Happy 70th, baby-boomer – but it’s the young who need the gifts

This is the year the world turns 30. The world has been very young for a long time. The middle person in the global population has been in their twenties since 1950, when reliable records began, but the figure is on a steady upward trend and this year the world’s median age will probably go through 30. It is projected to rise to 38 by 2050.

In the West, youthfulness was driven by a baby boom after the Second World War. Then the same happened in Asia. These big birth cohorts work their way through a society like a pig swallowed by a python. They create enormous strains as they do so, but opportunities too.

The surge in the number of young people is disruptive — it fed the protests and the counterculture of the 1960s in the US and the UK. If you can absorb these baby-boomers into productive work, your society enjoys a surge in growth — the demographic dividend that has transformed China. But if a labour market is sclerotic and jobs are all in the public sector, with access by patronage, then instead a surge in young people produces the anger of the Arab Spring.

There is a demographic sweet spot when you have lots of productive adults with not many pensioners ahead of them and fewer children behind. Having a small number of dependants relative to people of working age helps governments to hold down public spending and enjoy rising prosperity. The world’s dependency ratio has been falling since the 1970s, with baby-boomers coming to adulthood. But now they are ageing, and 2017 is the turning point when the world’s dependency ratio starts rising again.

To make sense of what will happen in 2017, we need to understand these big demographic trends playing out around us.

China brought down its birth rate exceptionally fast with the one-child policy introduced in 1979. That has meant its demographic sweet spot has been very sweet indeed, with exceptional numbers of workers relative to old and young. Deng Xiaoping’s opening-up meant it put its baby boom to good use and has transformed its economy. But now it faces very rapid ageing indeed: the price you pay for an exceptional concentration of workers is dramatic ageing of your population later, with much fewer young workers behind them. That is why the question was always whether China would grow old before it grew rich. Even since the abandoning of the one-child policy in 2015, there has been little sign of a birth surge: its birth rate is about 1.5 children per woman, well below the replacement rate.

By contrast America has kept a surprisingly high birth rate for a mature western economy. Together with substantial immigration, this has kept its population growing. The median ages of the US and China are both around 38 and will cross over very soon: it could happen this year. Then China will be the older country, worrying about stability, and America will be younger and brasher. You might recognise that trend already.

Within five years India will overtake China as the world’s most populous country and then move far ahead, making it even more important that the prime minister, Narendra Modi, modernises India’s economy and gets its young people working.

In my book The Pinch I argued that the big generation of baby-boomers had to discharge our obligations to the younger generation coming on behind. We haven’t done very well in Britain, with young people struggling to get on the housing ladder and shut out from decent pension schemes. In America this challenge has been exacerbated by ethnic gaps between the generations. There are states with affluent, property-owning older whites who do not want to pay taxes to fund the education of younger Hispanics. This is storing up massive problems, because America will soon be more than 50% non-white.

Of the world’s 7bn people, roughly 4bn are in Asia, a billion are in the Americas, a billion are in Europe and the Middle East and a billion are in Africa. Africa is the one remaining continent that has not yet gone through its demographic transition, when mortality rates fall and then birth rates. It has been described more crudely: first we stop dying like flies and then we stop breeding like rabbits.

Birth rates in many African countries are still high, so the number of children and young people is surging. That is why in 2050 the world’s third most populous country after India and China will be Nigeria — just ahead of the US. Other countries such as Kenya, Uganda and Ethiopia are going through similar birth surges.

In 1950, Europe’s population was three times sub-Saharan Africa’s; by 2050 it will be the other way round. The big question is whether African countries will seize the opportunity to transform their economies or whether they will break under the burden. That would mean even greater numbers of young men crossing the Sahara and the Mediterranean to try to reach Europe.

What does it mean for us in Britain? Our baby boom started soon after the war, so for us 2017 will be the year of the 70th birthday. More of us will turn 70 than ever before. In many ways it will be a celebration of lives well lived in a tolerant and successful society. The challenge for us baby-boomers is to do everything we can to ensure the same future for our children and grandchildren.

If we want decent social care as we grow old, we need to consider how we can help the younger generations to receive the training and housing they need. We should remember that wise American bumper sticker: be nice to your kids — they choose your nursing home.

This article was originally published in the Sunday Times