Submission Type
Poster
Abstract
Throughout most of recent history, the elderly population has increased gradually across many countries, particularly the United States. The old age dependency ratio (OADR), defined as the ratio of the elderly population to the young, working population, has also increased along with the elderly population ratio. Since 2010, the OADR has maintained an average 3.03% yearly increase, excluding 2020. This constant increase in the OADR is significant because as the OADR increases, governments face higher levels of pressure to fund healthcare programs and pensions. This, in turn, causes government spending to increase, likely leading to an increase in taxes to offset the increase in spending. Increases in taxes usually lead to the average household bringing home a smaller amount of their paycheck, decreasing their disposable income. Another component of the OADR is the birth rate. Since 2010, in the U.S, the average birth growth rate is -0.92% per year, meaning that the birth rate has been steadily declining over time. The OADR tends to rise as the birth rate falls since the elderly population would increase at a higher rate than the working population. It is dangerous for the OADR to rise too quickly since funds for other government programs, such as those beneficial to younger populations, may be shifted to elderly programs to support the increasing population. By comparing the trends in the OADR and certain economic variables such as elderly employment rate, and government spending, we seek to make relevant policy suggestions to ease these predicted issues.
Recommended Citation
Hoch, Matthew, "200-How Aging Populations Affect the Economy" (2024). GREAT Day Posters. 53.
https://knightscholar.geneseo.edu/great-day-symposium/great-day-2024/posters-2024/53
200-How Aging Populations Affect the Economy
Throughout most of recent history, the elderly population has increased gradually across many countries, particularly the United States. The old age dependency ratio (OADR), defined as the ratio of the elderly population to the young, working population, has also increased along with the elderly population ratio. Since 2010, the OADR has maintained an average 3.03% yearly increase, excluding 2020. This constant increase in the OADR is significant because as the OADR increases, governments face higher levels of pressure to fund healthcare programs and pensions. This, in turn, causes government spending to increase, likely leading to an increase in taxes to offset the increase in spending. Increases in taxes usually lead to the average household bringing home a smaller amount of their paycheck, decreasing their disposable income. Another component of the OADR is the birth rate. Since 2010, in the U.S, the average birth growth rate is -0.92% per year, meaning that the birth rate has been steadily declining over time. The OADR tends to rise as the birth rate falls since the elderly population would increase at a higher rate than the working population. It is dangerous for the OADR to rise too quickly since funds for other government programs, such as those beneficial to younger populations, may be shifted to elderly programs to support the increasing population. By comparing the trends in the OADR and certain economic variables such as elderly employment rate, and government spending, we seek to make relevant policy suggestions to ease these predicted issues.