ILLUSTRATION: SHUTTERSTOCK
FOR DECADES the story about ageing populations has been told as a warning. Fewer young workers, more retirees, ballooning pension bills, strained health systems. A growing body of research suggests this story has the sign backwards. Older people are not primarily a cost that economies must bear. Increasingly they are one of the largest engines of growth that rich economies have.
The numbers, where they exist, are startling. According to AARP’s Longevity Economy Outlook 2026, Americans aged 50 and older generated $12.5trn in economic activity in 2024—up from $8.3trn just six years earlier—accounting for 43% of America’s entire GDP. That activity indirectly supports an estimated 98m jobs across all age groups, which works out to some 46% of all American employment. The same cohort pays close to 60% of federal income tax. None of this counts the unpaid work older Americans do looking after grandchildren, ageing parents and each other, which AARP (a non-profit advocacy organisation focused on issues affecting older Americans) separately values at $1.2trn a year. Strip out the people over 50, in other words, and the American economy does not slow down. It collapses.
This is not a uniquely American phenomenon. AARP’s global research found that people over 50 contributed $45trn to world GDP in 2020, about a third of the total, and roughly three times the combined revenue of the planet’s hundred biggest companies that year.
The research firm World Data Lab now estimates that older adults account for 42% of all consumer spending worldwide, a share that keeps climbing as this generation arrives at retirement with more savings than any before it. China offers a particularly sharp illustration of where this is heading: its “silver economy”, the industries built around products and services for older consumers, is projected to roughly triple from $750bn in 2020 to $2.1trn by 2030, eventually reaching 10% of the entire Chinese economy.
What makes this a “dividend”, rather than just a big number, is that it depends on something specific: people staying healthier for longer. A 70-year-old in reasonably good health who can still work, travel, spend, volunteer and look after grandchildren contributes very differently to the economy than a 70-year-old confined by chronic illness. The health gains of the past few decades (better treatments for heart disease, earlier cancer detection and the slow decline of smoking in rich countries) have extended not just lifespan but “healthspan”, the years people spend in reasonably good condition. That extension is, in effect, where the dividend comes from. It shows up in spending on housing, since more people are able to age in their own homes rather than move into care. It shows up in leisure and travel, sectors AARP describes as enjoying a brisk comeback among the over-75s specifically. And it shows up in the labour market itself: America’s Bureau of Labour Statistics expects the fastest employment growth over the next decade to come from workers aged 75 and older.
There is a useful side effect to all this that economists call spillover. Products designed with older consumers in mind often turn out to work better for everyone. Nintendo redesigned its Wii game controller to be easier for children to hold, and the same redesign made it easier for elderly users too. BMW added better lumbar support to one of its cars to suit its largest customer segment, drivers over 50 and ended up improving comfort for every driver. Investment aimed at an ageing population has a habit of upgrading the products the rest of us use as well.
None of this happens automatically, and the AARP report is candid about the catch. Many older workers leave their jobs earlier than they would like, because of health problems, or caregiving burdens, or plain age discrimination. The dividend is conditional on policy and employers actually making longer working lives viable rather than just assuming nature will sort it out. The countries and companies that figure out how to keep people healthy, employed and spending well into their seventies and eighties stand to capture a genuinely enormous share of global growth over the next several decades. The ones that keep treating ageing as a problem to be managed, rather than an asset to be developed, will watch that growth happen somewhere else. ■
