Friday, 19 March 2010

Population Concerns

We're seeing super lower fertility rates in southern Europe and eastern Europe where birth rates are 1.2 or 1.3 babies per family - which is way below replacement levels.
The Big Issue for March 1st had an article on the reducing population in western societies because of the shrinking birth rate.  The article went on to say that the solution was greater immigration, but without discussing what I see as a significant issue which is that of pension support (You knew I was over 50 didn't you? J).
The percentage of the total population who are over 65 is predicted to rise from 16% to nearly 20% in 2031 and 26.6% in 2071 Help the Aged
 The State Pension is paid from current income, and private pensions are currently invested in stocks and shares and other places.  As the proportion of retired people increases then a greater proportion of GNP will have to go on pensions, or pensions will have to be reduced.  Similarly the money currently invested will have to be disinvested to payout peoples pensions as the inflow into pension funds will be less than the outflow.  What will be the impact of this on the economy?  Supply and demand would suggest a reduction in the value of the assets as there would be less money chasing the investments, leading perhaps to a crash of pension schemes.

What can we do?  As the article suggested encouraging immigration would rebalance the proportion of people in the different age groups - alternatively start breeding!  Some without children have argued about supporting schools etc through taxation - no children = no future.

No comments:

Post a Comment


Related Posts with Thumbnails