A numbers game: The changing face of demographics
BY  |  

In 2011, a dramatic shift occurred throughout the developed world - working age populations began a multi-decade decline. Demographic shifts like this in an economy can have profound effects, including changes in growth and debt metrics. To understand these effects we will start by explaining the economic effects in simple terms, seek insights from Japan, which was the first economy to undergo the demographic shift, and determine the impact on the world's ten largest developed economies.

Back when it all began

From a demographic perspective, the developed world changed in 2011 when a population tailwind turned into a headwind. The yearly change in working age population (those aged 15 - 64) across the developed world went from a clear positive to a consistent negative.

Between 1950 and 2008 the developed world was adding approximately 2 - 6 million working age people per year to the economy, allowing workforces to expand globally. However, since 2011 the number of working age people in the developed world has been declining by approximately 2.5 million each year, with the expectation that this will continue over the decades to come.

Link to something cPxwQW7M