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The future of global ageing.

Humans have extended their average stay on earth dramatically in recent history, with life expectancy at birth rising by more than one-third in just the last four decades. Despite this success, there are growing concerns about the possible impact of ageing on living standards. As biologists raise doubts about the limits to human longevity, economists in demographically older countries worry about how to finance pension and health programmes. Not surprisingly, most of the ageing literature is produced in rich countries well into their own demographic transitions. Studies published in the US and Europe focus on topics such as maximum human life span or new applications of stochastic techniques to population projections. The research is motivated by a sense that existing public policies must be changed in order to successfully cope with the projected ageing of the population. While these topics are of great interest, most of the potential gains in average life expectancy are to be reaped in the poor, young countries of the developing world. Moreover, as argued below, convergence of long run ageing patterns is likely to be a natural by-product of policies that mitigate the pressure of ageing in rich countries. A positive approach to the ageing challenge calls for the integration of economies with staggered demographic transitions. Combined with national policies that remove subsidies for leisure relative to work, it should be possible for the world to age gracefully.