The impact of population ageing on the economy of Sri Lanka

Abstract

Population ageing is the increase in the proportion of ?older people?, in the total population. Declining fertility and increasing longevity are resulting in ageing of population in both developed and developing countries. Successes in reproductive health and family planning programs and improvements in health care services (low fertility and low mortality) have contributed towards population ageing by enabling longer survival. Sri Lanka is a developing country and it shares the problems of ageing population with the more developed countries. According to the recent population projections, in Sri Lanka, the share of population over 60 years will rise from 13% in 2011 to 17% by 2021. In addition, Sri Lanka?s population is expected to start declining by 2031, indicating that the share of the elderly will rise even further. By 2051, the population over 60 years will be 29%. Population ageing would have profound implications on the economies as well as societies experiencing a rapid increase in the share of old aged in the total population. This study intends to focus economic impact of population ageing in Sri Lanka, mainly based on the literature and secondary data published nationally and internationally. Further, this study employed descriptive statistics for the analysis. The study reveals that the ageing population in Sri Lanka increases very rapidly in the near future and proportion of the elderly population in our country is higher than in other South Asian countries. Increasing ageing population significantly influence on public expenditure, in particular on the provision of pensions and health care in Sri Lanka. Also, the labour force in the country declining dramatically and it will reduce labour supply and productivity. Furthermore, this age group could have a considerable impact on capital market, public debt, savings and investment etc. in the near future.