Blog 01

Global Aging Trends: Introducing the Silver Wave

Mihirani Dissanayake and Mayuri Atapattu

Population dynamics around the world are changing intensely. The key changes observed are increasing life expectancy, reducing fertility and mortality at birth shifting the composition of the population and workforce. As per the estimates, the world’s adult population (60 years and above), which had shown 9 percent growth in 2019 forecasted to increase by 16 percent in 2050, which is a 120 percent growth trend, making the older adult population 1.55 billion in 2050 (Matt et al., 2017). A heap of literature illuminates the impact of changes in the population aging on the global economic and social context (AARP, 2022).

The development of the “Silver Economy” aims to tap into opportunities created by this demographic shift, addressing the unique needs of older populations and driving new economic growth. The following figure illustrates the projected changes in life expectancy across global and Asian populations, offering a snapshot of how aging demographics may impact economies, healthcare systems, and workforce structures in the years to come.

The figures highlight a significant shift in population age structure, especially in Asia, which is set to experience one of the most rapid increases in its older population segment. By 2050, adults aged 60 and above are forecasted to make up 16 percent of the global population, a sharp rise from 9 percent in 2019. This trend reflects the combined effects of improved healthcare, lower birth rates, and advancements in living conditions, which have all contributed to an extended life expectancy worldwide.

In Asia, where life expectancy continues to increase dramatically, the impact of an aging population will be particularly pronounced. Countries such as Japan, South Korea, and China are already facing workforce shortages, as fewer young people enter the labor market to replace retiring workers. Additionally, the dependency ratio, or the ratio of non-working (older) individuals to the working-age population, is expected to rise, which could strain healthcare systems and social services if unaddressed.

In Sri Lanka, 12.3% of the population is aged 60 and above, making it the country with the highest proportion of older adults in South Asia. The Western Province has the largest share of elderly residents at 31.7%, while the Northern Province has the smallest at just 4.8%. In the next 15 years, over 25% of Sri Lankans will be aged 60 or older. This demographic shift from a predominantly young population to an aging society presents a range of economic, health, and social challenges.

Firstly, as more workers retire and fewer young people enter the labor market, productivity is likely to decline. This reduction in the workforce will lead to decreased tax revenues, lower national income, and diminished economic growth, resulting in reduced savings. Additionally, the increasing number of retirees will place a significant strain on the public sector pension scheme, which currently accounts for nearly 2% of the country’s GDP and is projected to become fiscally unsustainable within the next decade.