The Age of the Population Affects Economic Growth
Financial analysts who study demography like popular author Harry Dent argue that one of the main drivers of a country's economic growth is the number of people in the country who are in their peak spending years.
For example, Dent says that in the U.S., 46-50 year olds are the biggest spenders, because that is when - on average - they are paying for their kids' college, paying mortgage on the biggest house they will own during their life, etc.
Dent argues that the American economy will tend to grow when the number of 46-50 year olds grows, and to shrink when it shrinks. Dent says this principle applies to all countries, although the peak spending years might vary slightly from country to country. For example, the peak Japanese spending range has been estimated to be comprised of 39-43 year olds.
Claus Vogt - editor of the first and largest-circulation contrarian investment letter in Europe - agrees. Vogt says that, all other things being equal - the country with the youngest population will experience the biggest growth in the future, as it will have a higher percentage of productive people in the future.
Whether or not Dent and Vogt are right, it is clear that countries with a large percentage of elderly people and a small proportion of productive workers will have less productive outpout and a larger demand for social services than those with a higher percentage of workers.
So which countries have the most favorable demographics for economic growth?
China has a young population:
As Reuters points out, China will have an aging population in the future, but not for some time:
China's working-age population will peak in 2015 and plunge by 23 percent by 2050.
Brazil has an even younger age demographic.
And India's is even younger than Brazil's.
Here are historical age demographics in the U.S.:
Future demographic trends for the U.S. are not good. .
Germany's population is even older.
The following charts from Science for Global Insight's World Population Program project give regional population demographics (if you click through to the original source and hold your mouse over the images to view the animation, it will show you projections through 2030):
 Region 1: NAF, North Africa |
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 Region 4: LAM, Latin America |
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 Region 6: MEA, Middle East |
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 Region 8: CPA, China & Centrally Planned Asia |
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 Region 10: PAO, Pacific OECD |
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 Region 12: EEU, Eastern Europe |
You can look up the age demographics for just about any country in the world.
Comments
Great data, nice analysis, and effective graphics, Alex. Thank you :)
As a teacher, writer, and lobbyist in economics, I'd like to point to a cutting-edge policy development that will affect economic growth in a breakthrough manner. The good news of our economic crisis is that more sharp minds are thinking outside the box of our bankrupt economic and monetary systems. The catch phrase of this breakthrough is "monetary reform."
Author Ellen Brown is the most widely-read on this topic, and the American Monetary Institute is the most recognized national organization. I also write on this topic and lobby at the state and national level. It's accurate to say that everyone in politics is now for monetary reform for a breakthrough in economic growth except the "leadership" of the two major parties. Ron Paul and Dennis Kucinich are leaders within the parties, and perhsps more leadereship is developing with more than half the House co-sponsoring Ron Paul's bill to audit the Fed.
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