Earlier this week, the Chinese government announced that it was doing away with the one-child policy.

Here’s a picture of how the decades of population control are expected to play out:

In basic math:

2 parents + 1 child = 1 adult child supporting 2 elderly parents

Add in some multiplication:

(2 parents + 1 child)*(reproductive population) + childless uncles + medical advances…

=

(1 adult child supporting 2 elderly parents, 4 grandparents, multiple elderly relatives)*(all future working adults)

It’s quite a burden to lay on a future generation.

But China is not alone. Here is Europe:

Have a look at those projected ratios. Come 2060, I’ll be in my mid-seventies. And if I lived in Latvia, there’d be about two thirds of a person of working age to pay the contributions that would cover my social welfare benefits and pension. And what’s worse – that’s just people of working age, NOT the labour force. So given Latvian labour force participation rates of around 60% at last count (see here), that would make the old-age dependency ratio on the labour force about 113%.

Here’s hoping that life in Africa, with our growing population rates and room for developmental growth, will be better for the elderly (because lest we forget, successful countries like South Korea were where we are just a few short decades ago – so we can hope).

Here are some infographics that are worth looking at:

The good news is: by 2050, Africa is expected to have the age-ratios that are still only half of what Europe and the States had a few years ago.

For more on this, and some of the potential issues that may come up, here’s a post that I wrote in April last year: The Crisis of Ageing Populations.

Otherwise – Happy Friday.

Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at www.facebook.com/rollingalpha. Or both.