Background
The ratio of workers to pensioners (the "support ratio") is declining in much of the developed world. This is due to two demographic factors: increased life expectancy coupled with a fixed retirement age, and a decrease in the fertility rate. Increased life expectancy (with fixed retirement age) increases the number of retirees at any time, since individuals are retired for a longer fraction of their lives, while decreases in the fertility rate decrease the number of workers.
In 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. By 1980, the support ratio dropped to 5.1 and by 2010 it was 4.1. It is projected to reach just 2.1 by 2050. The average ratio for the EU was 3.5 in 2010 and is projected to reach 1.8 by 2050. Examples of support ratios for selected countries in 1970, 2010, and projected for 2050:
| Country | 1970 | 2010 | 2050 (projected) | |||
|---|---|---|---|---|---|---|
| United States | 5.3 | 5.3 | 4.5 | 4.5 | 2.6 | 2.6 |
| Japan | 8.5 | 8.5 | 2.6 | 2.6 | 1.2 | 1.2 |
| Britain | 4.3 | 4.3 | 3.6 | 3.6 | 2.4 | 2.4 |
| Germany | 4.1 | 4.1 | 3.0 | 3 | 1.6 | 1.6 |
| France | 4.2 | 4.2 | 3.5 | 3.5 | 1.9 | 1.9 |
| Netherlands | 5.3 | 5.3 | 4.0 | 4 | 2.1 | 2.1 |
Read more about this topic: Pensions Crisis
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