The Third Demographic Dividend and the Global Challenge of Longer Lives

Are there stages when certain social institutions or other policies need to be implemented in order to optimize the benefits of an aging population for all ages?
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We are entering a new age: a world of longer lives. In 30 years, the developed world has done the unimagined: added 30 years to human life expectancy. In a mere 40 years, the developing world is now accomplishing what took the West and Japan 100 years to do.

These 30 additional years represent a new stage of life and an exciting global prospect -- one that requires nations to do what they can to ensure that these longer lives are lived healthy. If they do, they will unleash benefits for individuals, families, and communities of all ages. To reap these gains over the long term, nations must invest in health at every age and stage of life.

In addition to greater life expectancy, age-related global change is taking shape all over the planet. There is the developing country "youth bulge," where youth 15-24 years of age comprise more than 20 percent of the population. Many of these countries will experience simultaneously an "elder bulge," doubling or tripling the number of older adults over the next 10-50 years. If these countries are worried, it's because they are at risk of failing to create opportunities when a large emerging workforce, one that is well-educated and prepared to be productive, can become the economic engine for prosperity. This potential "demographic dividend," a term coined by David Bloom, must not be squandered.

In many countries the older adults are the best educated, healthiest, and wealthiest in the history of the world. That's an asset to be embraced -- a trust fund that all generations can draw upon to their mutual benefit. Older generations already provide enormous value to society through many family and community roles; in the United States, volunteering and informal care-giving by older adults contributes the equivalent of $162 billion per year. That's a tidy sum, calculated even before we total up the gains from the social institutions we'll create to deploy this new social capital.

Yet those benefits can be amplified further to enrich all generations. The key is promoting health so that older people can engage and health care costs are minimized. Designing institutions that can do both simultaneously can be a 21st-century win-win.

One great example of this is Experience Corps, a program that I designed more than 20 years ago and brought into being with my colleague Marc Freedman. Now part of AARP, it operates in 23 U.S. cities and several other countries. Experience Corps harnesses the social capital of older adults to meet critical societal needs for our future: they volunteer in schools to support the academic success of children. Experience Corps is simultaneously an evidence-based health promotion program for those older adults. Through this carefully designed public health intervention, participating older adults become healthier, while participating children perform better in school.

Consistent with this approach, we've seen that, as people get older, they develop attributes that offer new assets to society: a lifetime of knowledge and expertise; deep connections to community and resources; the patience and ability to solve complex problems; a desire to make a difference and leave the world better than they found it. That evidence underscores the range of roles that could be supported by new social institutions benefiting all. This could happen en masse with the right social institutions, public health expertise, and policy will. It could take place in-person, online, in country, or across countries, in national service, volunteer, and paid work roles.

A key consideration is timing. Are there stages when certain social institutions or other policies need to be implemented in order to optimize the benefits of an aging population for all ages?

Yes. Demographically, we can predict the stages when a society transitions from young to aging, and it is worth looking at them sequentially to understand how to maximize demographic dividends.

All countries begin in a stage where fertility -- the number of children a woman conceives -- is high, and mortality is high. Let's call this situation, status quo in many developing countries, Stage 0.

Stage 1 is next, the first demographic dividend. In Stage 1 countries, death in childbirth and childhood has declined -- primarily as a result of public health measures, education, and poverty alleviation -- and the size of the working-age population has grown. If adequate health, education, and employment exist alongside policies to support further job growth, countries enjoy substantial increases in per capita income and government tax revenues. During this stage, a country has significant potential for investment in the education and health of the younger generation, increasing their wealth and productivity. Many developing countries are now in Stage 1.

Based on the experiences of the already-developed nations, it's crucial that basic social protection mechanisms for vulnerable groups, including older adults, be initiated in this stage, even while society invests in education and workforce training for the young. The combination of increased earning power and pensions for their parents ensures that working-age people experience a heightened standard of living, protected even when parents become ill.

In Stage 2, the second demographic dividend, increased public health initiatives and improved medical care mean that people live longer. In some Stage 2 countries, the rate of population aging is enhanced by concurrent declines in fertility. If there are increased savings and greater accumulated wealth in the prior stage, and if they persist with population aging, a nation's wealth can be secured in an enduring way. In this context, it's important to note that all generations do better when older people receive pensions and are healthier. Developed nations are well into Stage 2, and most countries in the world now are experiencing increased life expectancy and are beginning to have a greater proportion of older people.

With that in mind, let's move now to creating a new Stage 3, a third demographic dividend, in which we build policies that invest in the potential of increased numbers of older adults in an aging society to help secure a future for all ages. A core principal of this third demographic dividend is that we should not squander talents and capabilities of any group, and that building for intergenerational synergies and cohesion will strengthen each generation as well as the nation that builds them. This includes creating roles that improve the launching of the younger generations, in ways that older adults would find meaningful and impactful and that could significantly amplify the ability of youth - our future - to thrive.

In Stage 3 countries, a multitude of crucial roles could be undertaken by older adults, including helping young people succeed - from birth to mentoring young people into employment; public health approaches to create health for all, and protecting the environment. There is evidence that young people even perform better when older people are involved and invested in their success, and intergenerational teams at work or in the community are more productive. Designing for what I suggest could be this third demographic dividend would create a new kind of social equation of "both and" rather than "either or."

A demographic triumph in Stage 3 means investing in the old to help the young -- and our whole society -- to succeed, and designing institutions that create roles, responsibilities, meaning and purpose for older age. It will also require investing in health and disease prevention across the whole life course, so that people are healthier in old age and able to remain engaged. Through these approaches, we will create the pathways to help young people be healthier and more productive for the long haul -- and we will be designing for a new stage of life we have created, but never lived before.

Achieving the third demographic dividend should be a model for the world. It represents an annuity that every child could hope to inherit, and a legacy every older adult might like to leave.

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