COSTS OF A SHRINKING SOCIETY
Beyond its impact on economic growth, an ageing and shrinking population also imposes significant social strains.
- Financial support for silver generation
The old-age dependency ratio among OECD nations is projected to rise to 52 per cent in 2060 – meaning there will be 52 elderly for every 100 working adults – up from about 33 per cent in 2025.
Naturally, the rising cost of supporting an ageing population with an increasingly narrow base of younger workers to foot the bill is one major issue countries with shrinking populations have to contend with – something that Singapore is all too familiar with.
Singapore’s spending on social development has already nearly doubled within a decade, from about S$31.3 billion (US$24.4 billion) in financial year 2015 to S$61.3 billion in financial year 2025. Experts previously told CNA TODAY that the increase was largely driven by the need to care for the nation’s ageing population.
Countries with ageing and shrinking populations have seen how this heavy spending can take a toll.
In Italy, the European Commission noted that the average deficit in the nation’s pension system – meaning the difference between contributions and gross expenditure – is expected to be “more than 4 per cent of GDP” for the period between 2022 and 2050.
