Aging of Population

In 2005, Japan had the highest median age of all countries in the world, while Australia's population was only moderately aged. About 50 years ago, the demographic situation was quite different, with Australia's median age seven years older than Japan's. The ageing of the population is a major issue for Australian policymakers, particularly in regard to the long-term implications for reduced economic growth and the increased demand for Age Pensions, and health and aged care services. As the population ages, growth in the number of people of working age will slow, while the proportion of people of retirement age will increase. Sustained population aging also leads to slowing or negative population growth. While some environmentalists and social scientists welcome declining population growth in developed countries, economists tend to agree that population decline brings gloomy economic prospects. In addition to a smaller labor supply, the demand side of the economy may be affected by shrinking markets for goods and services. How quickly this occurs depends on the dynamics of fertility, mortality, and overseas migration. While a moderate pace of demographic change allows the economy and policies to adjust gradually to changing population demographics, rapid change is harder to manage. As a result, governments and society as a whole may need to take action to address these issues. But how severe is the ageing of Australia's population, relative to other countries? One way of applying a degree of perspective to the raging debate is to compare ageing in Australia with that of other countries. This article examines the population structures in Australia and Japan and the demographic forces that shape the respective populations, both historically and in projections for the future.