By David Amaglobeli, Era Dabla-Norris & Vitor Gaspar

Unless you live in France, you might not think recent mass strikes over the proposed pension reforms in that country have anything to do with you.
But given how fast demographics are changing around the world, that would be a mistake. If you live in Europe and your parents are getting ready to retire at the age of 65 (the statutory retirement age in many countries), you should know that today there are, on average, 3.4 working-age people to support the retirement of every person 65 and older. By 2050, the year when you might be expecting to retire, that number is projected to dwindle to just 2.

Japan is already nearly at that point. By 2050, more than 35 other countries (about 7 percent of the world population) will join Japan. This implies a significantly higher
burden on workers to support retirees. This dramatic change will have important economic and social implications that cannot be ignored either by governments or by individuals.
This phenomenon is not confined to Europe or advanced economies more generally.

Aging is affecting all parts of the world, but to varying degrees. Two main factors are contributing to this shift in the age composition of the population: people are living
longer and having fewer children. Many countries in the Northern Hemisphere, particularly Japan, find themselves in a more advanced stage of this demographic transition. Others, mostly in Africa, are in the early stage.

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