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All the G-7 countries are also facing
increasing age dependency ratios – the
number of elderly people that need to
be sustained by the wealth generated by
the working population. Since the 1960s,
there have been very large increases in
dependency. This will be made significantly
worse in Japan, Germany and Italy as their
low birth rates results in a reduced working
population in the medium term.
International migrants tend to include a
larger proportion of working-aged persons
compared to the overall population.
Positive net migration can contribute to
reducing old-age dependency ratios as
well as driving up birth rate. However,
international migration cannot reverse,
or halt, the long-term trend towards an
aging population. Even if current migration
patterns continue, all major areas are
projected to have significantly higher old-
age dependency ratios in 2050.
The population implosion risks for Germany, Japan and Italy, as well as many
smaller developed countries, are significant. Together with increasing old-age
dependency ratios in all G7 countries raises many fundamental questions,
especially at a time of low growth and high debt.
• Can standards of living be sustained in societies where the labour force
shrinks in the wake of an aging population? How can this be achieved at
a time of unprecedented debt burdens?
• Is a debt-driven economic model sustainable in the long run in a zero-
growth economy?
• Can increased immigration and/or workforce expansion alleviate the
problems?
• How will industries adjust to fewer and older consumers with different
needs and demands?
• Will social security funding be sustainable?
• Can a new equilibrium between working and retired people be found?
These fundamental questions will impact where and how we work, shop and
live in the future, and the associated real estate needed to facilitate this.
Germany
0
5
10
15
20
25
30
35
40
45
France United Kingdom Italy
2015 1960
Age Dependency Ratio (%)
Japan United States Canada
AN AGING WORLD
Graph 3: Changes in Age Dependency 1960-2015 of G7 Economies
(elderly people as % of working population)
MARK ZOLTAN IVADY
Consultant, Strategic
Consulting, EMEA
Global Occupier Services
NEIL MCLOCKLIN
Co-head of Strategic
Consulting, EMEA
Global Occupier Services
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