"Aging is a reflection of the success of the process of human development, as it is the result of lower mortality (combined with reduced fertility) and longer longevity," said the U.N. Department of Economic and Social Affairs' "World Economic and Social Survey 2007" released Tuesday.

"Aging provides new opportunities, associated with the active participation of older generations in both the economy and society at large," the 180-page report said. "In those countries, primarily in the developing world, that still have a growing youth bulge, there is a window of opportunity for economic development."

The report analyzes the challenges and opportunities associated with aging populations and aims to further the Madrid International Plan of Action on Aging, adopted at the Second World Assembly on aging in April 2002.

"As mortality and fertility have fallen, the age distribution has been shifting gradually to older ages," the report said. "All regions of the world are experiencing this change."

Life expectancy rose globally from 47 years in 1950-1955 to 65 years in 2000-2005 and is expected to reach 75 years in 2045-2050. In the period from 1950-1955 to 2000-2005, total fertility fell from 5.0 to 2.6 children per woman, and it is expected to continue falling to reach 2.0 children per woman in 2045-2050.

The transition to an aging population is in three stages: First, the proportion of children rises because of increased survival at younger ages. In the second, owing to fertility reductions, there is the beginning of a decline in the proportion of children accompanied by a rise in the proportions of adults of working age. Third, usually after lengthy periods of fertility and mortality decline, the proportions of both children and adults of working age decline and only the proportion of older persons rises.

"During the third stage, the rapid aging of the population may pose particular challenges for public policy, as major adjustments in a variety of spheres are required to cope with a declining labor force and an increasing demand for health care and old-age support," the report said.

"A substantial degree of population aging is expected over the next few decades in all regions of the world," it said. "Ideally, policy responses should be put in place ahead of time to ease adaptation to these long-term demographic changes."

Ensuring the growing numbers of older persons have adequate support during old age, access to decent employment should they need or wish to remain economically active and appropriate healthcare is likely to prove challenging, said the report.

As older persons continue to grow in numbers, so does their voice.

"Population aging could become a drag on economic growth unless the decline in labor-force growth can be arrested or greater efforts are made to increase labor productivity," it said.

For instance, all other things being equal, to offset the negative impact of a smaller labor force, Japan would have to ensure a labor productivity growth of 2.6 percent per year in order to sustain a per capita income growth of 2 percent annually during the next 50 years. More than 80 percent of the required labor productivity growth would be needed to overcome the growth impact of population aging.

The same holds, though to a lesser degree, for other countries with aging populations like Italy and Germany, and also for the United States. However, the required productivity growth in all these cases seems within reach by historical standards.

"To offset the increase in the old-age dependency ratio, the European Union would require a steady net inflow of 13 million immigrants per year in the next 50 years, while Japan and the United States would each have to absorb 10 million migrants per year," the survey said.

The report suggests the greatest potential for counteracting the projected changes in labor-force growth lies in raising the participation rates of women and older workers.

"Indeed, many countries still possess considerable scope for enacting measures aiming at increasing the participation rate of older workers -- typically those aged 55-64 -- by bringing the effective retirement age more closely in line with the statutory retirement age.

"There are also a range of options with respect to removing disincentives to prolonged employment, such as altering workplace practices to better accommodate the needs of workers as they age; improving working conditions to sustain working capacity over the life course; countering age-based discrimination, and promoting positive images of older workers," the report said. "Older workers will also be in a better position to extend their working lives if they are given the opportunity to engage in lifelong learning and on-the-job training initiatives."

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