"For most of history until well into the nineteenth century, the elderly comprised only a tiny fraction of the population, never more than 5 percent in any country. In the developed world today, they comprise roughly 20 percent of the population. Three decades from now in 2040, that share is on track to reach 30 percent."
So begins the latest "Global Aging Preparedness Index," a report released by the Center for Strategic and International Studies, a bipartisan nonprofit interested in policy initiatives and their impact on anticipated future changes.
Given the seismic shift in age demographics, the Center asked, "Not how to keep the old-age dependency burden from rising at all as a share of GDP, but how to minimize the extra burden on the young while maintaining or even improving the living standard of the old."
The report compares the preparedness of 20 countries around the world to sustain quality of life in old age without undue burden on the young, The measures were based on two factors: The sustainability of the public benefit programs that support the country's aging population, and the "income adequacy" of the older population to provide for itself.
In terms of elderly benefits as a percent of GDP, India ranks the lowest of the 20 countries, Italy the highest, and the U.S. in the middle. Middle class seniors in the U.S. scored in the lower quartile for dependence on public benefits, relying on them for 39 percent of their cash incomes, But, given an immediate 10 percent cut in benefits, 3 percent of the population would be pushed into poverty, the study found.
Net, net: researchers proposed that the trend of cutting benefit provisions for the elderly needs to be balanced with policies that maintain their standard of living:
"Two strategies in particular are crucial if countries are to escape or at least mitigate what is too often a zero-sum trade-off between fiscal sustainability and income adequacy: extending work lives and increasing funded pension savings." Read the report.