It’s too commonly pointed out that people are “ageing” in First World nations, and it’s often younger Third World nations which have a fresh stock of young labour available.
It’s pretty obvious that the stock of human capital is greater in an old person, who possesses more years of experience. His knowledge substitutes for additional labour and allows him to produce more and earn more as an individual. In turn, his increased productivity and the increased earnings he brings allows more jobs to be created, and thus we can see another example of how capital makes a difference in human society.
Perhaps ageing populations are an alarming sign of eventual fall in population and fall of birth rates below replacement level, but ageing populations are observed just as much in densely populated areas like Japan and South Korea, as they are in areas of depopulation like Ukraine, Russia, and Baltic nations. No more are younger nations necessarilly the ones with population rising at a high rate, as can be seen from scantily populated Middle Eastern nations or depopulating African nations.
But the relation between higher median age and higher per capita incomes is definitely more visible. The oldest nation in the world, Japan, is at a per capita income of $40,000. An almost equivalent level is observed in Germany and Italy, which are exactly behind it on the list of oldest nations. Micronations of Luxembourg and Leichtenstein, which are on the list of richest nations by per capita income, are also in the top 20 of the oldest nations in the world.
But it makes me curious: does an older or more experienced in age population bring development? Or is it development which eventually brings in an older population? Someone on another forum was arguing to me that he felt family in America is dying out, because capital-intensive service sector jobs pay more to senior staff and younger staff are years before they can earn enough to support a family. It’s a vague conjecture, but do you believe it?
This issue was created by government, exacerbated by government and not is hopefully destroying government and a great deal of productive society with it. This mess is the product of government redistribution to older citizens on one hand (In the cases of Japan, the USA, Canada, EU the recipients are wealthier than those losing the money) and government management of immigration on the other end. There is now a mess in all the western countries over this as there is an entire section of the population robbed through empty promises and inflation that for so long that they could not save for themselves. So they are depending on this awful system and completely invested in it. On the other side, government micromanagement of immigration has created ghettos and left millions of people without legal status and on the fringes of the work force.
The solution is quite easy and nearly impossible. That is to scale back government. But as mentioned the vast group of older citizens can not handle this and the lower classes in society will be harmed by competition from foreigners. So on we go with people living longer and depending more and more on the state for their subsistence.
It has been often been observed that as a society becomes wealthier birth rates tend to drop. The most stunning example is Iran: though not as wealthy as “First World” countries it has enjoyed steady economic growth ever since 1979 and even more so after 1988. Result: the birth rate per woman is now a quarter of what was when Rezha Pahlavi fled the country. As birth rate drop close to or even below 2,2 children per woman the country the average age starts to skyrocket. Countries like Italy and Japan, with birth rates well below 2 children per woman, are excellent examples.
There are a number of causes for this and frankly I cannot think of one more important than the others. The first is the excellent level of healthcare available in most of the world and much better nutrition raising life expectancy drastically. The second is the fact that women in industrialized countries tend to have many less children and much later in life and is a well known fact that the female fertility rate plummets once you pass the 35 mark. The third is the sheer cost of raising a child in an industrialized nation: even in areas with “cradle to the grave” welfare systems the costs are simply prohibitive, especially for young couples with low incomes. The fourth is yet another economic factor: young people entering the labor market are often paid wages little above subsistence levels and often require an economical support, be it from their parents or the State. There are others but these are the main reasons.
So in my opinion the high average age of many First World Nations is not the cause of their wealth but a by-product of many factors.