The Social and Economic Impact of Living Longer
The Big Q: Would you do things differently if you expected to live a healthy, longer life?
The Big A: Likely your answer is Yes, and you would value your time, organize it differently because there would be more of it.
Most people think about what they aspire to do before or after “they get old”.
Yet only a few actually think about the age “old”, contemplate changes in the world at that time, and consider the influences of these changes in their plans to meet their needs and aspirations.
This thinking about the “old” process has various economic and social implications, affect government systems, influences how we live and plan our education and careers.
In this piece, Ahmed Sharawy shares his thoughts based on the evolution in life expectancy, the threats it poses and the opportunities it offers. He focuses on explaining the causes and consequences of risks and presenting Key enablers to mitigate threats and exploit opportunities.
According to data from the World Bank that was last updated in March of Y 2016, the life expectancy in the Middle East and North Africa (MENA) has been continuously increasing since Y 1960.
The rate of increase in life expectancy between Y’s 2003 and 2013 and its preceding 20 yrs were 2.01, 2.91 and 7.03 respectively. Considering the life expectancy in the MENA was 60.37 in Y 1983, these rates are significant. They mean that now babies are expected to live at least 19% longer than parents do. That is almost 12 years.
This fundamental change in the region’s demography will affect countries’ income statements the same way, but to different extents.
Looking after a very old population will prove costly, because governments will need to invest more in pensions, health and welfare. To secure that people will need to work longer and rewarded differently.
Most of people complete their education in the 1st 22 years of their lives, work for 40 years and retire at the age of 62. According to the statistics, governments invest in their development a little bit more than 33% of their lives contributing to its income for the remaining 67%.
If governments follow the same strategy, considering the region’s relatively significant rates of increase in life expectancy, then new babies will need to work for 48 years and retire at the age of 68. This will influence how they plan their lives, educations and careers, which will have various social implications.
Unlike our parents, most of us were willing to delay the transition from the education phase of our lives to the employment phase, i.e. hold no major responsibilities for many different reasons.
This development in attitude was due to ambitions to go through different life experiences such as pursuing post-graduate studies, and having limited expectations to meet these aspirations when we grow older.
Others developed their position based on the work construct that separates business and leisure. Hence, they did not want to commit themselves to the full 40 years.
Irrespective to the reasons, this attitude led to a delay in the average age of marriage and a decrease in the number of babies, who are expected to live longer than we do. Eventually, this will put pressure on governments to increase the age of retirement to 68, to compensate for the loss in income.
Based on this insight, it is useful to reconsider investment plans for our children in a way never done previously. So, now we invest in our children’s education and social activities to be competitive and live up to their social standard. These are intangible assets.
Additionally, we save money, invest in property, business and other tangible assets to sustain our intangible assets such as longer, healthier lives.
The finance of long life will require our babies to work longer, irrespective of the capital that we invest in intangible assets today which will add future value to our current investments in tangible assets.
In the nutshell, I not not suggesting to overrate tangible assets over intangible ones, but rather get a better education, continue to upgrade it, and work smarter than hard, means balancing the Key life elements with respect to our income and aspirations, and contemplated changes to and in the world and their impact on our future.
“Being busy in effective pursuit of your passion is one of the Keys to happiness.” — Connor Young
Eat healthy, Be healthy, Live lively