Demographics & Markets

Demographics, GDP Growth & Capital Markets

How Demographics Affect GDP Growth Around the World

As the average age of a workforce rises, its productivity growth rate inevitably declines—and this is one of the key factors affecting economic growth. This interactive tool enables you to follow the path of projected GDP growth in 22 countries.

http://www.researchaffiliates.com/Multimedia%20library/Tableau_Overlay_GDP-Growth.jpg

Aging by Countries & Regions

Population Distribution By Country

Using data from the United Nations, this interactive tool shows the evolving demographic profile of populations by country, region or sub-region, and level of economic development. In each case, the populations you select are stratified by age groups ranging from 0−4 to 70+ over the period from 1950 to 2050.

http://www.researchaffiliates.com/Multimedia%20library/Tableau_Overlay_Pop-Distribution.jpg

Comparing Shifting Demographics: Country by Country

Demographic profiles are dynamic but predictable. This interactive tool allows you to compare the distribution of any two countries’ age groups at yearly points in time from 1950 to 2100.

http://www.researchaffiliates.com/Multimedia%20library/Tableau_Overlay_Shifting-Demos.jpg

Support Ratios

Life Expectancy at Age 65

How long the average citizen in a given country lives after retiring has public policy as well as economic and investment implications. Populations as well as individuals may be exposed to longevity risk (the risk of outliving their financial resources).

http://www.researchaffiliates.com/Multimedia%20library/Tableau_Overlay_Life-Expectancy.jpg

Support Ratios and Changing Retirement Ages

Because countries cannot alter their demographic trajectory overnight, the tolerable support ratio and the normal retirement age are key policy questions. Experiment by seeing the prospective impact of different minimum support ratios (3:1, 4:1, or 5:1) on required retirement ages in the country or region you specify.

http://www.researchaffiliates.com/Multimedia%20library/Tableau_Overlay_Retirement-Age.jpg

Carrying the Weight: Global view of Support Ratios

The support ratio—the number of workers per retiree—changes as the distribution of age groups evolves in a country or region. This graph shows the past or projected support ratio in whichever country and year you choose. The lower panel shows how the selected country’s support ratio changes over time.

http://www.researchaffiliates.com/Multimedia%20library/Tableau_Overlay_Support-Ratios.jpg

Deepen Your Understanding

What Are We Doing to Our Young Investors?With the growing use of target date funds, young workers’ defined contribution (DC) portfolios are increasingly concentrated in stocks. But in a recession many young workers cash out their DC assets to meet living expenses. A potential solution: less risky starter portfolios.

Rob Arnott on The Glidepath Illusion​Rob Arnott explains why target-date funds fail to either maximize wealth or minimize uncertainty about future income.
Not-So-Great Expectations: Why Real Interest Rates Won’t SoarIt’s the consensus: Interest rates are set to fly. But if, as we expect, savings accelerate and real GDP grows slowly, then interest rates won’t rise very much anytime soon.