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Why have the majority of OECD countries been getting older?
By Sara Kim, Staff Writer
Taking 75 to 200 million lives in the mid-1300s, the Black Death stands as a grim testament to humanity’s resilience. Afterwards, the human population rebounded with a boom. It took millennia for the global population to reach its first billion in the 19th century with the dawn of the Industrial Revolution.
Over time, with technological and societal advances, population growth accelerated. By the 1960s, the global population tripled to three billion—a feat achieved in just over a century. This exponential growth has greatly shaped the world today, compelling humanity to adapt to the pressures of a booming population.
But now, the narrative is shifting. Many Organisation for Economic Co-operation and Development (OECD) countries are grappling with the opposite challenge: a declining population. In such an unpredictable scenario, are we prepared for this demographic transition?
How Much Older Are OECD Countries Becoming?
Concerns about aging and decline are not new. Research published by the National Center for Biotechnology Information (NCBI) in 2013 highlighted factors contributing to slowing population growth. This includes advancements in fertility treatments, access to contraceptives, and evolving societal gender norms.
According to the U.S. Department of State, the OECD comprises 37 democracies with market-based economies, working together to promote sustainable economic growth. Most OECD member states are considered economically developed nations.
To put a comparison into perspective, a non-OECD country, Niger, holds the youngest median age globally due to its high fertility rate with about 6.320 births per woman. In contrast, Japan, an OECD member, ranks third globally in the oldest median age with 49.9 years and is undergoing a birth crisis.
These developments have brought fertility rates below the replacement level in many parts of the world, particularly in OECD countries. Here, replacement level refers to the rate at which a younger generation sufficiently outnumbers the older one, theoretically sustaining the labour force, public spending (i.e. education), and social welfare systems.
Without it, economies risk stagnation and social structures face strain. Such trends are emerging across the majority of OECD countries, including Canada, Japan, South Korea, and the United Kingdom.
According to data from OECD.org, Canada’s youth population under 15 years of age was at an all-time high in 1963, comprising about 33.5% of the total population. Fast forward to 2022, that percentage has declined to 15.6%, almost halving within a few decades. In other OECD countries, South Korea ranks first for having the lowest youth population with 11.5%, followed by Japan at 11.6%, and Italy at 12.6%.
For some time now, fertility rates in many OECD countries have remained consistently below the replacement level. This decline can be attributed to a mix of sociological, political, and economic factors. These include lower rates of teenage pregnancies and higher levels of female education, among many others.
Urbanization and modernization have also played significant roles, making economic adaptability difficult, such as unaffordable housing. For many young adults across these nations, including Canadians, the financial burden of raising a child has become increasingly unmanageable, leading to a waning desire—or even the ability—to start a family.
OECD Countries Are Inevitably Aging. What Now?
In Canada and other OECD countries, this trend carries long-term implications. By 2066, the average retirement age is projected to rise to 66.3 years, compared to 64.4 years today.
With fewer young people entering the workforce to support the growing number of retirees, the burden of funding social security and retirement benefits will likely fall on the very individuals relying on them. In essence, future generations may have to act as their own guarantors for economic dependence.
When a large cohort of people ages and retires simultaneously, the resulting societal strain could mean an unstable balance—some will “win” by receiving their benefits, while the majority of others, unable to shoulder the burden, will bear the loss.
However, this does not mean Canada and other OECD nations are doomed to economic or social collapse. Before the balance of age tips too far, OECD nations must confront the realities of their aging demographics and reckon with the implications for their economies and social systems, making necessary policy adjustments to meet both current and future challenges.
Humanity is adaptable, as seen in the population boom of the Industrial Revolution. The current world could adapt again, albeit in reverse.
