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Archive for 22 abril 2021

Have a look at those two demographic pyramids:

From 1950 to 2019 there has been a clear change in the European demographic structure. Low birth rates combined with higher life expectancy have transformed a pyramid into a barrel. Why we keep calling it “pyramid” is beyond my comprehension.

Enough has been said about the challenges and pressure put on the fiscal structure due to the demographic evolution.

The other side of the coin is the many possibilities opened by the natural ageing of the baby-boomer generation that made up the base of the pyramid of the 1950s. That generation, today in their 50s and older, is probably the generation with the best education and   economic resources  to “come of age” in the last 100 years. It is made up of the sons and daughters of the welfare state, with compulsory schooling and guaranteed pensions.

In the past month, two papers worth reading have come to my attention. One is focused on the United States, “The Longevity Economic Outlook”. The second focuses on Spain, “Los senior en España”.

The common denominator of both papers is how important for the economy and society it is to integrate and profit from the vitality of the 50 plus generations. As an example, that section of the population contributes 40% to the GDP of the United States and represents 44% of the work force.

As for Spain, where 39% of the population is 51 years old and older (see INE), the most striking feature, in contrast with tradition, is their answer in the survey about plans for their heirs. Over 60% responds that their children’s inheritance is their education. Add to that an average income of 1,500€ per month for almost 80% of them and you will get a generation with a propensity to consume well above the level of previous generations.

In short, once the pandemic is over, society has to make room for a generation of old people that does not feel old and that is ready to consume and be an active part of society for much longer than their forefathers.

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