The percentage of the population that is 65 years or older is rising in all OECD countries and is expected to continue doing so. The number of inactive elderly as a ratio of the number in the total labour force is also increasing throughout OECD countries. These trends have a number of implications for government and private spending on pensions and health care and, more generally, for economic growth and welfare.
Population is defined as the resident population, i.e. all persons, regardless of citizenship, who have a permanent place of residence in the country. The labour force is defined according to the ILO Guidelines and consists of those in employment plus persons who are available for work and who are actively seeking employment. Population projections are taken from national sources where these are available, but for some countries they are based on Eurostat and UN projections.
Almost all OECD countries now follow the ILO Guidelines for defining the labour force, so there is good comparability between countries.
All population projections require assumptions about future trends in life expectancy, fertility rates and migration. Often, a range of projections is produced using different assumptions about these future trends. The estimates shown here correspond to the median or central variant.
The labour force projections start from the population projections described above but then require additional assumptions about the future labour force participation rates of men and women in different age groups. For the projections shown here, particular care has been taken in modeling future trends in the labour force participation of women and of elderly persons.
The youngest populations (low shares of population aged 65 or over) are either in countries with high birth rates such as Mexico, Iceland and Turkey or in countries with high immigration, such as Australia, Canada and New Zealand. All these countries will, however, experience significant ageing over the next 50 years.
The dependency ratio (i.e. the ratio of inactive elderly to the total labour force, right panel of the table) is projected to be above 50% in Finland, Italy and Japan by 2020. This means that, for each elderly inactive person, there will be fewer than two persons in the labour force. The lowest dependency ratios by 2020, under 30%, are projected for Iceland, Mexico and Turkey.
All countries will experience a further sharp increase in the dependency ratio over the period 2020 to 2050.