You do need to care for the elderly, but you also need to care for young people. Schools, kindergartens, universities and so forth cost a lot as well. As long as the life expectancy and fertility rate are stable, the population ends up with a stable dependency ratio. A below replacement fertility rate, just means that the population ends up shrinking.
As for funding the welfare state, the problem is GDP per capita. As long as that is stable in real terms, the problem becomes distributing the wealth. There are actually some good things in terms of GDP per capita with a shrinking population. Namely we still inherit the assets from previous generations. We can choose to the best housing, factories, infrastructure and so forth. Not only that, but we still have innovation, so a lot of our economies are still growing.
For Germany for example current UN predictions are at 30% of the population being retired starting around 2035 and until pretty much the end of the century. Currently it is 23%, so the impact is happening today. That is about what Japan has right now.
You do need to care for the elderly, but you also need to care for young people. Schools, kindergartens, universities and so forth cost a lot as well. As long as the life expectancy and fertility rate are stable, the population ends up with a stable dependency ratio. A below replacement fertility rate, just means that the population ends up shrinking.
As for funding the welfare state, the problem is GDP per capita. As long as that is stable in real terms, the problem becomes distributing the wealth. There are actually some good things in terms of GDP per capita with a shrinking population. Namely we still inherit the assets from previous generations. We can choose to the best housing, factories, infrastructure and so forth. Not only that, but we still have innovation, so a lot of our economies are still growing.
For Germany for example current UN predictions are at 30% of the population being retired starting around 2035 and until pretty much the end of the century. Currently it is 23%, so the impact is happening today. That is about what Japan has right now.