Is Coronavirus the end to Ageing Populations?

The fear of Coronavirus has been escalated around the world with numbers increasing in influential World Cities such as London. With concerns that the mortality rate is 3.4%, is the threat seen to be equally distributed across the population or could this cause a significant shift in population structures?

The elderly are most at risk

Flus and colds often affect the ‘most vulnerable in society’ which typically includes infants, elderly and those with complicated medical problems. Unlike other viruses that the global population have been exposed to, Coronavirus is significantly affecting the elderly. As seen in the table below, infants are not seeming to be affected with currently no deaths for under 10s globally. Whilst those who are 80+ years old are extremely at risk, with 22% of those confirmed succumbed to the disease.

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When reviewing the death rate across countries China and Italy have the highest. Whilst China’s data may be skewed, as naturally it is the epicentre of a disease and as a result will have a higher death rate, before being able to identify the cause and implement the appropriate emergency measures required.

What is an Ageing population?

Countries that have had the most significant impact are those that have ageing populations, China and Italy. Characteristics of an ageing population is a country with a high proportion of elderly (i.e. Italy has 23% of its population with an age of 80 or over) and a low birth rate. Fertility rates (average number of children per woman) need to be a 2.1 for a country to replace itself without needing international migration. Both countries have extremely low fertility rate; Italy (1.3 births per woman 2020) and China has recently increased to 1.7 (after 20 years at 1.6).

Why do China and Italy have ageing populations?

As countries develop death rates decrease as life expectancy increases due to improvements in quality of life and medical practises. As infant mortality rate decreases people choose to have less children, reducing the birth rate. This results in an population structure which is top heavy, more elderly in proportion to the young and economically active.

In the case of China, the change in birth rate was not a result of quality of life but policy. China’s One Child Policy has led to 2-3 generations of only 1 child being born, leading to a massive decline in birth rate. Even though the One Child Policy has recently (2016) been transformed to a Two Child Policy, the country stills a has low fertility rate.

Whilst Italy’s ageing population is due to 1) a low birth rate (fertility rate is 1.3), and 2) a high life expectancy. The Mediterranean lifestyle leads to better quality of life and higher life expectancy due to warm climates, healthy balanced diet and society with relatively low stress. As a result Italy has one of the largest proportions of elderly populations in Europe.

What could this mean for countries with an ageing population?

China current is estimated to have 26.2 million citizens over 80. If the current mortality rates run true and all citizens were able to contract the disease, we could expect that an estimated 3.93 million octogenarians could be killed by the disease (15% for over 80s). Italy would see a further 2 million die from the same age bracket.

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Demographic Transition Model (DTM) shows how population structures change over time as birth rate and death rate change. Currently the population pyramids of both China and Italy are ageing populations, stage 5 of the DTM. The DTM does not have a stage 6- could Coronavirus lead to a new population structure to be known as stage 6.

China

The legacy of the One Child Policy is expected to lead to 150 million people over the age of 80 by the end of the century. Ageing populations require significant investment, as the complexity of their medical needs can be expensive, in addition to funding the staff for assisted living to support those with degenerative diseases. The money from this primarily comes from taxing the economically active. Significantly elderly people are unlikely to be economically active. Ageing populations need more investment and have a relatively small workforce to tax. As a result ageing populations can expect to see them needing to work longer with their pension ages increasing. From this point of view, some may argue that Covid-19 could be beneficial for an ageing population struggling to meet it’s elderly’s needs.

Economic Factors

The elderly typically fulfil the volunteer roles in society (women aged 65-74 are the modal group of UK volunteers) that allow for community run organisations and charities to function whilst benefiting from their years of experience working. In countries like Italy, grandparents often play an essential role in the raising of children, from the school run to meal times, allowing for parents to have more time to dedicate to their work and developing the country’s economy.

If a high proportion of the already large elderly population in China and Italy are to contract COVID-19, there are likely to be significant economic impacts. The ‘grey pound’, alternatively known as the ‘grey dollar’, supports the running of leisure facilities such as museums, art galleries, and cafes. In Italy, bars and cafes in small towns are often full of the local pensioners- with the threat of losing their main customer base, will these businesses and the cafe culture survive? Given that consumers over 50 have a higher disposable income, concern is that a high mortality rate in this group could be detrimental to the wider economy.

The UK businesses that serve the elderly could be even more concerned of the impacts of Coronavirus as those aged 70-74 have a disposable income 66% above national income. The hotel and tourism industries are already suffering from reduced business including from panicked travellers who would rather stay safe at home than risk exposing themselves to the virus. However, if mortality rates for over 50s is at the higher end of the expected range (3-15%), we could see a slow recovery for the tourism industry even after COVID-19 has settled and travel returns to normal as the industry’s largest spenders are those over 50.

Last Thoughts

Coronavirus has not run its course and the impacts on societies and the economies of ageing populations are yet to reveal themselves- only time will tell.

For now- Keep Washing Your Hands !!