The impact of ageing on development
The trend towards the successive ageing of population structures is bound to be one of the main challenges to international and national planning efforts during the last decades of this century and well into the twenty-first. In addition to the general considerations outlined above on the status and predicaments of the elderly sections of societies, and the review of the needs and potentialities of the elderly, attention should be given to the vast and multifaceted impact which the ageing of populations will have on the structure, functioning and further development of all societies of the world. The role of the public and private sectors in assuming responsibility for some of the functions now provided by the family in developing countries will probably have to increase under such circumstances.
In the first instance, it is evident that ageing, both in terms of absolute numbers and in terms of the relative proportion of the elderly in any society, will necessarily change the structure and composition of the economically active population. The most basic manifestation of this phenomenon will be the gradually deteriorating ratios between the economically active and employed sectors of society and those dependent for their sustenance on the material resources provided by these sectors. Countries with established social security systems will depend on the strength of the economy to sustain the accumulated charges of income-basis and deferred retirement benefits for a growing elderly population and the costs of maintaining dependent children and of ensuring training and education for young people.
Changing dependency ratios -- in terms of the number of old people depending for their material safety on younger, economically active and wage-earning people -- are bound to influence the development of any country in the world, irrespective of its social structure, traditions or formal social security arrangements. Problems of a social nature are likely to emerge in countries and regions where the ageing have traditionally benefited from the care and protection of their next of kin or the local community. Those relationships may become increasingly difficult to maintain when the number of dependent elderly increases while at the same time traditional care-providing structures, such as the extended family, are undergoing radical change in many regions of the world.
As mentioned above, the total dependency ratio in many countries may eventually be maintained at close to present levels, owing to the progressively decreasing number of non-employed and dependent children and youths resulting from shrinking birth rates. There remains, however, a political and psychological problem related to the perceptions of the relative urgency of covering the material and other needs of population groups not directly participating in production and public life. The costs of programmes in favour of the younger generations may be more easily acceptable in view of their value as a form of investment in the future; conversely, such costs in favour of the elderly -- especially when not directly related to individual savings or wage-related benefits -- are less easily accepted, particularly when they weigh heavily on already overstrained national budgets.
The problem of deteriorating dependency ratios, and hence of guaranteeing even minimal material security for older people with reduced capacities for earning, will be most acute in the rural areas, particularly in the less productive, subsistence farming areas of the developing countries, which already suffer from an escalating flight of the younger and more active sectors of the population towards the urban areas in search of wage-earning employment. This trend naturally leads to an even more insecure future for the older persons left behind and -- in a vicious circle of further deprivation -- reduces the chances of further simulating public investment in agriculture and services which would benefit the remaining farmers.
To some extent this phenomenon could be considered as partially offset or at least mitigated by the transfer of sustenance funds back from the younger people who have found salaried employment in the urban and industrialized areas. In many cases, the size of the remittances indicates an effort not only to help sustain the family, but to save for future investments, productive or not. For the immediate future, this phenomenon may help to soften the effects of the rural exodus and provide a certain level of material safety for the older and inactive left behind. Nevertheless, it can hardly be seen as a long-term reliable compensation for the migration of the young, active people from the rural areas or from their own countries. Concentrated efforts aimed at improving the socio-economic conditions prevailing in rural areas are indispensable, particularly considering the migrants' return to their country of origin.
Rural development should be seen as a key to the overall problem of the ageing in large parts of the world, as much as it is a key to balanced and integrated national progress in countries with an essentially agricultural economy. To some extent, policies to improve production and productivity in rural areas, to stimulate investment, create the necessary infrastructures, introduce appropriate technologies and provide basic services, could strengthen the generalized social security systems in force in other and more industrialized countries.
The slowly expanding lifespan of the population even in developing areas constitutes a hidden resource for national economies which, if properly stimulated and utilized, might help to compensate for the exodus of younger people, decrease the real dependency ratios, and ensure the status of the rural elderly as active participants in national life and production, rather than as passive and vulnerable victims of development.
A desirable compensation for the emigration of young people to other countries would be an improvement in the continuity of social benefits in terms of contributive rights to a pension, including favourable provisions for financial transfers in whatever form the benefits are granted to migrant workers. This would be not only equitable, but also consistent with the stimulation of the development of the economy of the home country. Bilateral and multilateral social security agreements must be developed to this effect. Other measures should accompany these efforts, notably in terms of providing housing for repatriates. While ageing migrants have the same needs as other elderly people, their migrant status gives rise to additional economic, social, cultural and spiritual needs. In addition, it is important to recognize the role the older migrants could play in the support of their younger counterparts.
In countries with fully developed social security systems linked to compulsory retirement age levels, overall ageing is, and will continue to be, one of the most important structural factors affecting the composition of the labour force. This phenomenon should not be considered solely in terms of its repercussions on the elderly. Because of their sheer dimension and close interaction with other sectors and processes affecting the active labour force, retirement policies cannot be treated in an isolated manner as a separate phenomenon. For various countries the most visible relationship is that between arrangements for retirement and problems of unemployment, especially among young people about to enter the labour force.
Much has already been said about that relationship, and various governmental actions have been considered or taken to respond to it. Whatever the apparent wisdom of lowering retirement age levels in order to open up employment opportunities for the young, such action can hardly be seen as anything but a short-term and partial solution of one social problem through the creation of another, probably longer-lasting one. More innovative actions should be considered at both extremes of the labour force structure.
On the other hand, the wide varieties in personal interests and preferences among people approaching retirement age could, without too many administrative or organizational changes, be taken into account in a system of elastic retirement plans catering to the individual. Where retirement is preferred, different age levels for voluntary early retirement can be established with reduced benefits and counterbalanced by extended employment periods for those older persons whose job constitutes their main commitment, and occasionally their main reason for living. Other arrangements, such as part-time or occasional work or consultancies, are already in use, especially at the higher technological and administrative levels, and could be extended to a greater part of the labour force. In order to implement this measure, provision should be made for training and retraining and the development of new skills.
The interrelationship between the employment and income needs of the young and the elderly raises particularly acute problems for women, whose longer life expectancy may mean an old age aggravated by economic need, isolation and with little or no prospects for paid employment.
Where social security systems based on accrued retirement benefits exist, the growth in the number and longevity of retired persons is now emerging as a major aspect of the husbandry of national economic resources, and is sometimes presented in terms of a gradual freezing of a large share of national wealth for so-called non-productive purposes. On the other hand, it will probably be recognized that the accumulation of retirement funds could constitute a stabilizing factor in the national economy, in the sense of providing for long-term and conservatively utilized sources of funding on a substantial scale, whose impact on otherwise fluctuating economic systems can be beneficial. In such systems, the purchasing power of the pensions paid should as far as possible be maintained.
Similarly, most pension payments from retirement funds represent deferred earnings by the individual retiree. The natural use of pension payments for immediate material needs rather than for long-term and insecure investments may also be a stimulating factor in societies heavily dependent on individual spending and consumption for their economic health.
Where formal retirement benefit systems do not yet exist, the economic implications of the ageing of societies are for the time being largely negative, and will probably continue to be so, unless serious and far-reaching efforts are made to turn this liability into a potential benefit for the whole of society. Governmental initiatives to promote material development and social well-being, and international action to sustain such initiatives, could be taken jointly in an effort to prepare for the future of those approaching old age in areas where traditional structures of protection are about to dissolve.
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