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2004), “Time to Death and Health Expenditure: An Improved Model for the Impact of Demographic Change on Health Care Costs,” Age Ageing, 33(6), 556–61. , V. Skirbekk, and D. Philipov (2011), “Economic Recession and Fertility in the Developed World,” Population and Development Review, 37, 267–306. UN, Department of Economic and Social Affairs, Population Division (2013), World Population Prospects: The 2012 Revision (New York: United Nations). Vaupel, J. W. (2010), “Biodemography of Human Ageing,” Nature, 464(7288), 536–42.

What is less well understood, however, is that this is not just a North American/European phenomenon, but is now occurring in both Asia and Latin America, and even in some parts of Africa. It is also not well understood that the aging of populations arises not so much due to increased longevity, though that is an important influence, but more through falling fertility, and that as a result the twenty-first century is likely to see not a population explosion but a cessation of population growth altogether.

That would translate into an increase of about 10 per cent in labor income. Population aging may also be accompanied by an increase in human capital investment per worker. Population aging is mostly due to low fertility, and low fertility is associated with higher human capital investments per child as described in the quantity–quality theory (Becker and Lewis, 1973; Willis, 1973). In that theory, both fertility and investments in human capital may respond to rising incomes, but in opposite directions.

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