In its most recent World Economic Outlook report, the IMF includes a chapter on “The Rise of the Silver Economy: Global Implications of Population Aging” (April 2025).
Here are the big trends in a nutshell. The red line (measured on the right-hand axis) shows that the average age of the global poulation was about 27 years back in 1980, is now up to about 35 years ,and is headed above 40 years in a few decades. The blue line shows average annual population growth. From 1980 to the present, it fell from 1.8% to about 0.8%, and it’s headed toward negative population growth later this century.
Of cousre, this decline in population growth isn’t distributed equally. This figure shows the timing at which countries start to experience a decline in the “working-age” population, defined here as ages 15-64. As you can see, Germany, France, Italy, and Japan were already experiencing a declin in the working-age population before the year 2000. Since 2000, the US, Canada, China, Korea, and Brazil have joined the club. In the 2030s, India and Indonesia will start to experience a declining working-age population. By later in the century, the pattern is projected to reach countries across Africa, like Nigeria, Ethiopia, Kenya, Ghana, and others.
Does a decline in working-age population necessarily mean a corresponding decline in economic output? Maybe not. There will be more workers with greater experience. In addition, people seem to be maintaining their cognitive sharpness and physical health later in life, which is not only a good thing in and of itself, but also increases the chance that they will continue contributing to the economy as workers for a few years longer. The IMF rreport notes:
Alongside increases in longevity, the functional capacity of older individuals has improved over time. More recent cohorts of older individuals are physically stronger and cognitively abler than earlier cohorts at the same age. Notably, when cognitive capacities are the focus, “the 70s are the new 50s”: Data from a sample of 41 advanced and emerging market economies indicate that, on average, a person who was 70 in 2022 had the same cognitive ability as a 53-yearold in 2000. Over the course of a decade, this pace of improvement in cognitive abilities is associated with an increase of approximately 20 percentage points in the likelihood that individuals remain engaged in the labor market, either by working or actively seeking employment, along with an increase of about six hours in average weekly hours worked and a 30 percent rise in labor earnings, conditional on being employed.
Ultimately,the ability of economies to adjust to these demographic shifts will rely on a few variables: Is there at least a moderate upward trend in the number of people who continue working after age 65? Are people saving more, so that they will be ready for longer retirement? Will the skills of experienced older workers perhaps be an especially good complement with emerging AI tools, thus allowing them to maintain high productivity for longer? Are people planning for old age without too heavy a reliance on support from the smaller younger generations of their families? Is the private sector making the kind of investments in technology and physical capital that can raise the productivity of older workers? Will the public sector adjust old-age pensions to keep them solvent? Is a combination of the private and public sector making the kinds of investments so that homes, public spaces, and care facilities are available and accessible to an older population?
There’s an old line that “everybody talks about the weather, but nobody does anything about it.” One might say something similar about the monumental trend toward global aging. The IMF report sketches out a model of a future where various adjustments in labor force participation, technology, investment, and government policies helps smooth the transition to a “silver economy.” But in many countries, for many people, I suspect it will be a bumpy ride.
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