Friday, January 03, 2014

Implication of ageing population

The graph below depicts the 'support ratio' for NZ over the next 46 years. The support ratio is the ratio of workers to consumers. The best way to reduce the drop is through greater immigration (the blue line) although at some point immigrants also become consumers and not workers. Increasing fertility takes women out of the workforce so produces more consumers in the short term (the green line). Whichever way you look at it by 2060 the ratio will be probably lower than ever before. And in 1960, when families produced three,  four or five children, the consumers were generally less expensive than those of the future - more predominantly the elderly. Though I guess that's a debatable point.



2 comments:

S.Beast said...

You can be a burden to the state long before you reach an advanced age.

In any case NZ has at least made moves to rely on other income such as royalties from mining and drilling (although IMHO it could do a much better job by insisting on tougher conditions and higher % royalties).

If we offered better incentive for younger self-starters from overseas we could at least get closer to break even(!).

Baxter said...

The implications don't seem to consider progress in automation, robotics and computor advancements.