Aging populations threaten G20 fiscal sustainability, says taskforce
G20 countries need to urgently reform their tax systems, improve productivity and rethink conventional macroeconomic policies if they are to protect their economies from the knock-on effects of aging populations, according to a G20 task force.
The Think20 (T20) Task Force on Aging Population also recommended introducing greater means testing for social security payments, easy-to-understand financial products, such as lifetime annuities, and universal access to healthcare and long-term care for the elderly.
The recommendations will be considered ahead of the G20 Osaka Summit in Japan on 28-29 June. It is the first time a T20 task force has addressed the challenges posed by aging populations.
Globally, people are living longer and having fewer children. Governments are scrambling to deal with what that means for families and retirement pensions, and the cost of care for the growing number of elderly citizens.
Countries that have developed infrastructure to address aging must find ways to sustain those programs in the face of declining populations and workforces, said Scientia Professor of Economics at UNSW Sydney, John Piggott, who is Director of the ARC Centre of Excellence in Population Ageing Research (CEPAR).
“Also, the speed of aging of emerging economies is much faster than that experienced by the developed countries of the global north, adding urgency to policy formulation,” said Professor Piggott, who is co-chair of the Aging Population Task Force, one of 10 groups set up to deal with the challenges faced by G20 countries.
The T20 is a network of research institutes and think tanks that provides research-based policy advice to the G20.
Alongside aging population, other areas of research include climate change and the environment, cryptocurrency and fintech and cooperation with Africa.
Other T20 recommendations about aging populations include:
- Improving workers’ productivity and adaptability
- Eliminating gender and seniority-based pay gaps
- Improving the collection and analysis of population data
- Supporting the adoption of evidence-based medicine to better match medical best practices with the evolving needs of aging populations
- Establishing an assessment framework for social security systems, particularly in developing economies.
You can read more about the T20 recommendations here.