The ageing of the world's population is usually presented as a problem for pensions, healthcare and labour supply. It is all of those things, but it also exposes a deeper weakness in one of the West's favourite demographic assumptions: that whenever domestic populations age and fertility falls, immigration can simply replenish the workforce. That may work for a while. It cannot work forever, because the countries supplying migrants are ageing too.

The scale of the shift is already dramatic. ZeroHedge, drawing on the U.S. Census Bureau's An Aging World: 2025, notes that the global share of people aged 65 and over is projected to rise from 10.5 per cent in 2025 to 19.6 per cent by 2060. Older adults have already overtaken children aged five and under globally, while Europe's over-65 share is projected to rise from 21 per cent to more than 30 per cent by 2060. Japan is already near 30 per cent, and South Korea is projected to exceed 40 per cent.

The important point is that this is no longer a peculiarity of rich Western countries. Population ageing is becoming global. The United Nations says virtually every country is experiencing growth in the number and proportion of older people. Sixty-three countries and territories had already reached peak population before 2024, including China, Germany, Japan and Russia, while world population itself is now expected to peak in the mid-2080s before beginning a gradual decline.

That changes the immigration argument fundamentally. For the past few decades, countries such as Australia, Canada, Britain and parts of Western Europe have often treated migration as a pressure-release valve. Birth rates fall, populations age, labour shortages emerge, so governments import younger workers. The Ponzi arithmetic can look attractive in the short term because migrants are often younger than the host population and can enlarge the working-age tax base.

The trouble is that migration does not abolish ageing. Migrants themselves grow old. Their fertility also tends over time to move toward the levels of the destination country. The OECD makes this point explicitly: immigration can help with labour shortages in the short to medium term, but very large inflows would be needed to offset ageing, those inflows would need to continue, and the fact that ageing is increasingly global limits the long-term capacity of migration to solve the problem.

The scale required is revealing. The OECD estimates that keeping the old-age dependency ratio across its member countries at roughly today's level would require annual net migration equivalent to around 2 per cent of the population, vastly above the historical OECD average of about 0.3 per cent. Even then, the policy would not permanently solve ageing because the migrants eventually enter the older age groups themselves.

That is the demographic version of running up a down escalator. Immigration can slow the movement, but unless fertility recovers or productivity rises strongly, the system requires ever larger or continuous inflows merely to maintain the same age structure. Each intake solves part of today's problem while adding to tomorrow's elderly population.

A younger migrant with useful skills can contribute enormously to a country, fill shortages, start businesses, pay taxes and enlarge the productive economy. The OECD is quite clear that migration can alleviate labour-market pressure where migrants' skills match genuine demand. The mistake lies in turning a useful policy instrument into a permanent demographic doctrine.

There is also a global fallacy involved. Immigration is not the creation of new human beings. It is the relocation of existing ones. If Germany recruits a nurse from the Philippines, Britain recruits a doctor from Nigeria and Australia recruits an engineer from India, the global supply of nurses, doctors and engineers has not increased. They have merely changed countries.

That becomes more important as sending countries themselves age. China is already ageing rapidly. South Korea's demographic trajectory is more extreme still. India's fertility has fallen sharply. Even many countries that remain relatively young today are moving in the same direction as mortality falls, education rises, urbanisation deepens and families become smaller. The United Nations now puts the global fertility rate at about 2.25 births per woman and expects it to fall to around replacement level by the late 2040s.

Africa remains the major demographic exception for now, but even there the picture is not one of permanent youth. ZeroHedge's summary of Census Bureau projections notes that by 2060 Africa could contain more older people in absolute numbers than Europe. That does not mean Africa will have become older than Europe proportionately, but it does illustrate the direction of travel: ageing eventually follows development almost everywhere.

Western governments therefore need to think beyond the next twenty years. The implicit model has often been that the developing world will remain an inexhaustible reservoir of young workers. Europe can age, East Asia can age, Australia can age, and younger people can simply be drawn from somewhere else. But where is "somewhere else" in 2060 or 2080 if fertility has fallen across most of the planet?

At that point the competition for migrants may itself become intense. Countries that presently export skilled workers may decide they need them at home. A Nigerian doctor or Indian engineer may become more valuable domestically as those societies become richer and older. Governments that have spent decades relying upon imported labour could then discover that the global demographic surplus they assumed would always exist has largely disappeared.

There is an ethical dimension here as well. Rich countries sometimes congratulate themselves for solving labour shortages by recruiting doctors, nurses and carers from poorer countries whose own health systems are already stretched. That may benefit the individual migrant, but it can also amount to transferring human capital from poorer societies to richer ageing ones. The OECD has warned that skilled emigration can deprive origin countries of precisely the human resources they need for their own development.

The old immigration-as-demographic-rescue model therefore contains a hidden contradiction. As the world ages, the West becomes more eager to import young workers at exactly the moment when those workers become more valuable to the countries from which they would come.

There is another problem that political rhetoric often ignores. The fiscal benefits of migration depend heavily upon who arrives, their age, employment rate, skills, earnings and use of public services. "More migrants" is not the same thing as "more productive taxpayers". Highly skilled workers entering employment quickly can improve fiscal balances; poorly matched migration can do far less. Demography cannot be reduced to headcount.

This is why countries such as Australia need a more serious population policy than simply alternating between panic about ageing and celebration of migration targets. The deeper variables are fertility, productivity, labour-force participation, retirement age, housing costs, family formation and the health of older workers.

If people remain healthier for longer, an ageing society need not mean an economically inactive society. ZeroHedge notes that labour-force participation among people over 65 has already risen in many high-income countries. That trend is likely to become increasingly important. The traditional model in which education occupies the first twenty years, work the next forty and retirement the final twenty or thirty may simply become financially unsustainable as longevity rises.

Productivity matters even more. A country does not become prosperous merely because it has a large working-age population. What matters is what those workers produce. Automation, robotics, artificial intelligence and better capital equipment could allow smaller workforces to support larger retired populations. The real demographic race may therefore be between the rising dependency ratio and the productivity gains made possible by technology.

Family formation is the harder question because governments have repeatedly discovered that fertility is difficult to manipulate. Housing affordability, job insecurity, delayed marriage, cultural preferences and the opportunity costs of children all matter. OECD work notes that policies aimed at lifting fertility have so far struggled to reverse the broader decline.

That does not mean governments should give up. It does mean that societies cannot simply buy their way out of demographic decline with a baby bonus or import their way out indefinitely with migration. The problem is structural.

For Australia, the temptation to rely on immigration is particularly strong because the policy has worked for decades. Population growth supports construction, consumption, university enrolments, taxation and headline GDP. The United Nations projects immigration to remain the main driver of population growth in Australia, Canada and several other countries by the middle of this century.

But a policy can work today and still contain the seeds of its own exhaustion. If fertility remains low and migrants age along with everyone else, each generation requires another intake behind it. Meanwhile the pool from which the intake is drawn is itself ageing.

The West therefore faces a choice between treating immigration as one component of demographic policy or pretending it is demographic policy. The first is sensible. The second merely postpones the reckoning.

A durable strategy would accept that older societies are coming and redesign institutions accordingly. That means lifting productivity, encouraging people who can and want to work later in life, making family formation less economically punishing, investing in automation and carefully selecting migrants where they genuinely strengthen the economy.

What it cannot mean is assuming that there will always be another younger country over the horizon willing to send millions of people into ageing Western societies. Demography does not provide an endless frontier. Eventually the frontier ages too.

That is the lesson hidden inside the new global ageing statistics. Immigration may buy time. It may ease shortages. It may improve the position of individual countries for decades. But it cannot repeal the ageing of humanity. Everyone grows old. Eventually, so does the migrant pool.

https://www.zerohedge.com/markets/global-population-aging-unprecedented-pace