After the wave: the advantages of demographic change - fewer and older, but smarter and healthier?

Fanny Kluge, Max Planck Institute for Demographic Research
Emilio Zagheni, Queens College, City University of New York (CUNY)
Elke Loichinger, Wittgenstein Centre (IIASA, VID/ÖAW, WU)
Tobias C. Vogt, Max Planck Institute for Demographic Research

Population aging is an inevitable global demographic process. Most of the literature on the consequences of demographic change focuses on the economic and societal challenges that we will face as people live longer and have fewer children. In this paper, we (a) describe key trends and projections of the magnitude and speed of population aging in Germany, (b) review the literature on the economic, social and environmental consequences of population aging, and (c) investigate some of the opportunities that aging societies create, using Germany as our case study. We argue that there are relevant positive unintended side effects of population aging that can be leveraged to address pressing environmental problems, issues of gender inequality and intergenerational ties. Will population aging and decline lead to less pollution, and environmental damage? Will expenditures for the young and old balance if huge expected private downward transfers (bequests) are taken into account? Will the increasing share of individuals proceeding to tertiary education change the skill composition of the labor force? Will the gains in life expectancy be years spend in better health? We address these questions using a wide range of data including National Transfer Accounts, projections of CO2 emissions, labor force by educational attainment, and time transfers.