The column argues that, on average in the OECD, stabilising the old-age dependency ratio between 2015 and 2050 requires an increase in retirement age of a stunning 8.4 years. This number far exceeds the projected increase in longevity and increases in retirement age driven by pension reforms alone.
Population ageing is a fast-accelerating, long-term trend. We can show this using the old-age dependency ratio – a demographic indicator that measures the size of non-working age groups of the population relative to that of people of working age.1 Figure 1 shows averages for OECD countries. In 1980, there were 20 people aged 65 or older for every 100 people of working age (that is, aged between 20 and 64). By 2015, this number had increased by 40%, to 28 people aged 65 or over for every 100 of working age. Project forward another 35 years, the ratio will be 53 to 100 in 2050 based on UN mortality projections (United Nations 2017) – a further increase of 90%. This is because we are living longer and having fewer children.