A New Look at an Old Problem

• For a long time, people have looked at ageing populations as a big problem. The thinking was simple: if fewer people are having children, and more people are living longer, then there’ll be too few workers to support everyone else. But the data is starting to tell a different story, one that’s more balanced, and in many ways, more encouraging.

• In many developed countries, people are working later in life, not because they have to, but because they’re healthier, living longer, and more able to stay active. Since 1980, both men and women in the OECD have added over four more years to the time they spend in retirement, but they’ve also delayed when they stop working. And this hasn’t come from big changes to pension laws. It’s happening naturally, helped by better health, more flexible jobs, and changing ideas about what older age means for work.

• This has real impact. Even though the share of people in the traditional working-age group has fallen since 2000, a bigger share of the total population is now in work. The average working life in richer economies has already increased by over 12 percent in the past 20 years. Instead of falling behind, many countries are adapting well, and faster than many had expected.

Aging Looks Different Everywhere

• At the same time, birth rates are falling across most of the world. In richer and middle-income countries, the drop has been especially sharp. Global fertility has gone from over 5 births per woman in the 1960s to just around 2 today. In places like South Korea and Italy, the number is now well below the level needed to replace the population.

• Still, the response hasn’t been the same everywhere. Some countries are seeing more women join the workforce, and more investment in childcare and flexible work. Others are falling behind. The key point here is that ageing doesn’t have a fixed outcome, it depends on how countries react. It’s not just about whether a country is young or old, but whether it’s putting the right systems in place to adjust.

• If we zoom out, we can also see that ageing isn’t just a rich-country phenomena anymore. In upper-middle-income countries like China or parts of Eastern Europe, the median age is rising quickly, sometimes even faster than in the West. This brings new challenges, like how to manage pensions and public services, but it also creates chances to design smarter policies for work, housing, and long-term care.

What This Means for the Economy

• All of this points to a reality that’s more nuanced than previous assumptions. Yes, populations are ageing, and the share of people in the traditional working-age bracket is declining. That’s often captured by the so-called working-age ratio, which compares the number of people aged 15 to 64 against the total population. A falling ratio can raise concerns about fewer workers supporting more retirees, which could drag down GDP per person.

• But that doesn’t mean the economy is headed for a slowdown by default. In fact, the share of people actually working has gone up, not down. This shift reflects longer, more flexible working lives, broader workforce participation, and the fact that people are staying healthier for longer.

• So, while the working-age ratio in developed countries has dipped from its peak, down from around 67% in the early 2000s to an expected 57% by 2075, that doesn’t translate into a one-for-one drop in employment. And that matters. It shows that labour markets are adapting, that assumptions baked into older growth models may no longer apply, and that there’s more room for optimism about future economic resilience.

Our View

• At Cordoba, we see demographic trends as an emerging macro risk, tied to a wider structural shift we’ve been exploring for some time, one where energy, nature, and people are all becoming harder to separate from long-term investing. We wrote about this in When Growth Hits a Wall, where we discussed how natural constraints are starting to show up in markets. Ageing fits into that same story, especially when it overlaps with things like labour shortages, healthcare pressures, and slow-moving policy.

• But we also see clear opportunities. We’re looking closely at markets that are finding ways to adapt, countries supporting people to work longer, or sectors building the kind of infrastructure that fits older populations. That includes job platforms, modular housing, and income products that are built to last longer.

• In the months ahead, we’ll be writing more about how these changes are starting to affect things like sovereign debt pricing, infrastructure planning, and the future shape of retirement. Countries that learn to make the most of longer lives, by keeping people active and supported, will be better placed to manage wider global shocks.

• Getting older isn’t the problem. It’s how we respond that matters. And we’re focused on tracking where that response is happening early, because that’s where we believe capital will be most effective.