Mervat Zakaria‏‏

Despite policies that the Iranian authorities have been pursuing for some time to address the country’s adverse demographic trends, these measures so far have borne little fruit. This is largely due to the economic crisis that has plagued Iran for years and which has been exacerbated by Western sanctions, in addition to a range of structural constraints affecting the Iranian economy.The adverse demographic shifts affecting Iran include a slowdown in population growth, a rapidly aging population, and declining fertility rates. The intensity of these trends varies from province to province, reflecting significant geographical disparities in patterns of demographic change. These developments could have direct economic implications, affecting the size and composition of the labor force, savings and investment rates, and the pressures placed on social welfare systems and public spending. Taken together, they could further exacerbate the structural challenges facing the Iranian economy.An Aging SocietyThe main indicators of Iran’s adverse demographic shifts include the following:1. A Slowdown in Population Growth: According to a report published by <a href="https://www.khabaronline.ir/news/2228578/%D8%B1%DA%A9%D9%88%D8%B1%D8%AF-%D8%AA%D8%A7%D8%B1%DB%8C%D8%AE%DB%8C-%DA%A9%D8%A7%D9%87%D8%B4-%D8%AC%D9%85%D8%B9%DB%8C%D8%AA-%D8%A7%D8%B2-%DB%B2-%D9%85%DB%8C%D9%84%DB%8C%D9%88%D9%86-%D8%AA%D9%88%D9%84%D8%AF-%D8%AF%D8%B1-%D8%AF%D9%87%D9%87-%DB%B6%DB%B0-%D8%AA%D8%A7-%DB%B8%DB%B9%DB%B2-%D9%87%D8%B2%D8%A7%D8%B1" rel="noopener noreferrer" target="_blank">Khabar Online</a> on June 4, 2026, Iran has recorded a historic decline in the number of births, from approximately two million in the 1960s to just 892,000 during the Iranian year 1404, which ran from March 21, 2025, to March 20, 2026. The report identified declining marriage rates, the rising age of family formation, worsening economic problems, the housing crisis, and uncertainty about the future as the main factors contributing to slower population growth in Iran.2. A Rapidly Aging Population: On July 14, 2026, Majid Fouladian, head of the Secretariat of Iran’s National Council for the Elderly, announced that <a href="https://fararu.com/fa/news/986546/%D9%BE%DB%8C%D8%B4-%D8%A8%DB%8C%D9%86%DB%8C-%D8%AA%DA%A9%D8%A7%D9%86-%D8%AF%D9%87%D9%86%D8%AF%D9%87-%D8%A7%D8%B2-%D9%BE%DB%8C%D8%B1-%D8%B4%D8%AF%D9%86-%DB%8C%DA%A9-%D8%B3%D9%88%D9%85-%D8%AC%D9%85%D8%B9%DB%8C%D8%AA-%D8%A7%DB%8C%D8%B1%D8%A7%D9%86" rel="noopener noreferrer" target="_blank">Iran's population</a> was aging at an accelerating rate, noting that people over the age of 60 currently account for approximately 12% of the population. This trend raises growing concerns about the implications of Iran’s transition from a relatively young population to an aging society, particularly as its population is aging at one of the fastest rates globally.In this context, Fouladian projected that the share of people aged 60 and above would rise to approximately 31% by 2050, equivalent to nearly 29 million people. He added that while this demographic shift reflects the success of the healthcare system in increasing life expectancy, inadequate planning could result in significant economic, social, and health-related consequences.3. Declining Fertility Rates: A report published by the <a href="https://www.tasnimnews.ir/fa/news/1405/03/17/3610210/%D9%86%D8%B1%D8%AE-%D8%A8%D8%A7%D8%B1%D9%88%D8%B1%DB%8C-%D8%AF%D8%B1-%D8%A7%DB%8C%D8%B1%D8%A7%D9%86-%D8%A8%D9%87-%D8%B2%DB%8C%D8%B1-1-5-%D8%B1%D8%B3%DB%8C%D8%AF" rel="noopener noreferrer" target="_blank">Tasnim News Agency</a> on June 7, 2026 indicated that Iran’s fertility rate had fallen below 1.5 children per woman, compared with approximately six to seven children per woman in previous decades. The fertility rate refers to the average number of children a woman has during her reproductive years, typically between the ages of 15 and 49.The report identified declining marriage rates and a rising average age at marriage as key factors contributing to lower fertility. Even when the country’s population was relatively small, Iran previously recorded between 800,000 and one million marriages annually. That figure has now fallen to approximately 400,000 per year.4. The Approaching Closure of the "Demographic Window": A report by <a href="https://donya-e-eqtesad.com/%D8%A8%D8%AE%D8%B4-%D8%B3%DB%8C%D8%A7%D8%B3%D8%AA-%DA%AF%D8%B0%D8%A7%D8%B1%DB%8C-100/4274837-%D8%BA%D8%B1%D9%88%D8%A8-%D9%BE%D9%86%D8%AC%D8%B1%D9%87-%D8%B7%D9%84%D8%A7%DB%8C%DB%8C-%D8%AC%D9%85%D8%B9%DB%8C%D8%AA" rel="noopener noreferrer" target="_blank">Donya-e-Eqtesad</a> on June 7, 2026 indicated that Iran is approaching the end of its "demographic window" amid a sharp decline in fertility and birth rates. In development and political economy literature, the "demographic window" refers to when the working-age population accounts for the largest share of the total population, while the proportion of children and older people remains relatively low.From the perspective of political economy, this phase represents a historic opportunity to accelerate the accumulation of human and physical capital. A higher share of working-age people relative to dependents can boost savings and investment and support higher rates of economic growth.Currently, approximately 70% of Iran’s population is between the ages of 15 and 64, an unprecedented level in the country’s history that gives Iran its largest-ever working-age population. However, continued economic challenges, combined with declining birth rates and slower population growth, are likely to result in a significant decline in this share over the next two decades, reducing Iran’s ability to capitalize on the opportunity provided by its demographic window.5. The Out-Migration of Skilled and Young Iranians: According to the latest survey by the <a href="https://civilica.com/note/16830/" rel="noopener noreferrer" target="_blank">Iran Migration Observatory</a>, published in 2024, approximately 110,000 Iranian professionals had emigrated abroad, indicating an unprecedented rise in the outflow of skilled workers. This group includes students, university graduates, faculty members, technical specialists, and other professionals who have left Iran in search of better educational, research, or economic opportunities.Compared with previous years, these figures indicate that the emigration of skilled Iranians has accelerated in recent years. This could negatively affect the specialized labor market, the Iranian economy’s capacity for innovation, and the accumulation of human capital, while also weakening its ability to achieve sustainable growth.Negative RepercussionsIran’s accelerating demographic shifts could lead to several adverse economic consequences, most notably the following:1. Lower Production and Slower Economic Growth: Declining population growth, the approaching end of the demographic window, and the rapid aging of the population could directly reduce the number of young workers entering Iran’s labor market, particularly amid rising levels of youth out-migration.Against the backdrop of deteriorating economic conditions that have affected the country since the 1979 Iranian Revolution, largely as a result of Western economic sanctions, these pressures could persist in the coming period due to escalating tensions between Tehran and Washington. This could contribute to lower national savings and reduced fixed-capital formation, constraining the economy’s ability to expand production.These trends are therefore likely to contribute to the growth of Iran’s "<a href="https://www.isna.ir/news/1405021005678/%D8%AE%D8%B7%D8%B1-%D9%88%D8%B1%D9%88%D8%AF-%D8%A8%D9%87-%D8%A8%D8%AD%D8%B1%D8%A7%D9%86-%D8%B3%D8%A7%D9%84%D9%85%D9%86%D8%AF%DB%8C-%D8%AF%D8%B1-%D8%B5%D9%88%D8%B1%D8%AA-%D8%AA%D8%B9%D9%84%D9%84-%D8%AF%D8%B1-%D8%A7%D8%B5%D9%84%D8%A7%D8%AD%D8%A7%D8%AA-%DA%86%D8%B1%D8%A7-%D8%A8%D9%87-%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF" rel="noopener noreferrer" target="_blank">silver economy</a>" in the coming decades. This concept contrasts with the "golden economy," which is based on employing younger citizens in productive activities that contribute to economic growth. The silver economy, by contrast, is associated with a growing need to provide employment opportunities and economic services suited to older people. Separately, a report by Iran’s Islamic Republic of Iran Broadcasting <a href="https://www.irib-news.ir/fa/news/5814021/%DA%A9%D8%A7%D9%87%D8%B4-%D8%B1%D8%B4%D8%AF-%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%DB%8C-%D8%A7%D8%B2-%D9%BE%DB%8C%D8%A7%D9%85%D8%AF%D9%87%D8%A7%DB%8C-%D9%BE%DB%8C%D8%B1%DB%8C-%D8%AC%D9%85%D8%B9%DB%8C%D8%AA-%D8%AF%D8%B1-%DA%A9%D8%B4%D9%88%D8%B1" rel="noopener noreferrer" target="_blank">News Agency</a> on June 3, 2026 indicated that the country’s current demographic shifts would result in slower economic growth and higher labor costs.In response, several policies have been proposed to mitigate the expected slowdown in economic growth amid declining production and an aging population. These include raising the retirement age to enable people to remain in the labor market for longer, introducing measures to encourage savings and wealth accumulation, and establishing effective financial systems to manage the assets of older people.2. Growing Social Care Requirements: One of the most significant challenges arising from Iran’s current demographic trends—particularly the declining birth rate and a growing elderly population—is the growing burden of chronic diseases and healthcare costs. A substantial increase in the number of older people will increase demand for medical services, rehabilitation, and home care, placing additional pressure on the healthcare system.In this context, Ahmad Delbari, an adviser to Iran’s State Welfare Organization, stressed the importance of shifting the healthcare system from an approach focused solely on treatment toward one that emphasizes prevention, maintaining functional capacity, and providing comprehensive care for older people.Achieving this transition, however, presents significant challenges given Iran’s limited infrastructure for elderly care. <a href="https://www.khabaronline.ir/news/2184431/%D8%AF%D9%87%D9%87-%D8%B4%D8%B5%D8%AA%DB%8C-%D9%87%D8%A7-%D8%AF%D8%B1-%D8%B1%D8%A7%D9%87-%D8%B3%D8%A7%D9%84%D9%85%D9%86%D8%AF%DB%8C-%D8%A2%DB%8C%D8%A7-%DA%A9%D8%B4%D9%88%D8%B1-%D8%A2%D9%85%D8%A7%D8%AF%D9%87-%D8%A7%D8%B3%D8%AA-%DB%8C%DA%A9-%D8%AA%D8%AE%D8%AA-%D8%A8%D8%B1%D8%A7%DB%8C" rel="noopener noreferrer" target="_blank">A Khabar Online</a> report published on February 19, 2026 indicated that there was only one care bed for every 650 older adults. It also noted that Iran would need 2,500 geriatric specialists to meet international standards, while the current number remains far below that figure. In addition, more than 70% of older people in the country lack supplementary insurance, which could otherwise help them maintain better health and social conditions.3. Exacerbating the Pension Fund Crisis: A growing elderly population could place increased strain on Iran’s pension funds. Major challenges for the country’s social welfare system include financial imbalances caused by an early retirement system that has widened the gap between pension fund revenues and expenditures; the accumulated debts owed to these funds by successive governments; and rising rates of disability and mortality as a result of the country’s wars.A study published in the Iranian Journal of <a href="https://www.isna.ir/news/1405030401824/%D8%B3%D8%A7%D9%84%D9%85%D9%86%D8%AF%D8%B4%D8%AF%D9%86-%D8%A7%DB%8C%D8%B1%D8%A7%D9%86-%D9%88-%D8%A2%D8%B2%D9%85%D9%88%D9%86-%D8%AF%D8%B4%D9%88%D8%A7%D8%B1-%D8%B5%D9%86%D8%AF%D9%88%D9%82-%D9%87%D8%A7%DB%8C-%D8%A8%D8%A7%D8%B2%D9%86%D8%B4%D8%B3%D8%AA%DA%AF%DB%8C" rel="noopener noreferrer" target="_blank">Official Statistics Studies</a> on May 25, 2026 found that although Iran’s total population is projected to grow by 12% by 2036, the number of people aged 60 and above will more than double, accounting for nearly 17% of the total population. Provinces such as Gilan, Mazandaran, and Markazi, which have higher shares of elderly residents, are therefore expected to face greater financial pressures on their pension systems. By contrast, younger provinces such as Sistan and Baluchestan will have more time to address pension-related challenges. The study suggests that applying uniform policies nationwide without accounting for demographic differences among provinces could further exacerbate the pension fund crisis.In conclusion, Iran’s demographic shifts are expected to become an increasingly important factor in the structural constraints facing the Iranian economy over the coming decades. These changes could have direct implications for the country’s domestic stability, particularly as Iran continues to face multiple internal and external crises and pressures.

The Expected Implications of Iran’s Demographic Shifts