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Population aging is a phenomenon that occurs when the median age of a country or region rises due to rising life expectancy and/or declining birth rates. There has been, initially in the more economically developed countries (MEDC) but also more recently in less economically developed countries (LEDC), an increase in life expectancy which causes the aging of populations. This is the case for every country in the world except the 18 countries designated as "demographic outliers" by the UN. For the entirety of recorded human history, the world has never seen as aged a population as currently exists globally. The UN predicts the rate of population ageing in the 21st century will exceed that of the previous century. Countries vary significantly in terms of the degree, and the pace, of these changes, and the UN expects populations that began ageing later to have less time to adapt to the many implications of these changes.
Population aging is a shift in the distribution of a country's population towards older ages. This is usually reflected in an increase in the population's mean and median ages, a decline in the proportion of the population composed of children, and a rise in the proportion of the population that is elderly. Population ageing is widespread across the world. It is most advanced in the most highly developed countries. The Oxford Institute of Population Ageing, however, concluded that population ageing has slowed considerably in Europe and will have the greatest future impact in Asia, especially as Asia is in stage five of the demographic transition model.
Among the countries currently classified by the United Nations as more developed (with a total population of 1.2 billion in 2005), the overall median age rose from 29.0 in 1950 to 37.3 in 2000, and is forecast to rise to 45.5 by 2050. The corresponding figures for the world as a whole are 23.9 in 1950, 26.8 in 2000, and 37.8 in 2050. In Japan, one of the world's most quickly ageing countries, in 1950 there were 9.3 people under 20 for every person over 65. By 2025 this ratio is forecast to be 0.59 people under 20 for every person over 65.
Population ageing arises from two (possibly related) demographic effects: increasing longevity and declining fertility. An increase in longevity raises the average age of the population by increasing the numbers of surviving older people. A decline in fertility reduces the number of babies, and as the effect continues, the numbers of younger people in general also reduce.
Of these two forces, it is declining fertility that is the largest contributor to population ageing in the world today. More specifically, it is the large decline in the overall fertility rate over the last half century that is primarily responsible for the population ageing in the world’s most developed countries. Because many developing countries are going through faster fertility transitions, they will experience even faster population ageing than the currently developed countries in the future.
The rate at which the population ages is likely to increase over the next three decades; however, few countries know whether their older populations are living the extra years of life in good or poor health. A "compression of morbidity" would imply reduced disability in old age, whereas an expansion would see an increase in poor health with increased longevity. Another option has been posed for a situation of "dynamic equilibrium". This is crucial information for governments if the limits of lifespan continue to increase indefinitely, as some researchers believe it will. The World Health Organization's suite of household health studies is working to provide the needed health and well-being evidence, including, for example the World Health Survey, and the Study on Global Ageing and Adult Health (SAGE). These surveys cover 308,000 respondents aged 18+ years and 81,000 aged 50+ years from 70 countries.
The Global Ageing Survey, exploring attitudes, expectations and behaviours towards later life and retirement, directed by George Leeson, and covering 44,000 people aged 40–80 in 24 countries from across the globe has revealed that many people are now fully aware of the ageing of the world's population and the implications which this will have for their lives and the lives of their children and grandchildren.
Canada has the highest per capita immigration rate in the world, partly to counter population ageing. The C. D. Howe Institute, a conservative think tank, has suggested that immigration cannot be used as a viable mean for countering population ageing. This conclusion is also seen in the work of other scholars. Demographers Peter McDonald and Rebecca Kippen comment, "[a]s fertility sinks further below replacement level, increasingly higher levels of annual net migration will be required to maintain a target of even zero population growth".
Ageing around the world
Asia and Europe are the two regions where a significant number of countries face population ageing in the near future. In these regions within twenty years many countries will face a situation where the largest population cohort will be those over 65 and average age approach 50 years old. The Oxford Institute of Ageing  is an institution looking at global population ageing. Its research reveals that many of the views of global ageing are based on myths and that there will be considerable opportunities for the world as its population matures. The Institute's Director, Professor Sarah Harper highlights in her book Ageing Societies  the implications for work, families, health, education, and technology of the ageing of the world's population.
Most of the developed world (with the notable exception of the United States) now has sub-replacement fertility levels, and population growth now depends largely on immigration together with population momentum which arises from previous large generations now enjoying longer life expectancy.
Of the roughly 150,000 people who die each day across the globe, about two thirds—100,000 per day—die of age-related causes. In industrialized nations, the proportion is much higher, reaching 90%.
The economic effects of an ageing population are considerable. Older people have higher accumulated savings per head than younger people, but spend less on consumer goods. Depending on the age ranges at which the changes occur, an ageing population may thus result in lower interest rates and the economic benefits of lower inflation. Some economists (Japan) see advantages in such changes, notably the opportunity to progress automation and technological development without causing unemployment. They emphasize a shift from GDP to personal well-being.
However population ageing also increases some categories of expenditure, including some met from public finances. The largest area of expenditure in many countries is now health care, whose cost is likely to increase dramatically as populations age. This would present governments with hard choices between higher taxes, including a possible reweighing of tax from earnings to consumption, and a reduced government role in providing health care. However, recent studies in some countries demonstrate the dramatic rising costs of health care are more attributable to rising drug and doctor costs, and higher use of diagnostic testing by all age groups, and not by the ageing population as is often claimed.
The second-largest expenditure of most governments is education and these expenses will tend to fall with an ageing population, especially as fewer young people would probably continue into tertiary education as they would be in demand as part of the work force.
Social security systems have also begun to experience problems. Earlier defined benefit pension systems are experiencing sustainability problems due to the increased longevity. The extension of the pension period was not paired with an extension of the active labour period or a rise in pension contributions, resulting in a decline of replacement ratios. In recent years, many countries have adopted policies to strengthen the financial sustainability of pension systems, although the challenges regarding pension adequacy remain.
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