Aging population is a phenomenon that has caused concerns in developing countries in recent years. Predictions show that Iran is the third fastest aging country in the world after the United Arab Emirates and Bahrain.

The phenomenon of aging population is a result of improvements in living standards, health conditions, social and economic factors, reduction in mortality, increased life expectancy, and implementation of population control policies. Therefore, it should be considered as a success. Aging population used to only be a concern in developed countries a few years ago, but now it has become a reality in many developing countries due to the decrease in mortality rates and increase in life expectancy at birth. This change in the age structure of the population will have a profound impact on the economic and social dimensions of societies.

Population Age Structure Change Journey.

The population growth policies implemented in the 1970s resulted in an unprecedented increase in population. The proportion of the population under 15 years old sharply increased in 1975, making up nearly half of the country’s population. Predictions show that this population shock, which is currently in middle age, will move towards old age in the coming decades. As a result, the proportion of middle-aged population will increase until 2025 and then decrease, while the proportion of elderly population will continue to rise.

Mohammad Javad Mahmoudi, the head of the Committee for Population Policies of the Supreme Council of the Cultural Revolution, stated in a press conference in Khordad month of 1399 (May/June 2020) on the topic of population: “As the country moves forward, considering that its age structure is moving towards aging, the number of deaths will also naturally increase and births will naturally decrease. He mentioned that it is predicted that between the years 2031-2036, the country’s population growth rate will reach zero. He said: “When the country’s population growth rate reaches zero, according to the United Nations Population Division’s medium scenario, Iran’s population will be 95-96 million and in 1451, one third of this population may be over 60 years old.”

Furthermore, Mohammad Shariatmadari, the Minister of Cooperatives, Labor, and Social Welfare, stated in a press conference held in Mehr month of 1399 (2020), with the topic of the elderly in the country, that: the age range of 0 to 15 years has decreased in our society and hope for life has also decreased. This shows that our society is moving towards aging, although we do not welcome aging, but with aging, individuals must be able to maintain their growth and have favorable conditions during their elderly years. Therefore, it is necessary to create hope for the elderly so that they can spend their elderly years with vitality.

The elderly population is increasing.

5.

Percentage to.

10.

The estimated and predicted percentage is that the elderly population of the country will double in the year 2020, while in other countries it is increasing.

100.

There has been a growth in the elderly population this year..

The rate of population aging is increasing at a slow pace. Youthfulness is one of the main characteristics of developing countries and this indicator is decreasing in these countries. In the years between 1986-1996, we witnessed a rapid increase in the rate of population growth, which then slowed down with the policies of the governments at the time. Unfortunately, if this declining trend in population growth continues, it will be concerning for the country and will create serious risks such as the aging population, lack of new generations and young workforce.

Examples of Consequences of Population Aging.

If developing countries such as Iran do not limit their population growth rate, they will face a major problem of aging population and dangerous decline in population in the coming years, which will have a high cost for the country’s economy. However, an increase in population alone will bring many problems such as poverty and lack of social justice if it is not in line with economic growth.

The aging population has various effects on a country’s resources and social security expenses. The increase in the share of social security costs sometimes drives the government towards adjusting the tax rates on human resources. The aging population and consequently the decrease in the labor force supply have a negative impact on the economic growth of countries, which will result in a reduction in government tax revenues. This resource dilemma, coupled with a decrease in the government budget, puts pressure on the government’s financial resources to meet the needs of retired and elderly individuals, which will come from public financial resources.

The government has adopted a policy of increasing taxes on labor in order to increase public financial resources. This could lead to a decrease in the motivation of the workforce to enter the job market. Therefore, in order to reduce the negative effects of this phenomenon on the labor market, comprehensive packages of policies, including reforms related to social security and immigration policies, as well as taxes, are being considered simultaneously and in a concentrated manner.

Human resources are considered one of the fundamental factors in economic growth. If developing countries do not pay attention to it and lose their population growth, they will not be able to continue their economic growth. Developed countries compensate for the majority of their population and workforce deficit needed for economic growth through immigration, but developing countries, due to having less attraction for immigrants, must rely on their domestic workforce. Therefore, the declining trend in population growth will pose a major threat to them.

The first change is related to the decrease in workforce growth in the country’s economy, and the second change is related to the transformation in consumer spending structure as a result of the increase in the proportion of elderly individuals in the total population. The aging of the population will significantly change the share of certain sectors of the economy in the long term. For example, sectors such as healthcare and insurance industries will benefit greatly from the aging population in the coming decades. On the other hand, sectors such as construction and education will face a decrease in their share in gross domestic product and will be forced to reduce wages in the industrial sector.

With the increase in the elderly population in Iran, health and medical activities will play a significant role in the country’s gross domestic product. It should be noted that some experts recommend the use of technology to increase the efficiency of the workforce in dealing with this issue, which also has other consequences. However, the various solutions implemented to mitigate the effects of aging on the economy (such as changing the social security system, retirement, taxes, etc.) have various negative impacts on other economic sectors.

Continuation of the current trend and increase in social security costs will lead to an increase in taxes. The phenomenon of migration has also affected the aging population. However, on the other hand, immigration will lead to an increase in welfare in developed countries. However, migration not only results in a decrease in wages, but also increases the capital rent rate and the ratio of workforce to retirees, and reduces the need for tax revenues.

The labor market can be considered the most important area of elderly management in the country. The job market and its related changes should be seen as the most affected part of the economy by aging. The human capital of the country depends on the young workforce. Various policies should be implemented to create balance in this market.

One of the best policies is systematic and planned encouragement of labor migration to the interior. This policy not only leads to a decrease in wages, but also increases the rate of capital rent and the ratio of labor force to retirees, and will increase government tax revenues. The issue of Iranian human migration should be on the government’s agenda.

In terms of modernity and its strains such as individualism, sexual freedom, full-time employment especially for women, increasing costs of childcare and raising children due to consumerist policies of market economy, employment of mothers, and emergence of technologies for birth control, urbanization, etc. are factors that have generally led to a decrease in population in modern and semi-modern societies.

Currently, the government’s focus on solving the problem of aging population is on promoting childbirth. However, structural economic issues such as mismatch between capabilities and government directives, as well as societal attitudes towards marriage and childbirth, have posed challenges in achieving this goal. This requires serious reconsideration.

Sources.

1. Samiinesab, Mostafa and Torabi, Morteza, 1389 – Indicators and Population Policies in Iran, Quarterly Journal of Second Harvest.

Yavari, Kazem and colleagues, 1393 – A review of the economic effects of aging phenomenon.

3. Amir Sadri, Azita and Suleimani, Hamid. The phenomenon of aging in Iran and its consequences, monthly magazine of the Voice of the Islamic Republic of Iran.

“An aging population crisis for the near future of Iran, Mashregh News.”