With people living longer than ever and the baby-boomer generation reaching retirement age, some people worry that we will run short of workers and taxpayers. Media reports and political discourse about population ageing or reduced population growth often adopt a tone of panic. Mitigating ageing is the main justification for successive governments’ policies of high population growth.

Is this concern justified? In a wide reaching review of data and literature, this discussion paper untangles the facts from the myths.

Key points:

• Demographic ageing will stop well before we run out of workers and taxpayers. Retirees will never outnumber younger adults.
• In the countries that have aged the most, there has been no decline in workforce. Instead of less employment, they have less unemployment and underemployment. False assumptions, in conflict with both economic theory and evidence, have led economic models to predict less economic activity as populations age.
• The rise in the proportion of older citizens accounts for only a small fraction of the rise in health costs. The major increase in costs is due to new, improved and more services per person.
• Longevity has deferred, rather than extended, the period in which the elderly need more health care and aged care.
• High levels of immigration can slow, but not prevent, population ageing. But the cost of extra infrastructure and education to sustain population growth is greater than the avoided costs of pensions, health care and aged care.
• Those with vested interests in population growth have overstated ageing concerns, to make high immigration seem essential. The resulting negative social and environmental impacts continue to accumulate for no net economic gain.
• Far from being an economic calamity, our demographic maturity offers many advantages for improving social and environmental outcomes.