Well-being and social policies
The economic effects of an aging population are considerable. Older people have higher accumulated savings per head than younger people but spend less on consumer goods. Depending on the age ranges at which the changes occur, an aging population may thus result in lower interest rates and the economic benefits of lower inflation. Because elderly people are more inflation-averse, countries with more elderly tend to exhibit lower inflation rates. Some economists see advantages in such changes, notably the opportunity to progress automation and technological development without causing unemployment. They emphasize a shift from GDP to personal well-being.
Population aging increases some categories of expenditure, including some met from public finances. The largest area of expenditure in many countries is health care, whose cost is likely to increase as populations age. This present government with choices between higher taxes, including a possible reweighing of tax from earnings to consumption, and a reduced government role in providing health care. However, recent studies in some countries demonstrate the rising costs of healthcare are more attributable to rising drug and doctor costs, and higher use of diagnostic testing by all age groups, and not to the aging population as is often claimed.
The second-largest expenditure of most governments is education and these expenses tend to fall with an aging population as fewer young people would continue into tertiary education as they would be in demand as part of the workforce.
Social security systems have begun to experience problems. Earlier defined benefit pension systems are experiencing sustainability problems due to the increased longevity. The extension of the pension period was not paired with an extension of the active labor period or a rise in pension contributions, resulting in a decline of replacement ratios.
The expectation of continuing population aging prompts questions about welfare states’ capacity to meet the needs of their population. In the early 2000s, the World’s Health Organization set up guidelines to encourage “active aging” and to help local governments address the challenges of an aging population (Global Age-Friendly Cities) with regard to urbanization, housing, transportation, social participation, health services, etc. Local governments are positioned to meet the needs of local, smaller populations, but as their resources vary from one to another (e.g. property taxes, the existence of community organizations), the greater responsibility on local governments is likely to increase inequalities. In Canada, the most fortunate and healthier elders tend to live in more prosperous cities offering a wide range of services, whereas the less fortunate don’t have access to the same level of resources. Private residences for the elderly also provide many services related to health and social participation (e.g. pharmacy, group activities and events) on site; however, they are not accessible to the less fortunate. Also, the Environmental gerontology indicates the importance of the environment in active aging. In fact, promoting good environments (natural, built, social) in aging can improve health and quality of life, as well as reduce the problems of disability and dependence, and, in general, social spending and health spending.
An aging population provides an incentive for technological progress, as some hypothesize the effect of a shrinking workforce may be offset by technological unemployment or productivity gains.
Generally, in West Africa and specifically in Ghana, social policy implications of demographic aging are multidimensional, (such as rural-urban distribution, gender composition, levels of literacy/illiteracy as well as their occupational histories and income security). Current policies on aging in Ghana, seem to be disjointed, in which there are ideas on documents on how to improve policies in population aging, however, these ideas are yet to be concretely implemented perhaps due to many arguments for example that older people are only a small proportion of the population.
Due to the aging population, globally, many countries seem to be increasing the age for old age security from 60 to 65 (and higher, Netherlands is 67), to decrease the cost of the scheme of the GDP. Age Discrimination can be defined as “the systematic and institutionalized denial of the rights of older people on the basis of their age by individuals, groups, organizations, and institutions”. Some of this abuse can is the result of ignorance, thoughtlessness, prejudice and stereotyping. Forms of discrimination: economic accessibility, social accessibility, temporal accessibility and administrative accessibility. In the majority of the countries worldwide, particularly countries in Africa, older people are typically the poorest members of the social spectrum, living below the poverty line.
In the latter half of the last century, the world’s developed nations completed a long process of demographic transition. The field of demography describes this demographic transition as a shift from a period of high mortality, short lives, and large families to one with a longer life expectancy and far fewer children.
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