Peter Kresl: Population aging is not necessarily a “time bomb”

Population aging maypossibly reduce economic competitiveness.

While some cities are seeing population aging, others may be witnessing anincreasingly young population, which mainly depends on the birth rate and thenet inflow of migrants. An important indicator to measure population agingwould be the aged dependency ratio, that is, the ratio of older dependents—peopleolder than 65 or even older—to the working-age population—those ages 16-64.Till 2030, Italy will reduce the ratio from 4:1 to 1:1; Canada, Japan and maincountries and regions in the European Union will reduce it to somewhere between1.5:1 and 2:1; Australia, the Iceland, Norway and America to 2.5:1. The ratioin China is 8.6:1 now, and is expected to be reduced to 1.5:1 till 2050. Thatmeans, till then, each and every working-age Chinese will have to bear theirown and family burdens as well as 2/3 of the burdens of the elderly who do nothave medical insurance or old-age pension. Unless China gets more financialsupports in a short term or reduces the welfare of its elderly, the Chineseyoung people will have to bear an enormous financial burden.

Nomatter which country, no matter what choice made, the above economicconsequences would reduce the country’s economic competitiveness. To raisetaxes to ensure the welfare of the elderly in the following decades willincrease the production and service costs in a short term. Given the importanceof voting by the elderly in a country that is going through population aging,it is difficult for the government leaders to reduce the welfare of theelderly. For another thing, high tax burden will render well-educated and highly-skilledyoung people to leave and move to another country with a proper aged dependencyratio. As can be seen, if tax is raised to increase the welfare of the elderlyinstead of being used in infrastructure, creativity or education, it willreduce the international competitiveness of the economy, and cause the drainageof the most valuable labor force in the society. It is therefore quiteunderstandable why population aging is regarded as a “time bomb”

Luckily,population aging would not cause serious consequences that we thought, evenplay a positive role in urban development or the urban economy if proper policymeasures are introduced. The following is an analysis of the distribution oftime and money by the elderly and its influence on the urban economy.Specifically, three aspects, namely housing, time and income, are analyzed.When people retire, they will stop living the way that has been kept for decades,or living in a fixed place due to work; their children will leave the family,and they will have spare time to do what they want, spend money instead ofsaving it. All these decisions made by the elderly will have enormous impactson urban development or the urban economy. After visiting 39 cities in the U.S.and the European Union and interviewing government officials and researchers,we have collected extensive information and data, and studied the impacts ofthe relocation as well as the time and money distribution in studies andcultural activities by the elderly.

Curbingthe degradation of central cities, that is, the reselection of residence hascurbed the degradation of many central cities in the United States.

Similaror the same situations are found to be staged in many cities. A number ofhealthy, relatively wealthy, very possibly floating and well-educated seniorpeople are attracted by the cultural and urban atmosphere of a city. Theytherefore move from small towns to the downtown of a city, making possible“aging revival” in the city and bringing a city in the recession back to healthand vitality.

InEurope, the same phenomenon happens in Hamburg, Germany and Malmo, Sweden. Inmany European cities, reselecting residence is limited by the residenceconditions, the house rental contract, etc.

Learningactivities. Lifelong learning is popular in the U.S. and European cities. Datashow that 44% of the lifelong learners in the U.S. are people aged between 50and 54. This part of the American population, of which 23% are senior peopleabove the age of 65, receives various forms of education mostly because theyintend to keep a job or the skills related to their original occupation. Thecase can be found in almost all cities.

Culturalactivities. When observing the time and money invested in cultural activitiesby the elderly, we found that more and more senior people go to concerts orvisit art museums. Lately, a research in California shows that 2/3 of theelderly visited the museum of art in the year past, up 50% over that 20 yearsago; meanwhile, 54% of the elderly visited the museum of art more than twice.In America, the proportion of visits by people of 75 years or older isdeclining on the whole, but people aged between 64 and 75 still watch classicmusicals, opera performances and dramas to varying degrees. Middle-aged people,that is, people aged between 45 and 54, are the most active of all, and show asignificantly higher degree of participation in such activities.

Ithas to be pointed out that these activities of the elderly play a positive rolein improving a city’s competitiveness. Revived city centers attract tourists,especially those who are well-educated and skilled.

Ascan be seen, the elderly can’t be simply regarded as a social burden. On thecontrary, it is very likely that they have a positive influence on the economythrough the introduction of corresponding policies. To ensure their positiverole, the local governments are suggested to help them improving their mobilityamong cities, and guide them to spend time and money in the above beneficialaspects—that means perfect public traffic to ensure residents’ safe traffic, pleasinggardens for walks and meetings with friends, and “the elderly-friendly”cultural and lifelong learning facilities. It may need a lot of money, but itwill be offset by the benefits thus brought.

It is urgent for theChinese cities to capture the benefits of population aging.

Forgovernment officials in Chinese cities, they have sufficient chances to graspthe benefits of population aging. Although not all the Chinese elderly can havea handsome income or receive good education in the following decades, theChinese population is so huge that each and every Chinese city still stands thechance to attract large numbers of healthy, wealthy and well-educated senior peopleand benefit from it. It is obvious in China that parents would move from smalltowns to big cities to follow their children who work there and live with theirchildren. That’s only one of the beneficial features for the Chinese citiesdiscovered in this paper. It is believed that there will be more discoveries.

Inthe following several years, the group of the senior people will be viewed as avery important factor for the population competition in different cities.Therefore, city leaders are suggested to take corresponding policy measures tonot only attract young, well-educated and skilled laborers but also healthy,wealthy, highly-floating and well-educated senior people.