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The Actuary The magazine of the Institute & Faculty of Actuaries

Book review: The Age of Aging

George Magnus’ book is a tour through the demographic changes to hit the world over the past few decades, giving him the chance to describe the phenomenon in terms of an Age of Aging. The book opens with a useful but uneventful canter through the data revealing the change to population structures. Malthus’ dire warning of populations being checked by war, famine and disease did not come to pass, although it is difficult not to buy the suggestion that extinction of minerals and lack of new oil and water supplies are likely to provide us with equally critical challenges.

For those concerned with saving and investment, there are useful sections looking at the implications of the change for workforce behaviour. According to Magnus, the uncertainty of retirement lifestyle “should make working-age people want to save more, not less” but “the message has (not) hit home.” The low level of saving remains an issue of serious economic study, though; in addressing the implications of low interest rates, he describes these as “not good for pensioners living off savings”. It would have been better to link this to inflation, which, if equally depressed, simply means pensioners have to live a little off capital rather than solely off income.

Magnus takes a good look at emerging and developing nations, considering China on the one hand (developing, but its one-child policy means it is now rapidly ageing) and the rest on the other. The scandal of growing male child selection is predicted to give the Chinese and Indians a serious social issue with high surpluses of unwillingly single men in the 2020s and beyond. Russia has some wealth today but catastrophic population collapse from high mortality and a serious decline in babies. Africa might be a success if it grasped future opportunities as eagerly as the mobile phone, but Magnus is not hopeful.

A good chapter on immigration issues suggests that the capacity for migrants to raise larger families with their new-found wealth may be as significant as their addition to the labour market in their new home. Migrants won’t solve the entirety of the savings and pension challenges but may play their part in making them less of a crisis.

After a relatively high-level run-through of the challenges that fundamentalist religions pose, particularly for birth rates of neighbours of competing ideologies, Magnus ends by considering what he calls “boomerangst”, the worries of baby boomers about their health and income security in an approaching retirement. Like David Willetts says in his new book Pinch, the financial burden on their children may be quite as significant a worry.

Altogether, this was a good survey, if a little bit ambitious to cover so many societies and so many issues in one single book.