declines

both maternal and adult mortality. The infant mortality rate in developing countries has fall by

58% during 1950 – 1075 and by 41% during 1975 – 2000. This decline in mortality further leads

to increase in life expectancy of people. In Asia, life expectancy has increased from 63% to

67.4% or by 26 years, and by 13.5 years or from 22% to 74.4% in the Pacific in the same time

period. The fertility rate was very high in Asia-Pacific region until 1960s. During 1950 – 1955,

the fertility rate was 5.9 children per women in Asian region and 3.9 children in the pacific

region. This high fertility rate sharply declines during the last quarter of the twentieth century,

and the Asia-Pacific region witnesses a 40% decline in the fertility rate. There are some socio-

economic factors behind this decline in fertility, such as, delay in the age of first marriage, giving

more priority to career development than marriage by educated women, improvement in pension

schemes, population control policies and family planning programs introduced by governments

etc. Another feature of population ageing in Asia-Pacific region is the increase in the relative


55

ageing of the old aged population. The share of population aged 65 and over in the world as a

whole is expected to increase from 52% in 2000 to 63% by 2050, whereas it will drop to 37% for

rest of the world. The countries whose populations are already ageing would experience a rapid

ageing of the older population whereas the rest will experience a rapid ageing of the population.

Population ageing also raises gender imbalance among the elderly. Empirical data shows that the

women will outnumber men in ageing process. The share of women aged 65 or older is expected

to increase from 6.5% of the total aged people in 2000 to 18.4% by 2050, while the share of men

will be 5.3% to 15% in the same period. Population ageing has great implications on economics

and society as well. Population ageing decreases labor supply by decreasing working age groups

(15 – 59 years). In Asia-Pacific region working age groups will fall from 61% in 2000 to 58% in

2050. On the other hand, demand for labor increases day by day in various labor intensive

services like, old age health care, institutional, social and home care services. So ageing process

creates an imbalance in demand and supply of labor in labor market. Ageing process has

implication on saving and investment also, as older people save less and consumes more. On the

other side, working age people earn more, save more and invest more. In many countries of

Asia-Pacific region follow the pay-as-you-go pension system. Rapidly increasing aged people

creates financial burden on governments to provide satisfactory public pension schemes. Along

with this, to provide additional health care to the aged people, the developing countries are

bounded to increase public debt. This leads to increase tax burden on working age people in this

region. All these implications have an ultimate negative impact on economic growth along with

raising the problem of poverty, isolation and discrimination. To face this problem of population

ageing reformed policy implications is needed in the area of health and social security system,


56

pension system, market reform specially labor market reform etc. And to do this, public-private

collaboration is very much essential.

In the report of the Second World Assembly on Ageing (8-12 April, 2002), conducted by United

Nations in Madrid, it is mentioned that due to an enormous increase in life expectancy in

twentieth century the number of older person aged 60 or over will increase from 600 million to

approximately 2 billion in 2050 in the twenty-first century globally, but this increase will more

rapid in developing countries. This demographic transformation has great political, social and

economic consequences. This will hamper the young-old balance. Whereas in the mid-century of

20th century the share of young and old is almost same, in the 21st century, the proportion of aged

person will increase from 10 to 21% by 2050 and the share of children is projected to decline

from 30 to 21%. The population ageing presents a major resource challenge. Developed

countries have been able to age gradually, they face challenges resulting from the relationship

between ageing and unemployment and sustainability of pension systems, whereas developing

countries face the challenge of simultaneous development and population ageing. Population

ageing matters in developing countries more especially in the first half of the twenty- first

century. In these countries, the proportion of older person is expected to rise from 8 to 19% and

proportion of children expected to fall from 32 to 22% by 2050. The theme of the International

Year of Older Persons, 1999 was ‘a society for all ages’, this theme enclosed four dimensions-

individual lifelong development; multigenerational relationships; the interrelationship between

population ageing and development and the situation of older persons. On this ground, number of

objectives and goals has been setup for betterment of the older persons. Some of the objectives

are- (a) The full realization of all human rights and fundamental freedoms of all older persons;

(b) The achievement of secure ageing, which involves reaffirming the goal of eradicating poverty


57

in old age and building on the United Nations Principles for Older Persons; (c) Empowerment of

older persons to fully and effectively participate in the economic, political and social lives of

their societies, including through income-generating and voluntary work; (d) Provision of

opportunities for individual development, self-fulfillment and well-being throughout life as well

as in late life, through, for example, access to lifelong learning and participation in the

community while recognizing that older persons are not one homogenous group; (e) Ensuring the

full enjoyment of economic, social and cultural rights, and civil and political rights of persons

and the elimination of all forms of violence and discrimination against older persons; (f)

Commitment to gender equality among older persons through, inter alia, elimination of gender-

based discrimination; (g) Appreciation of the crucial importance of families, intergenerational

interdependence, harmony and reciprocity for social development; (h) Provision of health care,

support and social protection for older persons, including preventive and rehabilitative health

care; (i) Facilitating partnership between all levels of government, civil society, the private sector

and older persons themselves in translating the International Plan of Action into practical action;

(j) Harnessing of scientific research and expertise and realizing the potential of technology to

focus on, inter alia, the individual, social and health implications of ageing, in particular in

developing countries; (k) Recognition of the situation of ageing indigenous persons, their unique

circumstances and the need to seek means to give them an effective voice in decisions directly

affecting them. Various central themes running through the International Plan of Action on

Ageing, 2002 linked to these goals, objectives and commitments. The Commission for Social

Development will be responsible for follow-up and appraisal of the implementation of the

International Plan of Action on Ageing, 2002; this Commission has to assimilate the different

dimensions of population ageing as contained in the International Plan of Action in its work.


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Member states should essentially and systematically review the implementation of the

International Plan of Action on Ageing, 2002 for its success.

Rajan S.I. (2006) in his paper “Population Ageing and Health in India” comprehensively studies

the ageing process and the health status of the aged people in India. For this he considers the

time period of 1961 to 2001. According to him, a combination of high fertility and declining

mortality is the main cause of increase in the elderly population during the twentieth century in

many third world countries. Though available studies on ageing suggested that fertility had

played a leading role in the ageing process compared to mortality. Indian census 2001 shows that

the proportion of elder people in the total population rose from 5.63% in 1961 to 6.58% in 1991

and further to 7.5% in 2001; and expected to reach 17% in 2051. From relevant data Rajan finds

out that India is one of the few countries of the world where males outnumber the females among

the elderly. This is because the life expectancy at birth of males is slightly higher than the

females till the first half of 1990s; though after that in turns in opposite. In India there has been a

substantial reduction in mortality compared to fertility since 1950. Decrease in fertility and

mortality rate along with increase in life expectancy rate raises the proportion of older people in

total population in India. Author projected that the older population of India aged 60 and above

will increase from 77 million in 2001 to 301 million in 2051. Another finding is that longer life

span of women and tendency of marry elder man of women is the main two reasons of gender

disparity in widowhood in India. According to the census 2001, 33.07% elderly in India are

living without their spouse among which the female share is 50.06%. The oldest old (80+)

among the elderly in India is expected to grow faster than any other age group in the population.

Among the elderly urban and rural differences with respect to age were found to be negligible.

There exists a wide range of difference between males and females in respect of dependency.


59

According to the NSS report 52nd round, July 1995 to June 1996, it is found that 45% of male

and 58% of female in rural areas are fully dependent on others for food; in urban areas these

ratios are 46% and 64% respectively. Rajan argued that older people suffers from different

chronicle diseases and mental illness more than younger age groups. In India, since most of the

aged people live alone and economically dependent on others therefore, government has to

implement separate and particular health programs to provide health security to the aged.

Bhagat, R. B. and Unisa, S. (2005), in their paper “Ageing and Dependency in India: A new

measurement” modified the measurement of dependency and applied it to the Indian situation at

the state level. According to them, increase in life expectancy due to decline in mortality and

simultaneous decrease in fertility rate causes the phenomenon of population ageing. In India,

mortality starts decline from 1920s and fertility has been declining from the early 1970s; these

results a sharp growth of India’s population along with population ageing. Authors suggest three

types of measures of dependency, namely (a) old age economic dependency (b) adult

dependency and (c) relative dependency; based on which inter-state variations and gender

differentials in dependencies have been studied. The study showed that relative dependency of

the old age population is lower than the adult population. In the demographic literature the

burden of elderly is generally measured by the old age dependency ratio. The tacit assumptions

that underlie this measure are that old persons are generally economically active. However this

may not be true in reality if a significant number of old persons are economically inactive, or are

not able to get jobs. Therefore a modification in the measures of dependency is needed.

Considering these aspects the authors modified the age dependency ratio, taking into account the

working/ non-working status of the population by age groups. The present study showed that a

significant proportion of Indian adults are dependent, which is true for inter-state level also.


60

Writers included the gender dimension and observed that the gender is an important dimension

of economic dependency. The old age economic dependency was twice as high among females

as males. One of the reasons of this is that the females are expected to be housewives and home

makers during their adulthood and they enter into their old age they counted as economically

dependent. Similarly disparity in old age economic dependency demonstrated that with rising

income and literacy, women were increasingly found to be economically active after age 60. On

the other hand, a substantial proportion of older persons are also found to be working and they

could not be counted as dependents. This paper employed a measure of economic dependency of

older persons and also tried to measure their relative dependency vis-à-vis the adult population.

The study showed that in India, in fact, the adult population contributes more to economic

dependency than the old people. Further, the various states of India differ widely in socio-

economic conditions and hence there is no uniform pattern in the economic dependency of older

persons. Old age dependency is higher in Kerala compare to the other states of India. A

correlation analysis represents that child dependency is significantly related with different socio-

economic indicators like per capita income, per cent of urban population, share of working force

in agriculture and literacy level. Whereas old age dependency is significantly negatively related

with percentage of workforce in the agricultural sector.

Bhattacharya P. (2005) in his paper “Implications of an Ageing Population in India: Challenges

and Opportunities” presents the probable impact of the aging population in India, the challenges

to be met and the opportunities to be exploited. He also mentions that, India is not outside from

the worldwide phenomenon of population ageing. Census reports of India indicate that during the

last 50 years the Indian population has approximately grown by tripled, but the number of elderly

Indians has increased more than fourfold. The United Nations predicts that the Indian population


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will again grow by 50 percent in the next 50 years, whereas the elderly population is projected to

grow another fourfold. It envisages that the median age of the population will increase gradually

from 23.4 years in 2000 to 30.3 years in 2025 and, finally, to 37.9 years in 2050. Side by side,

the old age dependency ratio will go up from 13.0% in 2000 to 32.8% in 2050, while the young

dependency ratio is expected to drop from 58.5% to 30.4% by that time. Accordingly, the aging

index will increase from 22.1% to 108.1%. Indian societies are rapidly changing due to the

process of urbanization; higher aspirations among the youth, the increasing participation of

women in the workforce and few skilled professionals are immigrate to outside India for better

placement. All these factors have led to the attrition of the joint family system and the

emergence of nuclear families. Hence, the elderly people are gradually becoming alone in their

respective families. Moreover, due to some habits and unhealthy lifestyles, the elderly Indians

are suffering from various physical and mental diseases apart from the other gerontological

problems. But, according to the author, the healthcare facilities for the aged Indians are not at all

satisfactory. An aged person also has the right to choose his personal needs and aspirations,

depending upon capacity. The Planning Commission of India assessed that about 92% of

working Indians do not have any formal old-age income. Accordingly, the Project Old Age

Social and Income Security (OASIS) Committee projected that these people may go downwards

below the poverty line as a result of the non-availability of adequate post-retirement income.

Therefore it needs to draw a suitable framework to provide financial and other supports to the

aged. Effective investment in several fund-scarce areas such as infrastructure, capital markets

and human resources will make the Indian economy one of the strongest in the world.

Mahapatra S. (2004) in her study “Population Ageing: An Overview” tried to give an overview

of the population ageing. The author mentioned that population ageing is a universal


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phenomenon, though it varies country wise depending upon fertility, mortality and mortality

trends. Developing countries are ageing faster than the developed countries. Till 1998, Italy had

the largest proportion of older population which replaced by Sweden by 2000. The paper showed

that world’s population has continued on its significant shift from a state of high birth and death

rates. It is predicted that, one out of every five persons will be aged 60 or above by 2050, which

is now one out of every 10 persons. Mahapatra also claims that 70% of the total elderly

population either suffers from lack of family support or lack of old age care. She also gives a

clear picture of the India’s elderly growth giving emphasis on gender and ageing. India is vast

country sharing 15% of the world’s population. According to the census report 1991, 6.7% of the

total population in India is from the age group of 60 or above. Since the life expectancy of

women is higher than men, therefore the percentage of women elderly is higher than their men

counterpart. Old people suffer from different abuses and financial and living insecurities.

Therefore govt. needs to plan a program to give them security. Various NGOs and private

consultants may also take steps to care the aged.

Dhar A. (2007) in a report “Ageing population on the rise: survey” mentions that most of the

countries are facing ageing rapidly due to decrease in fertility rate and increase in life expectancy

or longevity. According to the World Economic and Social Survey, 2007 it is expected that an

increase in the population of over 60-plus people will account for about half of the total growth

in the world population between 2005 and 2050. According to the survey, developed countries

experienced the problem of population ageing much more than developing countries; the

proportion of older persons in the developed countries is 21% whereas in developing countries it

is 8%. It is expected that 79% of the total aged will live in developing countries by 2050. Dhar

mentioned that a remarkable feature of population ageing is the ageing of old age groups itself.


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People aged 80 or over are rapidly increasing. They are 1.5% of the total world population now,

which is expected to reach to 400 million till 2050. As the life expectancy of female is high, they

outnumber men by 70 million in the age group of 60 or over. This trend is more or less same for

the age groups of 80 or over. Author suggested a universal social pension scheme to afford a

minimum income security to the aged and keep them outside of poverty.

Nahar, K. Z. (2001) “The emerging elderly population in Bangladesh: Aspects of their health and

social situation” aimed to ascertain a knowledge base about facet of the health and social

situation of elderly people in rural and urban Bangladesh. This country is one of the 20 countries

of the world having largest elderly population. By 2025 it will have 44% of the world’s total

elderly population. Author also aimed to adapt existing instruments evaluating health status in

terms of gender sensitivity and cultural relevance in the cultural context of Bangladesh. A multi

stage sampling method was used to select the study sample of elderly men and women aged 60

years and older (N=786) from a multi dimensional survey. Major findings of this paper are

approximately 90% men are married whereas 67% women are widowed. 98% of all elderly

people have children. 70% of elderly men are engaged in paid work while women are in unpaid

work. More than 95% of the elderly people reported experiencing health problems and most of

them are suffered from multiple health problems. More health problems were reported by women

compared to men and in the rural region compared to the urban. Support from family members in

old age was found to be strong in Bangladesh. It need to be recognized the differences within the

elderly population on the basis of regional and gender to formulate social and health policies for

elderly people in Bangladesh.


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Dayabati S. and Bagga, Amrita (2006) in their book “Ageing in Women: A Study in North-East

India” deliberate the problems of ageing specifically among women of North-East India. The

analysis of living arrangements of the elderly revealed that nuclear families are becoming

common in both the groups of Meetei of Manipur and Assam. The authors highlighted the effects

of migration and urbanization, mainly an older women’s physical health and their physical

elements in this study. The number of elderly women living alone is on the rise. More than half

of the women under study were widows. Incidence of widowhood increased radically from

“young-old” to “old-old” in both the groups under study. They argued that population ageing has

increased more rapidly in rural areas than the urban areas in; along with rapid increase in

migration of young women. These results, women outnumber men in case of ageing in north-

East India, feminization of farming rises day by day and farming is largely taken care by older

women, which can be termed as ‘geronto farming’.

Karkal, Malini (1999) in the paper “Ageing and Women in India” draws a picture of population

ageing in India with giving special attention to women. Population ageing is the changes in the

structure of a population. This change occurs due to change in birth and death rates. These

further causes decrease in the share of young age groups and increase in the life expectancy rate.

As per the United Nations older population classification, Indian population falls in the category

of ‘aged’, i.e., the population whose growth rate is negative. Another indicator to measure future

growth rate of population is total fertility rate (TFR), i.e., the estimated average number of

children a woman will bear. TFR=2 is the sustainable rate that stabilize the population. TFR

higher than or lower than two indicates that the population will increase or decrease respectively.

According to National Family Health Survey (NFHS), TFR for India was 3.3 in 1992-93. It is

decreasing rapidly and projected that In India TFR will soon be lower than 2. In 1901, there were


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12 million 60+ aged people in India which increases to 19.61 million till 1951 and rose to 56.68

million in 1991. Till 1951 the number of aged women was higher than men though after 1961

men outnumber women in case of ageing. Kerala has the highest percentage of aged population,

8.5% followed by Himachal Pradesh, Punjab and Tamil Nadu. Sex ratio also favors men than

women in India. According to census 1991, there was a numerical excess of 31.3 million men in

India. Assuming parity in age group 1 to 14 there were estimated 7.8 million fewer girls than

boys and for ages 0 to 19 the number of missing girls was 13.3 million. Indian women are

suffering from malnutrition and different diseases more compare to men. They also face different

kind of physical and social abuses. As per the NSS 42nd round report, 97% of men and only 14%

of the women were independent in India. Census 1991 reports that about 44% of the elderly

women and 81% of the elderly men were living with their other halves.

Harper, S. (2008) in her research paper “Generation and Life Course: the impact of demographic

challenges on education 2010-2050” draw the future trend of education in respect of ongoing

worldwide demographic change. According to United Nations’ forecasts, in most developed

countries the population aged 60 years and over is expected to increase from 20-30% by the year

2050, for developing countries the ratio will be 8-20% and will be just 8-10% in the least

developed countries. This demographic transition has happened mainly due to increase in the life

expectancy of people, declining fertility and mortality level, which results, a decrease in the

proportion of younger people, as well as, the labor class of any country and increases the old

dependency ratio. Therefore time has come to consider a new distribution of working life

between the generations through various skilled developing trainings to the aged people so that

they can work long. This changes the present key role of education, and makes a shift from

formal education to technological and life time adult education. The researcher suggest a new


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framework of education ‘firstly education 2010-2050’, dealing with the issues like, formative

education, education as a lifestyle choice, education to enhance employment prospects, education

to enable full citizenship.

Nizamuddin, M., Ahmad, J. S. and Maqsood, F. in an article entitled “Demography of Aging”

presents an overview of population ageing in context of developed and developing countries.

According to the authors’ achievements and enhancements in health services specially lowering

in fertility and mortality rates causes the phenomenon of population ageing. Referring from

various United Nations Population Ageing reports of various years they say that most of the aged

people of the world live in less developed countries. Worldwide elderly people counts 600

million in 2000 which increases to 2000 million in 2050. Among these aged people number who

lived in developing countries increases from 8% to near about 28% by the same time, whereas

for developed countries this ratio reaches from 20% in 2006 to 32% in 2050. Worldwide 61

countries (44% of world’s population) are at or below replacement fertility at 1995-2000 which

reaches to two third of 7.2 billion (world’s projected total population) till 2015. It indicates that

developing countries face the process of population ageing faster than developing countries.

They identified three features of population ageing- (i) most of the aged people live alone, (ii)

females are experiencing rapid ageing process indicating feminization of population ageing, (iii)

most of aged people especially, in developing countries are living below the poverty line.

Authors mentioned a demographic trend which reflects that 51% of global aged people live in

cities. 63% of aged people in developing countries live in rural areas and 74% of aged people in

developed countries live in cities. This data raises a serious issue that since older people are

comparatively large in number in rural areas of developing countries therefore these regions are

facing the less production and more consumption crisis.


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Mirkin, B. and Weinberger, M. B. in the paper “The Demography Of Population Ageing” argued

that decrease in fertility and mortality rates has brought an evolution in the age structure of the

world population. They represent an interesting future projection of world population. According

to them, by 2050 the number of children (0-14 years) and the number of aged (60 years or old)

will be same, and the number will be nearly 2 billion. Aged people (60 years or old)

encompasses 10% of the total population in the world in 2000, which projected to increases to

22% in 2050. Authors argued that there exists a clear difference between more developed, less

developed and least developed regions in terms of population ageing. In 2000, the number of

aged was 20% of the total population in more developed regions, 8% in less developed regions

and 5% in least developed regions; these ratios is projected to increase to 33%, 21% and 12% for

more developed regions, less developed regions and least developed regions respectively in

2050. Asia has the largest share of world’s older person with 53% following by Europe with

24%. But by 2050, where the share of older person in Asia will increase to 63% there it will

decrease to 11% in Europe. As per the United Nations population projection, the fertility of all

major areas of the world will stabilize at replacement level by the year 2050. By 2150, 30% of

the total population will be aged whereas only 18% of the total population will be children. At

that time the number of aged 60 years or old will be 3 billion which comprises nearly one person

old among every 3 person alive, and the number of oldest old person aged 80 years or old will be

1.2 billion that is one oldest old in every 10 persons. There exists gender imbalance in aged

people also. 81 men out of every 100 women are aged (60 years or old) in the world in 2000,

whereas this ratio for oldest old persons (80 years or old) is 53 men out of every 100 women.

This gender difference of aged persons is higher in developed regions than the less developed

regions. Higher mortality rate of men, difference in life expectancy rates for men and women,


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and the heavy loss of males in some countries during the World War II may be some of the

reasons behind this kind of gender divergence. According to the authors, old-age dependency

ratio is one of the important indicators of population ageing and between the periods 2000 -

2050, the old age dependency ratio will be twice in more developed regions and more or less

triple in less developed regions from current situation. Urbanization is another feature of

population ageing. In 2000, 51% of the world’s older people live in urban areas which expected

to increase to 62% by 2025. But this ratio is quite low for less developed regions as only 37% of

the older persons of that region are live in urban areas whereas for more developed regions this

ratio is 74%. Authors conclude their paper by saying that population ageing has great implication

on economic, social and individual level and less developed countries will have less time to

adapt this problem of population ageing. Proper policy should make to reallocate the limited

resources for welfare of the state keeping the ongoing demographic change in mind.

Dr. Prakash, I. J. (1999), in the paper “Ageing In India” states that India is a vast country with

geographical and cultural variations. 16% of the world’s population lives in India among which

72% live in rural areas of this country. According to the author, population ageing is a significant

outcome of the process of demographic transition. Shifting from high fertility and mortality rate

to low fertility and mortality rate causes increase in the proportion of aged people in the total

population. Due to decrease in fertility rate the share of younger people in the total population

declines, on the other hand, reduction in mortality rate causes longer life span of people. Total

fertility rate in India was 5.97 in 1950 which decreases to 3.56 in 1990. In 1947, the life

expectancy at birth of Indian people was around 32 years. After that, improvement in medical

facilities, health care facilities and sanitation push the life expectancy at birth to 60.51 for

females and 60.31 for males in 1990. As per the UN definition of population ageing, if 7% of a


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country’s total population is aged (60+) than it can be said that the country is going through the

process of ageing; and by 2000 India have crossed that limit and expected to reach at 12.6% in

2025. India is the second largest country in terms of population ageing. There were 76 million

aged people in 2001 which supposed to increase to 137 million in 2021. The aged people grew

from 5.4% in 1951 to 6.4% in 1981 and 8.1% in 2001. The old age dependency ratio has

increased from 9.8% in 1951 to 11.9% in 1981 and expected to increase to 12.6% in 2001. The

old-child ratio was 14.2:100 in 1971 which will be 24.7:100 in 2001. This demographic change

has implications on physical and mental health, economic activity and social condition of people.

Aged people need intensive social and economic security; but being agriculture based economy,

India is quite unable to give this type of security to targeted people. Though the labors from

organized sectors and govt. employees are in a better position in respect of the question of

security but a real fact is that more than 90% of the total workers in India are engaged in

unorganized sectors. The work participation rate of elderly was 40% in 1991. Near about 60% of

male and 65% of female aged is worked in agricultural sector. As per a survey report by NSS,

almost 60-75% of elderly people in India are economically and socially dependent on their

children. But as development process is going on and with increasing trend of urbanization,

families are now become nuclear which adversely affect the social, economic and health care of

the aged. India Government has already taken various programs and schemes for the well being

of elderly people in India, like, Old Age Pension Scheme, relaxation in income tax for senior

citizens, giving grant-in aid to the NGOs who worked for aged people etc., but still long way

have to go on this way.

Chanana, H. B. and Talwar, P. P. (1987), in the paper “Aging in India: Its Socio-economic and

Health Implications” stated that population ageing can be described in two heads- ageing at the


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base results from decline in fertility and ageing at the apex of the population due to decline in

mortality among the aged people. In India, both the processes are responsible for population

ageing. Population ageing was started from 1950-51 onwards in this country with a sharp decline

in fertility rate followed by sudden decline in mortality rate from 1961 which causes rise in life

expectancy rate; though it became the area of interest after the introduction of urbanization,

industrialization and modernization in India. The absolute number of aged was 24.7 million in

1961 which increased to 42.5 million in 1981, an increase of 72% in this time period and this

trend will continue in future decades also. Aged people are higher in rural areas compare to

urban areas in India and sex ratio is in favor of female aged for the age group of 70 and over.

This factor along with high expectation of life and some social or religious customs raises the

incidence of widowhood among the elderly women. Illiteracy rate was high for aged people in

the former decades though it decreases continuously as the illiteracy rate was 70.8% for males

and 95.7% for females in the year 1961 which decreases to 65.4% and 92.3% respectively for

males and females. Most of the poor illiterate Indian people are engaged in unorganized sector

especially in agricultural sector for whole the life course without any social and economic

security. As a result of this they are unable to save less and can’t fulfill their old age needs. Data

shows that work participation rate of aged people decreases continuously and this decline being

steeper for female aged and in rural areas. Majority of the elderly people are suffering from

chronic disease and physical disabilities at the end of their life. Population ageing will increase

the old age dependency ratio also, and the entire burden of aged people will be imposed on

young working age group or on the Government. Many state governments has introduced old age

pension schemes for giving economic insurance to them but this does not cover the workers from

unorganized sectors. Authors conclude their paper with the statement that aged people can be


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used as human resource for development of the country as they have rich experience and residual

capacities. But, first of all, Government has to ensure their healthy and fruitful lives of elderly so

that they can lead the nation.

Ponnapalli, R., Ponnapalli, K. M., Subbiah, A. (2013), in the paper “Aging and the Demographic

Transition in India and Its States: A Comparative Perspective” give an overall outlook on

population ageing and demographic transition in India and 15 major states of India for the time

period of 1970s to 2101. Here Ponnapalli et.al. use some indicators like ‘total fertility rate’,

‘infant mortality rate’, ‘life expectancy at birth’ and ‘age distribution of population by broad ages

of 0-14, 15-59 and 60+’ and make a time trend analysis with these indicators. According to the

authors, within next 10 years, India will take the first position in respect of population growth

rate. Referring to United Nations Population Division (UN) 2011, they state that the share of

aged persons in India will be increases to 19% in 2050 from 8% in 2010. Both these growth in

general population and aged population are resulted from increase in life expectancy and

decrease in fertility rate. The result of the study reveals that, by the year 2101 India will

complete its 90% demographic transition. In this concern, southern states of India specially

Kerala and Tamil Nadu are in leading position since the period of 1970. The demographic

transition of northern states is much lower even below the Indian level too; though some drastic

changes can happen in near future to these southern states. Since population ageing is an

outcome of demographic transition so it is obvious that the southern states especially Kerala and

Tamil Nadu are already facing the incidence of population ageing compared to other states of

India. Other states of India will experience this incidence in very near future. Rapid increase of

aged people is a serious problem as it has social and economic implications and demands

intensive social services and other related services. Government of India announced National


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Policy for Older Persons in January 1999 to provide and ensure social, medical, financial and

other caring supports for the rapidly growing aged people.

Khan, M. H. (2009) in the paper “Policy Responses to the Emerging Population Ageing in

Bangladesh: A Developing Country’s Experience” states that as per the data of 2008, Bangladesh

is 8th largest populated country in the world with 147.3 million people. The main objective of his

paper is to look at and assess the major policies taken for the welfare of the elderly people in

Bangladesh. There was only 1.94 million elderly people aged 60 and above in 1951 in

Bangladesh which increases to 9.41 million in 2007. As per the author, the total population of the

country has increased 3.23 fold in the period of 1951- 2007 whereas the total number of aged

people has increased 4.85 fold in the same time period. Reduction in birth rate and death rate are

the main causes of population ageing in Bangladesh. Without any considerable socio-economic

development of the country but only successful family planning program and improvement in

health and sanitation system have decline the overall birth rate of the country to 20.9 in 2007

from 51.3 in 1951 and death rate from 29.7 to 6.3 in the same time period. Life expectancy of

the people of this country also increases from 48.1 years in 1961 to 66.6 years in 2007; though it

has been observed that life expectancy of the males are higher than their female counter parts in

this country except the year 1974, though in coming years this trend will be altered for females

which raises the feminization of population ageing. Old age dependency ratio or elderly support

ratio, index of ageing and median age are the three main indices which author has used to view

the trend of population ageing in this country. The elderly support ratio was 8.2 in 1951 which

increases to 11.2 in 2007, ageing of index has increased to 15.90 in 2001 from 10.45 in 1951 and

median age became 20.69 year in 2001 from 15.9 years in 1974. Irrespective of its poor and

underdeveloped socio-economic condition, Bangladesh Government has various policy


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initiatives for the betterment and safety of the elderly people of the country like ‘old Age

Allowance’ (1998), ‘National Policy on Ageing’ (2007) etc. Beside these governmental

initiatives, different non-governmental organizations have also taken multiple policies and

programs for the wellbeing of the aged people of the country. But a real truth is that only a small

share of the total aged people is covered by all these programs. Author conclude his paper by

saying that, being a developing country Bangladesh has resource constraint but it is trying to

assimilate between different activities of various governmental and other organizations for the

sustainable welfare and development of the elderly as well as the country also.

Rao, P. M., in the paper “Economic and Financial Aspects of Ageing in India” has discussed

about the demographic, social and economic aspects of ageing in India and recommend some

policy initiatives for the care of elderly people in India. According to the author, aged people in

India has increased by 287% over the period of 1951 to 2001, it was 19.6 million in 1951 which

increases to 75.93 million in 2001. Though 72% increase in the number of aged people is being

caused by population growth and only 28% is due to actual ageing process of population.

Referring to a report of Ministry of Social Justice and Empowerment, author identifies some

features of elderly people of India like, a large share of aged people are lived in rural areas,

feminization of population ageing as 51% of the aged people would be women by the year 2016,

increase in the number of older old persons (80+), more than 30% of the aged people are below

the poverty line, loneliness and high rate of dependency on others, etc. Aged people have a place

of honor in traditional Indian society but, recently urbanization, modernization and

industrialization have changes the family structure to a great extent which negatively affected the

position of aged in the family as well as in the society also. According to the author, young

working age groups are like the human resource for the country and therefore much attention is


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given on them irrespective of elderly age groups. The effect of ageing is versatile on Indian

economy as less production, more consumption, less supply of labor force and high social

expenditure on retirement. As fertility rate is decreasing continuously, therefore when the present

working force will be retired, there will be less number of workable young people to replace

them. Though, this situation is yet to come for India. It is a challenge for policy makers to design

proper policies for sustainable economic development with available human resource in the age

of rapid demographic transition. Indian Government have launched many programs for aged

peoples but maximum of them are covered only the people retired from organized sectors.

Author conclude by saying that it is necessary to restructuring the policies and social security

system for the well being of aged people as well as socio economic development of the country;

for this he recommended some policies like raising retirement age, giving training on retirement

planning, encouraging different insurance policies etc.

Muenz, R. (2007), in his paper “Aging and Demographic Change in European Societies: Main

Trends and Alternative Policy Options” gives a look on the ongoing demographic change namely

population ageing with special reference to central and western European region. At present

there is a very low level of fertility rate (1.4 children per women in average) and high rate of life

expectancy (70 years for men and 78 years for women in average) in Europe with little bit region

wise variations. According to the author, decrease in fertility rate and increase in life expectancy

rate is the two main reasons of demographic ageing, it indicates decrease in working age

population and increase in old age population. The working age population was 317 million in

2005 in Europe which will decrease to 302 million in 2025 and expected to reach 261 million in

2050 in absence of migration. Though the European population is increasing at a high rate but a

statistics of 2005 represents that 85% of population increase in Europe in that year was from


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international migration. At present Europe is trying to tackle the problem of disparities between

young and old age groups and also in between productive and unproductive persons. In 2005, the

old age dependency ratio was 25 which will increase to 53 in the year 2050. Europe may have

policy options to increase the labor power like increase in female labor force participation rate,

increase in retirement age and proper use of migrant labor and their skill. But the obvious fact is

that European society will gray continuously in coming future.

H.N., Chalise (2006), in the paper entitled “Demographic situation of population ageing in

Nepal” says that Nepal was higher population growth rates once and to reduce this government

has introduced various population control programs which results increase in population ageing

problem here. In the period of 1991-2001, the population growth rate in Nepal was 2.3% whereas

elder population growth rate was 3.39%. As per the census report of 2001, there were 1.5 million

older populations in Nepal which is actually 6.5% of the total population. Here people aged 60

years or older are considered as elder. In 1950s, infant mortality rate was very high in Nepal and

life expectancy rate was only 27 years then. But due to continuous decrease in infant mortality

rate, life expectancy rate reaches to 60 years in the second half of the twentieth century. Ageing

in any country may happen in two mechanisms, ageing at the base and ageing in the apex. Like

other Asian countries, Nepal is also experiencing ageing at the base which results from reduction

in fertility rate along with consequent decline in mortality rate of the elderly people.

Exceptionally, in Nepal, men live longer than female. Recent reaches shows that, as life

expectancy rate increases average household size decreases in Nepal whereas the opposite

picture is true for other Asian countries. Increasing population ageing in Nepal raises different

social, economic and health related problems, but actual support to solve these problems and

help to the aged people is almost nil in this country.


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2.2 REVIEW OF LITERATURE ON ECONOMIC DEVELOPMENT

In the “Development Economics Web Guide” (2003), authorized by Goff, Peter, a set of

indicators have identified to differ between developed and developing countries as per the

Human Development Report (2001) data. The indicators here are divided into three main

categories- economic indicators, demographic indicators, disease indicators. The data presented

here are mainly concentrating on U.K. - a country with ‘high human development’ (ranked14th

as per Human Development Index), Ghana – ‘medium human development’ (ranked 119th) and

Zambia – ‘low human development’ (ranked 143rd). Some of the economic indicators are GDP

per capita, Life Expectancy at Birth, Literacy Rate, and Measures of Poverty. Demographic

indicators are- Annual Population Growth Rate, Urban Population as a Percentage of Total

Population, Percentage of the Population under the Age of 15, Infant Mortality Rate per 1000

Live Births. Disease indicators are- Percentage of Adult Population with HIV/AIDS, Malaria

Cases for per 1000,000 People, Tuberculosis Cases for per 1000,000 people. GDP per capita is

the most important economic indicator of development. It is the total or final value of goods and

services produced within a country divided by the total population. For the year 1999, the per

capita income of Ghana was $1881 and for Zambia, it was $756. The rate of growth of GDP is

also vital. Over the last ten years- the real per capita GDP of U.K. has increased by 2.1% per

year, for Ghana- 1.6% and for Zambia- 2.4%. There are some problems regarding GDP as a

reliable growth indicator. The first problem is to measure GDP in countries where much

economic activities are unofficial, calculating inflation is also problematic- if inflation is

underestimated then GDP will be over estimated. Developing countries’ high level subsistence

farming is another problem for measuring GDP because non marketed output never calculated in

GDP. Various factors may contribute to the differences in life expectancy at birth for different


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countries, such as, the stability of food supplies, the extent to which an area is contested by war

and the incidence of disease etc. The life expectancy at birth of Ghana was 56.6 years in 1999,

for Zambia it was 41 years and 77.7 years for U.K. Data provided by World Bank represents that

life expectancy at birth in developing countries as a whole increased by 20 years over the last 40

years. But this distribution is not even, such as, life expectancy in many sub- Saharan countries is

now falling due to the AIDS endemic. As per the UN Development Report, adult literacy rate is

the percentage of those aged 15 and above who are able to read and write a short, simple

statement on their everyday life. Based on this definition, the literacy rate of Zambia is 77.2%

and Ghana's 70.3%. According to his paper, this definition of literacy is a very narrow definition

and literacy must be determined within a culture rather than across cultures. Another problem

arises relating to the distribution of literacy, because in many countries women are restricted to

get same level of education as men. Poverty can be measured in two ways- absolute poverty and

relative poverty. In a simple word, absolute poverty means inability to fulfill the basic needs for

just enough to survive. Relative poverty deals with the comparison between people or countries

in regard of income and wealth. But it is true that a single indicator cannot present the whole

scenario of development for a country. Such as, Zambia has a higher literacy rate than Ghana,

though Ghana is in much better position than Zambia in terms of GDP per capita. The indicators

of development is also interrelated, like, there exist a strong positive correlation between GDP

per capita and life expectancy, GDP per head and adult literacy is also positively correlated. So it

needs a comprehensive study of all the indicators to set the development level of a country.

Haller, A. P. (2012), in the article, “Concepts of Economic Growth and Development:

Challenges of Crisis and of Knowledge”, draw a difference between economic growth and

economic development. According to the author, economic growth refers to the ascending


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increase in the GDP per capita, GNP and National Income or national economies with a positive

effect on economic-social sector. It is a long run incidence and depends on excessive rise in

population, limited resource and inefficient use of these resources, inadequate infrastructure,

unnecessary governmental interference etc. On the other hand, economic development is a

process that initiates economic and social, quantitative and qualitative changes which causes the

national economy can collectively and robustly increases its real national product; in short,

economic development shows how economic growth can affect the society by increasing the

standard of life. Haller mentioned that, economic growth can be positive, zero or negative. When

the growth of different macroeconomic indicators like growth of GDP is higher than the annual

average growth of population then the overall economic growth will be positive, when the GDP

growth will be equal to population growth, the economic growth will be zero and when GDP

growth will less than the population growth then the economic growth will be negative.

Economic growth and development both shows social progress, in other words improvement of

human beings.

Ramani, S. V. (2008), in the article “Economic Development in India: A Personal View”

explores the economic philosophy on development, with respect to Indian economy. Then he

discusses about the indicators used to measure the development, India’s economic philosophy

and where India is today with respect to the Millennium Development Goals. The concept of

‘economic development’ primarily grow for the European context, Adam Smith, the author of

‘The Wealth of Nations’ (1776) is called the father of modern economic philosophy. Though for

Indian context, Chanakya (350- 283 BC), the author of Arthashastra, first laid down the

principles of income generation, mode of governance and sustainable development which today

converted into the subject of ‘development economics’. According to Smith, ‘invisible hand’ of


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the market guided the development activities of a country. Raman evaluated development into

four phases. In phase 1 (1945-1965) debate has been arises on what comprise development and

how it should be supported. There are mainly two schools of thoughts- the neo-classical school

and the structural school. The neo- classical school has a thought that any policy that increased

national income or more specifically per capita national income would automatically generate a

process that pushed the country on the way of growth and development. They focused on mainly

‘revenue generation’ either as gross national income or per capita income. According to the

second school of thought ‘the capacity to generate revenue’ is the prime indicator of

development. In any economy, the capacity to generate revenue is determined by some socio-

economic indicators like literacy rate, life expectancy and mortality rate. Therefore the focus has

to give on a large set of indicators. In phase 2 (1965- 1980) a strong debate is going on

discussing the merits of different approaches and also on the degree and nature of government

intervention. India, like many other countries, largely accepted the structural approach and

selected strong state involvement in the allocation of resources. In phase 3 debates shifted to

which variables impact national income in the short run and the capacity to increase national

income in the medium run and how it occurs. Phase 4(1995- today) is marked for the slow

consensus on strategic foundations of development process. Author identified a set of indicators

of development, such as, income, population, per capita income, value generated by different

industrial sectors, employment in different industrial sectors, consumption, poverty, mortality

rates, literacy rates etc. The UNDP proposed 8 essential objectives, referred as the Millennium

Development Goals (MDG) to be attained by 2015, in the first UN Millennium Summit in

September 2000. The goals are- eradication of extreme poverty and hunger; universal primary

education, gender equality and empowerment of women; reduction of child mortality,


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improvement of maternal health, combat of HIV/AIDS, malaria and other diseases,

environmental sustainability and a global partnership for development. The process of

development in India was started since 1947, when India attained independence. After that, it

took a top gear in the decade of 1990, after introducing liberalization, privatization, and

globalization in India. Now Indian government has introduced various policy frame works to

attain MDGs in targeted time period and referring to Bajpai and Goyal (Bajpai, N. and Goyal, S.

(January, 2004), “India: Towards the millennium development goals”, CGSD working paper No.

3, The Earth Institute at Columbia University) and Bajpai, Sachs, Volavka (Bajpai, N., Sachs, J.

D. and Volavka, N. (April, 2005), “India’s challenges to meet the millennium development

goals”, CGSD working paper No. 24, The Earth Institute at Columbia University) Raman argued

that India is on the way of poverty reduction, providing access to portable water both for urban

and rural and urban sanitation.

Papanek, G. (2002), in the article “Economic Growth Versus Economic Development” discusses

the role of innovations and legal security in economic growth and development. With the help of

data from case studies, enterprise surveys, a simple regression model and a complicated macro

model on the basis of Hungarian economy author shows that a stable legal framework and

innovation friendly policies can have a substantial positive impact on Hungarian economic

development and growth. Most of the theories of 20th century do not make any significant

difference between growths, i.e. increase of the GDP and development. But, referring to

Thirlwall (Thirlwall, A. P. (1999), “Growth and Development”, Medicillan), author says that

development concerned the quantitative view with qualitative requirements of progress and

national enrichment sustainable for a longer period. The factors of development are rapidly

changes day by day. Now days, technological progress along with proper knowledge becomes


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the key driving force of development. Hungarian economic policy was significantly reserves of

economic development in the beginning of the 21st century. Author concluded that if well-

targeted government actions are implemented with new innovations and proper legal security

then Hungarian economic growth can add 1.5-1% annually.

Lal, A. K. and Clement, R. W. (2005) in their paper “Economic Development in India: The Role

of Individual Enterprises (And Entrepreneurial Spirit)”, say that, Indian economy shows an

instructive contrast between how individuals react under a government control environment and

market based environment. Though economic development through productivity growth is very

important for both developed and developing countries, but growth is depend on appropriate

strategy relating government policies and national views. In their paper, the authors demonstrate

that, recent economic reforms along with active role of individual enterprise can accelerate the

economic growth of India. Lal and Clement discusses here the strategy of economic development

and the overall economic environment that has prevailed in India since its independence from the

United Kingdom, the consequences of regulated economic development in India, with particular

emphasis on the implications of the microeconomic aspects of India’s approach to its economic

environment, the results of India’s economic reforms since the country’s economic crisis of

1990, and highlights the role that individual enterprise has played and can continue to play in

that country’s economic affluences and the special role that entrepreneurship can play in India’s

efforts at economic growth. As rapidly growing population and growing unemployment are two

of the main obstacles of the economic growth of India, entrepreneurial can provide new jobs to

the growing jobseekers. Authors conclude that India can generate additional economic growth by

nurturing entrepreneurial activities within its borders, particularly within its burgeoning middle

class. To encourage entrepreneurial efforts more in economic growth, Indian government can


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initiate the opportunities like- education directed specifically at developing entrepreneurial skills,

financing of entrepreneurial efforts, and networking among potential entrepreneurs and their

experienced counterparts.

Cali, M. (2009), in his empirical work “Urbanization, Inequality and Economic Growth:

Evidence from Indian States” explores different possible inferences of the urbanization process

on development outcomes. He uses Indian states, mainly 16 major states including Jammu and

Kashmir as the units of study; and he studies the searching issues in an intra-country rather than

in a traditional cross-country setting considering the situation of Indian states over the post-

independence period and Indian towns over the 21st century. Author uses India as his research

ground because it is a federal country with high degree of state wise variability in policy

variables, the size of the major states is similar in terms of both population and geographical

extension to that of medium-large countries, Indian states have the vast size and population along

with their differences in terms of languages, culture and social norms which have limited the

mobility of labor across states, and Indian urbanization experienced an important growth over the

Post-Independence period. The urbanization rate of India was 17% in 1950 which increases to

27.7% in 2000. Cali’s empirical analysis concentrates on three main issues- the evolution of

rural-urban disparities and its relation with income, the relation between the speed of

urbanization and income growth and the evolution of urban concentration. Using the panel data

modeling method and state-level regression analysis, author finds out that 10% increase in real

per capita GDP is associated with a reduction of 0.5% points in rural-urban difference in the

headcount index. Rural-urban inequality increases in the speed of income growth, although the

coefficient is significant only at the 10% level. The share of population in working age in urban

areas is positively associated with rural-urban difference. In case of population over 60, the


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female- male ratio in rural areas has a negative effect on the rural-urban difference. The total

population tends to be negatively associated with GDP growth for a given urban population

indicates that there exists a positive relationship between the level of urbanization and growth.

Author calculated that the relation between urbanization and income per capita is not a strong

one when we consider it within an individual state over time. This relation is much stronger

across states. City size has a significant negative influence on rate of growth. In other words it

can be say that as a town grows in size its rate of growth slows down relative to the growth rate

experienced when the size of town was smaller. The rural-urban migration has an impact on

urbanization rate, as moved to urban areas from rural areas accelerate urbanization.

Haller, Alina-Petronela (2012), in the article, “Concepts of Economic Growth and Development:

Challenges of Crisis and of Knowledge”, draw a difference between economic growth and

economic development. According to the author, economic growth refers to the ascending

increase in the GDP per capita, GNP and National Income or national economies with a positive

effect on economic-social sector. On the other hand, economic development is a process that

initiates economic and social, quantitative and qualitative changes which causes the national

economy can collectively and robustly increases its real national product; in short, economic

development shows how economic growth can affect the society by increasing the standard of

life.

2.3 REVIEW OF LITERATURE ON CONNECTION BETWEEN POPULATION

AGEING AND ECONOMIC DEVELOPMENT

Bloom, D. E., Canning, D., Fink, G. (2008), in their working paper “Population Aging and

Economic Growth” explores the effect of population ageing on economic growth. On the basis of


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United Nations’ world’s population projection based on fertility rate assumption and different

population census data, authors claimed that the number of people aged 60 or over of the whole

world is expected to reach 1 billion by 2020 from 200 million in 1950 and approximately 2

billion by 2050 which will be 22% of the world’s population. The number of individuals aged 80

or over has risen from 14 million in 1950 to 90 million today and projected to rise 400 million by

2050, i.e. 1% to 4% of the global population by 2050. These increases vary for developed and

developing countries as developing countries experienced a faster rate of ageing than developed

countries. 20% of the population of developed countries is over the age of 60 today and expected

to rise to 30% by 2050, whereas in the developing world less than 10% of the population is over

the age of 60 and will be more than double in the next four decades. Population ageing is related

with change in the sex composition of the population. Male babies are born more, but the death

rate of male babies and of adult men are higher than that of their female counterparts results a

large share of women among the elderly. There are three main factors behind the change of

global aged population- (i) declining fertility rates in recent years, (ii) recent increase in life

expectancy, (iii) past variations in birth rates and death rates. The total fertility rate fell from

approximately 5 children per women in 1950 to just over 2.5 in 2005 and expected to fall to 2

children per women in 2050 consequential reduction in the number of young people and raised

the share of the elderly. According to UN Population Division, global life expectancy has

increased from 47 years in 1950 to over 65 today and projected to reach 75 years by 2045.

Variation in birth rate and death rate occurred in rich countries after World War II due to

increase in fertility. The authors mentioned the case of East Asia in the second half of the 20th

century where rapid decline in infant and child mortality began in the late 1940s which

influenced fertility rate negatively as crude birth rate dropped from 40 births per 1000 population


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in 1950 to near about 20 births within 1980. This lag between mortality and fertility creates a

baby boom generation. These boomers are now entering in the age of 60 making ageing

population. In the developing countries, as health structure gradually improved, child mortality

reduced fertility as well as population ageing also increases. According to the authors, population

ageing effects the growth in two main channels, viz., labor supply and capital accumulations

through which economic growth can occurs. Aged individuals tend to work less due to

mandatory retirement age limit and save less, therefore labor supply, saving per capita and hence

income growth would tend to decline with a rising elder share of the population. This further

slowdowns the economic growth rate of any country. Aged needs more intensive health care,

therefore it put stress on the working age group whose taxes pay for the meeting the needs of the

elders, like, health care and pension, and politically it becomes more difficult to implement such

policies of cutting health and pension benefits. Population ageing will emerge as a great

challenge for society, economy and politics for both developed and developing countries. Early

policy actions can pose the countries at a better position to deal with this challenge. Some

structural behavior change, such as increase the retirement age limit, pension funding methods,

and investment in health care of the elderly can reduce the negative effect of ageing. Migration

can also ease the negative effect of population ageing, as countries with higher ageing can hire

labor from the countries that have low ageing rate to compensate their labor shortage creating for

the retirement of their own people, this can slow down the ageing process of the countries with

faster ageing.

Kuehnel, J. (2010), in his research paper “Population Ageing, the Composition of Government

Spending, and Economic Growth” studies how population ageing endogenously changes the

composition of government spending and economic growth. According to him population ageing


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is shift in the distribution of countries population towards older ages, and this demographic shift

affects the old- age support ratio through the change in the relative size of the self-supporting,

i.e., working population compared to the economically dependent old persons. The old-age

dependency ratio in Europe is projected to decline from 81% in 2005 to 68% in 2050. To

determine the relationship between population ageing and government spending, author

integrates heterogeneity and a demographic structure into an infinitely lived agent endogenous

growth model by assuming that households differ in their composition between working young

and retired old. The households determine the public policy mix between productive expenditure

and spending by majority voting that satisfies the elder’s preferences. He assumes that, each

household includes working young and economically dependent elderly members. Each

household’s age composition is captured by the ratio of working members to total household

members, i.e., support ratio. Here, population ageing implies to a shift in the distribution of

households such way that there are more households with a small support ratio. By applying

endogenous growth model Kuehnel get the result that, population ageing is predicted to increase

public spending benefiting the old and to lower the economy’s growth rate, but it does not affect

public productive expenditure. Though all households prefer the same share of output to be used

for productive public expenditure, the age pattern of each household determines how much they

want the government to spend on the needs of the old. On the other hand the policy mix depends

on the age distribution of the economy, but the actual policy choice is time consistent and does

not necessarily maximizing the economy’s growth rate.

In a paper entitled “Population Ageing, Labour Market Reform and Economic Growth in China

– A Dynamic General Equilibrium Analysis” (2008), Peng, X. and Mai, Y. have a view that

more efficient allocation of labor between sectors may counter balance the negative effect of


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population ageing in the context of China’s economic growth. Due to rapid socioeconomic

development and rigid family planning policy from early 1970s China has completed its

demographic transition from high fertility, low mortality and low population growth rate to low

fertility, low mortality and low population growth rate at approximately 30 years back. The

proportion of people aged 15–64 has increased from 56% in 1970 to 70.6% in 2005, aged 0–14

years declined from 39.7% to 21.8% in the same time. Elderly aged 65 and over increased from

4.3% to 7.5%. Gradual fertility decline has brought a significant demographic dividend for

China, i.e., a population age structure consists of high proportion of working age population and

low total dependency ratio. This demographic dividend along with ongoing economic boom

accelerates China’s economic growth more rapid and dynamic. But because of rapid fertility

decline, the proportion of people aged 65 and above will increase from 7.5% in 2005 to 11.9% in

2020 and further 16.3% in 2030. The working age people will decline by about 1.5% per annum

since 1990. All these events will turn the demographic dividend to a demographic deficit with

various negative consequences on economy. Referring to Peng (Peng, X. J. (2006),

“Macroeconomic Consequences of Population Ageing in China – A Computable General

Equilibrium Analysis”, Journal of Population Research, Vol. 30 (4), pp. 12 – 22) authors say that

present low fertility rate and population ageing of China will slow down its economic growth by

2% per annum during the 2020s and by 3% per annum during 2040s. She suggests that if the

total fertility rate can increase to 1.8 or to the replacement level of 2.1 then labor supply will

expand, but it may decrease the per capita income of the economy. So increase in fertility is not a

better solution. Due to economic reform since 1978, huge number of rural labors has migrated to

other productive sectors. But for household registration (hukou) system and different regulation

and policies are exists in China, it creates an imbalance in labor mobility in between different


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sectors in China. Hukou system plays a major role in supporting wage difference between

agricultural and non agricultural sectors and creates income inequality between rural and urban

areas. Authors applied a dynamic model of Computable General Equilibrium (CGE) of the

Chinese economy, the MC – HUGE model to find out the economic impact of reducing labor

market distortions against the situation of population ageing and decreasing labor supply growth

in China over the period of 2008 to 2020. The concluding result of this analysis is that, reform of

‘hukou’ system and or of labor market could alleviate the depressing effect of diminishing labor

supply by 0.45% points annually. This will help to increase agricultural – non-agricultural labor

movement, increase the living standard of the labors, brings income equality and provide

employment opportunities, wage payments, public services and social security protections to the

rural labors like as urban one. Authors suggest Chinese government to take appropriate actions

and implement accurate policies to reform ‘hukou’ system and also labor market.

Gomez, P. and Cos, P. H. D. (2008), in “Does Population Ageing Promote Faster Economic

Growth?” try to estimate the effect of the process of population ageing on economic output. They

mentioned population ageing as a by-product of economic development, and define this

demographic change in two ways- first, a growing cohort of working age persons (15 – 64) as a

share of the total population; second, an increase in the number of prime age persons (35 – 54)

relative to the younger working age population (15 – 34). Projections shows that many

developed economies are experiencing rapid population ageing and population decline from the

very first decade of the current century. Falling birth rate not only causes population ageing but

also change the structure of working age population of a country. Labor force participation and

productivity grow faster and reaches to its peak during the prime working ages of 35 and 54. At

this situation, the balance between general and experimental human capital become maximum.


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Therefore the productive capacity of an economy with a large fraction of prime age persons is

higher from an economy having more younger and older labor force participation, though both

have same size of workforce. Authors use a large cross-country panel spanning the past four

decades to estimate both the direct and indirect effects of demographic ageing. They prove that, a

positive relationship exist between the ratio of working age persons (aged 15 – 64) and level of

per capita GDP. The ratio of prime age persons (aged 35 – 54) to the younger working age

population (15 – 34) should reveal positive but diminishing returns with respect to per capita

GDP. Gomez and Cos calculate that for most of the countries, when there are approximately

0.950 workers aged 35 – 54 for every single worker aged 15 – 34 then per capita output growth

will be maximum, below or above this ratio, output growth will be lower. Standard life cycle

model of consumption suggest that individual tries to smoothen consumption over the course of

their lives. Therefore they borrow when they are young and save when they are economically

active, and save more at the prime working age. Therefore it can be said that, demographic

transition has a positive impact on aggregate savings and so on capital accumulation. Hence the

growth of the working age population should have a positive effect on output per capita. The

overall result of this paper suggest that the process of population ageing produces intermediary

changes to population age structure that actually increase economic performance rather than

diminish it.

Birchenall, J. A. (2007), in the paper “Economic Development and the Escape from High

Mortality” examines the relationship between high mortality and economic development

represented by income per capita. The main two objectives of this paper is to study the basic

facts behind the mortality change as recorded from the historical experience of Northwestern

Europe and from the current experience of less developed countries, and also to measure the


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contribution of economic development represented by income per capita to the mortality decline

in the second half of the 20th century. For this, the author uses different information available

from the World Health Organization Statistical Information System (WHOSIS) and applies

various measuring systems like OLS estimation, instrumental variable (I V) estimation, and

dynamic structure of the model using dynamic panel estimators and discusses the advantages and

constraints of all the estimation methods. According to the author, improvements in economic

conditions, sufficient food availability and modern innovations in medical science since the 18th

century are the fundamental factors behind the primary reduction in the mortality rates in

developed countries and in the consequent decline of death rates in less developed countries.

Empirical evidence confirms the reality that chronic malnutrition and easy attack of various

infectious diseases caused for this is the main reason of high mortality in pre modern economies.

Measures taken to improve public health system through sanitation and lowers the degree of

infectious diseases played an vital role in the acceleration of the mortality decline of developed

countries since the last quarter of the 19th century and in the escape from high mortality in the

less developed countries in 20th century, but these efforts mainly benefited urban population at

first. According to Birchenall, the facts and features of escape from high mortality are different

for developed and developing countries. Referring to Preston (S. Preston, 1985, “Mortality and

development revisited”, Population Bulletin of the United Nations, 18, 34-40) Birchenall says

that aggregate income gain were the dominating factor in explaining mortality decline in

developed countries during 1960s-70s. During the 17th and 18th centuries, mortality started to

decline in Europe and income and population started to increase which contradicts Malthusian

hypothesis presenting income and population are negatively related. As mortality declines, life

expectancy at birth increases and it is a fact that last three centuries have seen a remarkable


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decrease in human mortality along with roughly double increase in average life expectancy at

birth rate. The relationship between higher per capita income and higher life expectancy in

Northwestern Europe and North America can better understand by the process of structural

transformation process, where technological change in agricultural sector reduces labor

requirement for food production and therefore more labor can engage in other productive

activities. This leads to agriculture sustains economic growth, and as agricultural productivity

increases nutrition level also improves, reduces vulnerability to infectious diseases along with

increase in life expectancy and population growth. There exists a clear difference between

developed and developing countries in respect of starting time and extent of mortality decline

though the features of both the countries are more or less same. Another important difference

between developed and developing countries is that the later faces the mortality decline faster

than the former, and here mortality is less dependent on income growth. Referring the views of

different experts, Birchenall argues that, economic growth in terms of income per capita is the

dominating factor in explaining the mortality decline. The results of OLS estimation represents

that income has a negative and significant influence on the youngest age groups of the

population, who are responsible for most of the decline in mortality in the world. It has the same

influence on the diseases caused for malnutrition, whereas diseases other than sensitive to

malnutrition exhibit zero correlation with income per capita. Income has a strong negative effect

on infant and child mortality rates. For robustness check and to infer additional patterns of

mortality, the author uses the urbanization rate collected from the World Development Indicators

World Bank (2000) as a determinant of age specific death rates. He considers urbanization as an

endogenous variable and instrumented through the structure of residuals. According to

Birchenall, urbanization is the positive outcome of economic development, and therefore, the


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effect of income on mortality may be the simple reflection of the benefits of urbanization on

mortality. Urbanization rate is negatively related with death rates, i.e. higher urbanization rate

lowers the death rates and is positively correlated with infant mortality rate. But all the effects of

economic development cannot be endorsed by urbanization, as the sign of the coefficient is still

negative. The author introduces investment rate as an instrument for income in equations (i) and

(ii), from the Penn World Table, to estimate annual change in mortality. The results of these

equations confirms the importance of income growth for the mortality decline and shows that per

capita income growth decreases 30% mortality caused for infectious diseases and 40% mortality

caused for malnutrition.

Preston, S. H. (1975), in his research paper “The Changing Relation between Mortality and

Level of Economic Development”, estimates the relative contribution of economic factors to

increase in life expectancy during three different decades of the twentieth century in Western and

non- Western areas. The data consists of cross- sectional relationships between national life

expectancies and national income per head assessed here. These relationships are further

reexamined on the basis of some economic- demographic models to establish the relationship

between mortality and economic development. Author mentioned two reasons for choosing

national income as development indicator rather than other socio economic variables. (i)

National income is almost certainly the best single indicator which influenced mortality since it

takes into account the value of all final products produced in a country in a certain period and

most of the products deal with the incidence of mortality. (ii) National income per head is

considered as a leading index of economic development and so many economists used it in their

growth models from which policy measures are derived. According to Preston, levels of

mortality and economic development related to one another in different of ways, among which


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three are widely discussed. They are- (i) Level of income influences level of mortality at a

moment in time, (ii) Level of income influences rate of change in mortality, (iii) Rate of change

of income influences rate of change of mortality. By establishing a cross sectional relationship

between income and mortality Preston argued that there is a confirm relationship exist between

income and mortality rate. The mortality income relationship is non linear because of

diminishing returns to increase in income condition. Higher absolute and percentage growth in

incomes contributed to a larger increase in life expectancy. Mortality has not become

progressively dissociated from standards of living at a moment in time. A certain increment in

income in low income countries tends to cause a larger gain in life expectancy in the 1960s than

1930s. There are two interpretations behind such kind of change. The first one is, new health

measures may have advanced that are vulnerable only by countries in which lowest level of

income are past. The second interpretation is that, in the post war period the international health

programs have focused their efforts on underdeveloped countries which results a greatest

reduction in the mortality. Factors exogenous to a nation’s level of income per head had a major

effect on mortality trends in more developed as well as in less developed countries. Mortality

decline in more developed regions was closely related to standard of living and therefore

preceded slowly, whereas in less developed regions it was a result of the introduction of medical

techniques, improvement in sanitation, health and education. This assertion holds good under

certain points of conditions, but it can be surely said that economic development is not only the

major factor of increase in life expectancy.

According to Treas, J. and Logue, B. (Dec. 1986), in “Economic Development and the Older

Population”, ageing population is the result of economic development as well as it may also

influence the course of development. The authors termed economic development as ‘social and


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economic modernization’ and defined it as ‘transformation in economic, social and political

organization and in human personality observed in a growing number of nations since the mid-

eighteenth century’. On the basis of that, there is a wide variation in change in age structure in

developed and less developed countries. As per the estimation of United Nations at 1985 more

than 55% of persons aged 60 years and older live in the less developed countries of the world. In

the remaining years the statistics will be more than double compare to more developed countries.

In 1985, 6.3% of the total population in the less developed regions of the world was aged 60 and

older. By 2020, the figure is expected to increase to 10.6%. There are vast disparities in the

relative size of the elderly population and also their absolute number and rates of growth,

especially in the countries undergoing fertility declines, not only the size of older population but

also their relative share in the total population is growing fast. In South Asia, Africa and Latin

America experienced slight increase in the percentage of aged population due to slow decline in

fertility. As per the United Nations’ report 1985, Asia alone contains 49% of the world’s elderly

at the end of the 20th century. By 2025, 17 countries of the world including China, India, Mexico,

Turkey, Indonesia and Pakistan will have at least 1 billion persons aged 80 and above. China

alone will have 24 million people of this age group. The older age group is dominated by

women; there are 78 men for every 100 women in the age group of 75 and older at this time. As

the number of elderly person increases, the dependency burden also rises. At the year of 1985,

there were 8.7 persons aged 65 and older for every 100 persons aged 15-64 in East Asia, this

ratio is expected to increase to 16.4 by 2020. Ageing is inseparably linked with fertility change.

In the World Population Plan of Actions adopted in Mexico City in 1984, there was a declaration

that the countries with high fertility levels have large absolute and relative number of children

and youth which is a continuing burden for social and economic development, including


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educational development. While for developed countries and for the developing countries that

experienced fertility decline in the recent past, increase in the aged population is imposing an

economic burden with respect to national expenditure for social security and social services. The

authors identify four perspectives which can influence development policies and programs in

developing countries, such as- (i) The aged as a low priority, (ii) The aged as an impediment, (iii)

The aged as a resource, (iv) The aged as victims. Referring to Cowgill (Cowgill, Donald O.

(1974), “Ageing and modernization: A revision of the theory”, in Late Life, ed. Jay Gbrium.

Springfield, III: Charles C. Thomas, pp. 123-146), Judith and Barbara identify four integrated

facets of modernization that demoralize the social standing of older persons- (a) Modern health

technology leads to an increase in life expectancy of people and so ageing of the population,

which further rise to greater intergenerational competition for job. (b) New economic

technologies make the jobs of the aged outmoded. Coupled with the eager competition promoted

by demographic shifts in the age structure, this obsolescence leads to the institutionalization of

retirement practices and ultimately to economic dependence of the old. (c) An urbanization yield

from economic development promotes both social and geographic mobility of specially youths

resulting in the social isolation of the aged from younger generations. (d) The rise of mass

education for children leaves the elderly rationally segregated from the mainstream. According

to the authors, the above mentioned four perspectives coexist, overlap and sometimes conflict in

the less developed countries of the world. This results a U-shaped relationship of the status of the

aged to modernization, rather than a monotonic decline.

In an article entitled “Economic consequences of population ageing”, published in ‘World

Economics and Social Survey’ (2007), it is mentioned that, ageing problem has significant

inferences on economic growth and the participation of older persons in society through


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affecting the size and composition of the labor force. Most of the developed and also the

developing countries, now a day, are facing the event of declining fertility. This decreases the

labor supply and dependent people in the economy. This further results lower output growth in

one hand, and on the other hand, older workers have to undertake the production process to

maintain fixed level of output. This may affect the overall production efficiency of the economy.

Population ageing can affect economic growth through affecting the economic growth factors

like, consumption, investment and saving. The consumption demand for health, long term care,

housing and energy expenditures increases among the older people compare to the younger

people. The other side of consumption – ageing relationship is that, person’s income is positively

related with his income, and as income in the old age declines so consumption also declines

simultaneously. The capacity of saving also diminish with age and large share of the saving goes

to the pension fund for better security in the old age; this further diminishes investment level in

the economy. Various measures can take to mitigate the problem of labor force decline and its

negative implications, like migration, outsourcing, increase in fertility, encouraging labor force

participation both by women and older workers etc. Labor migration from labor surplus economy

to the ageing countries is one way to meet the shortfalls in labor demand. But data reveals that,

ageing countries need huge migrants to offset the labor supply because of declining fertility. In

every region of the country, the female labor participation is lower than their male counterpart.

Data from developed countries shows that there exist a trade-off between work participation and

having children. Increased female labor force implies decrease in fertility rate and delayed

childbearing in these countries. So policies have to make in the direction such that women can

bear child simultaneously maintaining their career. Older people participate less in work force. It

has several reasons, like, poor working conditions, ill health, low job satisfaction, cultural norms


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and discrimination against older workers, inappropriate pension system etc. Steps should be

taken to mitigate these negative reasons and encourage employers to hire older workers. Ageing

and GDP per capita is inversely related to each other. As labor force growing old the labor

productivity gradually declines. The improvement in labor productivity can compensate the

impact of population ageing on economic growth. In case of Japan, assuming all other things

remain constant, it needs to grow labor productivity annually 2.6% to maintain per capita income

growth at 2% per year during the next 50 years, and more than 80% growth in labor productivity

to conquer the impact of population ageing. Investment in terms of physical capita, research and

development, human capita etc. can increase the productivity growth.

Tosun, M. S. (2003), in the paper “Population aging and economic growth: political economy

and open economy effects” the role of both open economy and endogenous fiscal policy

response in the growth effects of population ageing; and also discusses how this framework is

different from closed economy and other open economy models. According to the author,

population ageing is one of the most significant demographic phenomenon happened mostly in

industrialized countries. Population ageing in one region of the world may lead to capital flows

by altering saving and consumption behavior. With the help of the basic Diamond overlapping

generations model Tosun identifies both political economy and open economy effects of

population ageing. International capital mobility works like a shock absorber through spreading

the growth effects of ageing globally. Side by side, endogenous fiscal policy impels countries

apart in their transitions by creating asymmetries between their fiscal policies. These two

features together changes the pattern of the effects of population ageing on growth compare to

closed economy and exogenous fiscal policy models.


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In the paper “Population Ageing and Economic Growth in Seven OECD Countries” (1998-

2003), Fougere, M. and Merette, M. examine the impact of population ageing on economic

growth of seven OECD countries by the help of computable overlapping- generation (OLG)

models. According to the authors OECD countries will experience rapid increase in aged

population over the next several decades and as the baby-boom generation retires in that period,

this causes significant macroeconomic effects and creates difficult fiscal policy challenges.

Ageing can affected the economic growth of an economy depending on the adjustments of factor

inputs and on government policy responses. Increase in the life expectancy and decrease in the

fertility rate are the two main factors behind the phenomenon of population ageing. Recent

demographic projection explores that the proportion of elderly will be double in over the next 50

years. Among the seven countries, Italy and Japan will experience the largest increase in the rise

in proportion of old age people with a high rate of old-age dependency ratio rising by 190% and

170% respectively in between 1996 to 2050. Whereas, Sweden will experience least ageing with

50% rise in old age dependency ratio in the above mentioned period; Canada, France, the US,

and the UK will have middle rate of ageing.

Rapid rate of population ageing is a big concern in China. Peng, X. in his paper “Population

Ageing, Human Capital Accumulation and Economic Growth in China” (2005), tries to find out

the macroeconomic impact of escalation of human capital during the first half of the 21st century

with regards to rapid population ageing in China. He studied whether the declining total

dependency ratio during the period 2000 to 2030 can be exploited for energetic human capital

formation as well as the productivity improvements derived by increases in the human capital

stock by increasing public expenditure on education for a given ageing profile can mitigate the

adverse effects of the shrinking labor force and lay a foundation for supporting the rising


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proportion of the elderly. Peng uses computable general equilibrium (CGE) model in his paper

and his analysis is based on the ageing profile associated with the medium variant population

projection conducted by the United Nations (2004). The outcomes of this study shows that rapid

human capital accumulation can eases the adverse effects of population ageing by elevating not

only the growth rate of total output but also the growth in households’ living standards.

Bloom, E. David, Canning, D. and Finlay, Jocelyn E. (2009), in their working paper “Population

Aging and Economic Growth in Asia” state that the economic consequences of population

ageing depend on behavioral responses of the shift in age structure from youth aged to old aged

population. According to the authors decline in fertility, increase in life expectancy rate and

change in age structure of cohort sizes are the main reasons of population ageing in Asia. From

1960 to 2005 Japan experienced the highest life expectancy rate in the world with 78.7 for men

and 85.6 for women, whereas China has the prevalent absolute increase in life expectancy in the

world. Decrease in total fertility rate from 6.05 in 1960 to 2.63 in 2005 results raise in working

age share in many Asian countries primarily but further decline in fertility rate from the

replacement rate causes decrease in working age group and increase in old age shares in

population age structure, for which labor supply, savings and income per capita of a society as a

whole have declined. Authors viewed that variation in fertility rate at a point of time has an

effect on the share rather than the size of aged population in the age structure of that point of

time. They also thought that rapid decrease in fertility and mortality rates in past yields high

population ageing in Asian countries in 1960 to 2005 which will be not of the same trend

towards ageing in future because of decrease in intensity of population ageing factors like

fertility and mortality rates. Using regression analysis method they tried to find out the effect of

population ageing on economic growth for Asian countries, and reached to the conclusion that


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population ageing has some depressing effect in short run but has no effect on economic growth

in the long run because different behavioral effects of demographic changes compensated the

negative effect of population ageing in the long run.

Bloom, D. E. and Canning, D. (2011), in their working paper entitled “Demographics and

Development Policy” states that there is more than 7 billion people in the world in 2011 which is

supposed to be 9 billion within the year 2050; and this population growth is the outcome of

another widespread global occurrence known as demographic transition. Conversion from high

fertility and mortality rate to low fertility and mortality rate is the main reason of this

demographic transition. According to the authors, the incidence of declining death rates first

before birth rates causes population grow and decline in death rates rapidly for infants and

children results ascend in baby boom. Authors describe baby boom as an incident where more

babies are survived and matured into children and adults. At the first stage, baby boom

generation lowers the level of economic growth of a country because the major share of the

countries resources are used for caring and education of the children. But when this generation

reaches to their working age then the per capita productivity and savings has increased results a

rapid growth of the economy of that country. This is called demographic dividend. The incidence

of baby boom ends with the progress of economic development. So it can be said that population

growth and age structure are the important drivers of economic growth. But economic growth

does not involuntarily hastened with demographic transition, it needs proper governmental

policies. Such as, China have made policies to decrease its population growth rate since 1970s

which results low rate of fertility with 1.8 children per women and highest 2.6 working age

people per dependent today. This leads to a rapidly ageing society and China already confined

the demographic dividend. On the other hand, India give emphasis on the lowering fertility rate


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much latter than China which directed a less decline in fertility 2.7 children per women today.

Therefore India can capture its demographic dividend by and around 2035.

Guo, X. and Marinova, D. (2007), in their article “Economic Development, Population Ageing

and Sustainability in China” discusses about the economic development, demography and

environmental situation of China. Chinese economy is a fast growing economy too which is

growing at an average rate of 10% per annum since 1978. The Gross Domestic Product of China

increases from 362 billion Yuan in 1978 to 14 trillion in 2004; and the per capita income

increases from 379 Yuan to 10,502 Yuan in the same time period. Though the population growth

rate of China was only 0.6% at 2007, but still it is the most populous country in the world. From

1949 to the middle of the 1950s, the birth rate in China was very high which causes a population

bloom at that time. But great famine in 1958 increased the mortality rate from 11.9 per thousand

to highest most rates of 25.4 per thousand in 1960. After that Chinese government introduced the

one-child policy which decreases the fertility rate of the country as well as population growth

rate also. In 2007, the crude birth rate of China was 13 per thousand, the death rate was 7 per

thousand and the general life expectancy was 73 years. Low rate of fertility and mortality and

also high life expectancy rate results rapid population ageing of that country. Except the problem

of population ageing China is also passing through the problem of country’s natural

environmental corrosion like land degradation, water and air pollution etc. These environmental

problems make challenges for the economic growth and food self-sufficiency of the country.

According to the authors, China’s unparalleled economic growth is mainly resource intensive

and export oriented which is not so helpful for the fast growing aged people of the country

because aged people need sound and clean environment for their healthy life. China requires a

balanced sustainable development policy to face the environmental problems keeping in mind


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the fact that its population is ageing rapidly; that means the number of young and working age

people is decreases hastily. In 2007 Chinese government implemented the National Climate

Change Program. The main aims of this program is the restructuring the country’s economy,

promoting technology advancement and improving energy efficiency.

Banister, J., Bloom, David E. and Rosenberg, L. (2010) in their working paper entitled

“Population Aging and Economic Growth in China” have said that the global aged population

has shown an increasing trend. The share of aged people in the world has increased from 8% in

1950 to 22% in 2050. Increasing share of old age people in any region means extra burden on

small working people because aged people does not able to produce and save much like working

age groups but needs extra medical care than others, it slows down the economic growth rate of

that region. Referring to the various papers and reports of OECD and Canadian Government,

authors mentioned that population ageing may have negative effect on economic growth of any

country. In this context they tried to find out the effects of population ageing on economic

growth in respect of China. China’s population has increased from 0.5 billion in 1950 to 1.35

billion in 2010 and expected to reach to approximately 1.5 billion in 2030; total fertility rate has

decreased from 6 children per women in 1950-1955 to below 2 by 1995, life expectancy rate

increased from 40 years in 1950 to near about 73 years in 2010 and predicted to reach to 80 years

by 2050. All these factors lead to the obvious result of increase of 60+ age group people in the

total population. An estimate said that, by 2050, there will be 440 million aged people (60+) in

China. Till now, China is maintaining its high rate of economic growth with a positive ratio of

working age groups to the non working age groups, but in coming years, as the working age

groups entered into the old cohort, the economic growth rate of china will start to slow. Because

of one child policy of China and also for low fertility rate, the future working age group will


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shrink continuously. Authors recommended some policy implications to keep China’s high rate

of economic growth adjusting with ongoing change in age structure, like, increasing work

participation rate by providing employment scope to the huge underemployed persons, increase

in wage rate, giving suitable training, increase in the fertility rate which is 1.8 children per

women at present, modification the behavioral responses of the people with extended longevity,

revision of retirement age etc.

Bloom, David E., Canning, D. and Fink, G. (2011), in the working paper entitled “Implications

of Population Aging for Economic Growth” examine the overall effect of population ageing on

economic growth which can occur in mainly two ways, that is, labor supply and human capital

accumulation.; and also through light on different policies and institutional environment which

determine the consequences of population ageing on economic growth. On the basis of UN

population projection report, the authors say that the world population of 60+ people will

increase to 2 billion by 2050 from 200 million in 1950. The authors also state that, there exist a

difference between developed and developing countries in case of population ageing. At present

20% of the population in developed countries are in the age group of 60+ which increases to over

30% in coming four decades; whereas in developing countries this ratio will increase from 10%

to more than 20% within 2050. By the period of 2050, 20% of India’s aged population and 31%

of China’s aged population will constitute more than 750 million of global population. Decline in

fertility rate, increase in life expectancy rates and past variations in birth and death rates are the

main three driving factors of population ageing and as per the authors, these driving factors are

more active in developing countries compare to developing countries. Population ageing has

negative effect on economic growth as old people are able to work less, produce less and save

less but needs extra health and social support which implies an extra burden on young working


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age group. As the number of aged people increase, the demand for government resources, family

resources and personal savings also increases simultaneously, which resources neither can be

used for economic growth. All these factors also imply that, as elder proportion of population in

an economy increases per capita income of that economy will decreases. Increase in retirement

age, life cycle behavioral change of individuals like work longer or save more can mitigate the

negative effect of ageing on economy. There exist time variations of population ageing in

different regions of the world, and migration from less aged economy to more aged economy

also converse the depressing effect of population ageing for the second category of economy.

According to the authors, these policy implications are suitable for the regions which are not

facing the problem of population ageing right now but may face this in near future.

Bloom, David, E. (2011), in his paper “Population Dynamics in India and Implications for

Economic Growth”, tries to explore the new economic growth opportunities on the ground of

ongoing demographic changes in India. During the period of 1960 to 2000, India’s population

has grown at a rate of 1.4% per annum whereas for global population, this rate was 2%.

Evidences show that, hasty growth in population rate along with fast decline in mortality rates do

not match the rate of increase in income per capita which violets the Malthusian law. According

to the author, demographic transition results from decline in fertility and mortality rates and

especially reduction in infant and child mortality rates causes baby boom which have a large

effect on economic growth of any country. At initial stage, this baby boom generation needs

social, economical, educational and medical cares which have no productive outcome and may

slow the economic growth of that country. But when this generation enters into the working age

they expand the economic growth as well as per capita income of the country. When this

generation reaches to their 60+ age group, the growth rate of country again become slows down


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as elders produce and saves less but consumes much. As per the author, health is a very

important driver of economic growth. Studies show that, healthier countries are experiencing

faster economic growth along with additional increase in life expectancy rate. In case of India,

there were 165 deaths per thousand live births in 1950 which decreases to 50 at present, fertility

rate decreased to 2.7 children per women today from 6 children per women in 1950, life

expectancy rate also increased at an average rate of 4.5 years per decades since 1950. India’s

population is projected to increase to 1.6 billion by 2050. By 2030, the fertility rate in India will

drop to 1.4 and India will have higher working age that ever seen in East Asia resulting increase

in per capita income in India. But for this, Indian policy makers have to introduce proper

policies, like good governance, efficient infrastructure, prudent fiscal and macroeconomic

management, well developed and competitive financial markets, investment in education and

training.

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