Population Ageing

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INTRODUCTION

The United Nations (2002) suggest that the older population is growing at a faster rate in the less developed regions and they will be increasingly concentrated in these regions. Population ageing process will impose greater policy problems for developing countries than it is now beginning to pose for policy makers in the industrialized countries. This is especially because ageing issues have not been a major concern of leaders in developing nations (Schulz & Myles cited in Binstock & George 1990).

According to Schulz & Myles (cited in Binstock & George 1990), the developing nations’ leaders have not prioritized ageing issues in their agenda for at least four major reasons. First, the economic and political position of older persons is generally strong in developing countries. Second, their proportion is relatively small. Third, governmental development priorities favor expenditures which invest in the long-term productive potential of the young. Finally, the elderly are viewed as impeding development because they resist change and have less adaptive human capital than the young.

The implications of population ageing in both developed and developing regions will be compared to justify the statement that population ageing will create greater problems in developing countries than in developed countries. Developed countries will be represented by Australia and Indonesia will represent developing countries.

 

DESCRIPTION OF POPULATION AGEING IN AUSTRALIA AND INDONESIA

The table (Table 1.) illustrates that the proportion of persons over 65 years of age in Indonesia in 2000 was lower than Australia, about a third. Developing countries, likewise Indonesia, tend to have higher number of population compared to developed countries. In this sense, although the proportion of the elderly in developing countries is much lower than those in developed countries, they could bring significant challenges on socioeconomic conditions.

Percentage of female elderly was higher than male in both regions. This may be because female life expectancy was higher than male.

Table 1. Population Condition in Australia and Indonesia in 2000

Indicator

Age

Australia

Indonesia

Percentage in older ages

65+

 

 

Total

12.3

8.4

Female

13.7

9.2

Male

10.8

7.6

Ageing index

 

79.6

55.8

Broad age groups (%)

0 -14

20.5

23.0

15-59

63.1

64.2

60+

16.3

12.8

Median age (years)

 

35.2

33.0

Dependency ratio

Total

48.8

45.7

Youth

30.5

33.5

Old age

18.2

12.2

Total fertility rate (per woman)

 

1.8

2.1

Life expectancy (years)

Birth

 

 

Total

79.2

73.9

Female

82.0

76.2

Male

76.4

71.7

Labor force participation (%)

65+

 

 

Total

5.2

35.2

Female

2.4

24.1

Male

9.1

48.5

 Source: United Nations 2002, World population ageing: 1950-2050, New York

Ageing index, median age, and life expectancy in Indonesia were lower than Australia. These measurements indicate that health services and technology in developed countries were considerably better than in developing countries.

In 2000, there was more elderly labor force participation in Indonesia (39.8%) than in Australia (5.2%). This may be because Indonesia was an agricultural country, so that the elderly were still involved in labor force as there was no retirement age regulation.

The proportion of people beyond age 60 in Indonesia in 2000 was 7.6% and the percentage of young population (0-14 years old) was 30.8%. Whereas the proportion of people age 60 and over in Australia in 2000 was 16.3% and the percentage of young population was 20.5%. Since Indonesia has more population than Australia, about ten times than Australian population, Indonesian population was much younger than Australian population. Figure 1 and Figure 2 of population pyramids reinforce this conclusion.

Figure 1. Australia population pyramids

 

Source: United Nations 2002, World population ageing: 1950-2050, New York

Australian population pyramid in 2000 was already in beehive shape in which there was a transfer of some weight from younger to older group so that the proportion of old and young population was almost the same. While Indonesia was still in pyramid shape in which the number of young population was higher than the number of old population.

Apparently, the speed of population ageing process in Indonesia will be faster than Australia. We can conclude this from Figure 1 and Figure 2. Both the Australian and Indonesian population pyramids in 2050 will be in the same ‘old’ rectangular shape. Indonesian low TFR (2.3) may contribute to fasten this process.

 

Figure 2. Indonesia population pyramids

 

Source: United Nations 2002, World population ageing: 1950-2050, New York

 

COMPARISON OF AGEING POPULATION IN BOTH COUNTRIES

Population ageing process in less developed countries will progress in a rapid phase within the next 30 years. It will bring greater implications on economic, social and welfare conditions in these countries compared to the industrialized ones. These impacts are partly due to the developing countries’ government unpreparedness to anticipate population ageing process. This is aggravated by the fact that the population ageing process is occurring more rapidly than the developing countries’ economic growth (Asia’s Ageing Population 2005).

 

  1. a.     Economic Implications of Population Ageing

The government should provide more money for retirement and the increasing demands for health services and medical costs (UN 2002). The elderly will be more dependent on governmental funding to fulfill their necessities.

Unfortunately, only civil servants will obtain pensions from the Indonesian government. There was no superannuation for private and professional employees in this country. Thus, many elderly will rely on their children to support them in their old age. On the other hand, Indonesia is included in low income countries because it has relatively low income per capita. In this sense, even though civil servant retirees will obtain pensions from the government, it will not be enough to finance their living cost. They will also depend on their children to support them.

In contrast, owing to being aware of the impacts of ageing process, the Australian elderly had anticipated this process by saving for their own retirement income (Rowland in Khoo & McDonald 2003). The Australian government also considered to extend the employment age in this country.

The policy to prolong the employment age is feasible to be implemented in developed countries since the health status of the elderly in these countries will enable them to be productive in their later age and there will not compete for a job with the youth. However, it will not easy to be implemented in developing countries because the health status of the current elderly in these countries may suffer from arduous earlier working lives (Heller 2006). Allowing the elderly to work in extended period will also increase crime rate in developing countries as there will be many young unemployment.

 

  1. b.     Social and Welfare Implications of Population Ageing

Many Australian elderly experience marriage breakdown and many of them are unmarried and childless. This situation leads to lack of family resources for the Australian elderly. In contrast, most of the Indonesian elderly are married and most of them have many children to support them in their later age. Thus, they have little possibility to experience loneliness and social isolation compared to those in Australia.

However, health status of the elderly in Australia is significantly better than those in Indonesia. Whereas, according to Heller (2006), the current elderly in developing countries may suffer from arduous earlier working lives so they will increase the burden on national healthcare systems (Asia’s Ageing Population 2005).

 

CONCLUSION

Population ageing will create greater policy problems for developing countries, especially for its future economic conditions, than it is now beginning to pose for policy makers in the industrialized countries particularly because the developing nations’ leaders have not prioritized ageing issues in their agenda. In other words, the government of developing countries has not anticipated this process. This is deteriorated by the fact that the population ageing process is occurring more rapidly than the developing countries’ economic growth (Asia’s Ageing Population 2005).

By: Yulaecha Padma Ichwanny

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