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From VOA Learning English, this is the Economics Report.
The world is getting older. As more people retire each year, fewer working-age people will be there to replace them. This has effects not only in the work place but in the world finance. The bond rating agency Moody's says the aging population will lead to a drop in household savings. This could mean that total investments will fall and economic growth could slow.
Some reports have described Japan, Italy and Germany as the world's "Super Aged" nations. That is the name for countries in which at least 20 percent of the population is at least 65 years old.
Elena Duggar is head of Moody's Sovereign Risk Division. She says changes in many populations are taking place quickly.
"The demographic transition is upon us now and its progressing, by historical standards, quite rapidly," Duggar said.
In five years, six more countries will join the list of "Super Aged" nations. And 34 nations will be super aged by the year 2030.
Elena Duggar says this will have a big influence on labor and savings.
"That will translate into reductions in labor supply. At the same time aging means that the household savings rates will go down, which will negatively impact on investment. Both trends put together would mean that aging will have a significant negative impact on global growth," Duggar said.
The Conference Board reports on business conditions around the world. It says an aging population could reduce world economic growth by one percent in the next ten years.
Kishore Kulkarni is with the Metropolitan State University of Denver. He says immigration is one way to reduce the effects of an aging population. Older adults spend money differently than younger ones. And experts say that difference affects the economies of countries.
But Kishore Kulkarni believes that specialized career training and productivity gains from technology could make up for the drop in the number of workers. He says the problems of an aging population represent only a mismatching or misalignment of the demand for goods.
"It is a misalignment of demand rather than a total and a drastic change in the demand. And it is a challenge which we can easily accept and tackle as it comes to us," Kulkarni said.
He also says that an aging population will be less of a problem in countries where older people are highly valued. And most experts agree that younger workers will have to work longer and retire later than today's older workers.
And that's the Economics Report from VOA Learning English. For more Learning English programs, go to our website learningenglish.voa.com. And follow us on Facebook and Twitter. I'm Mario Ritter.
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