Implications of Age Differences Across the World

One of the many challenges facing the global economy is the implications of aging populations in developed countries and young growing populations in emerging countries. Several emerging markets are experiencing a manifestation of this today as much of the political unrest has been ignited by youth movements. The impetus may vary but at the core of most of the recent unrest is unemployment, inequalities perpetuated by a minority ruling party and rising food prices, or some combination of all the above.

Meanwhile, developed countries faced with aging populations, are facing smaller work forces, shrinking tax bases and strained social security systems. We are seeing the effects of this at work in Wisconsin…

This century, it's going to be more important than ever to understand the dynamics of age distributions in populations and how this will affect key socioeconomic issues across global markets. The CIA World Factbook: Median Age, provides the median age of most countries. Within the developed countries, the average median age is 40.83. Interestingly, we American’s are doing a good job replacing ourselves as we have a median age of 36.8; the lowest median age out of the top ten countries in the ACWI (MSCI All Country World Index). The two countries with the highest median ages, are two of the most industrialized; Germany at 44.3 and Japan at 44.6. In fact, Japan’s median age is well above any of its neighbors within the Asia-Pacific region. Within emerging markets, the average median age is 30.92. South Korea and Russia have the highest median ages – in the upper thirties while Brazil has a median age of 28.9. The lowest median age in the top ten emerging markets is South Africa at 24.7. In fact, low median ages are quite prevalent in Africa with Uganda at 15 and Egypt at 24.

Most economists believe that China and India are the two main challengers for economic supremacy in the 21st century, yet there are major differences in their demographic makeup; China currently has a median age of 35.2 while India has a median age of 25.9.

What does all this mean for the future? Lower median ages point towards larger future working-age populations and the likelihood of increasing demand for raw materials and agricultural products within emerging markets. On the other hand, a larger youthful population could lead to unrest, similar to what is happening in the Middle East and Northern Africa in recent weeks. So, to ensure some degree of stability it is incumbent on developing countries to provide at a minimum, the perception of equality, and to also enable their citizen’s to pursue meaningful and productive employment so that they can maintain purchasing power in an economic environment with rising prices due to increased demand.

Bottom line, farming may once again be a lucrative way to make a living!


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