Kuwait’s small elderly population creates distinct economic profile
Kuwait, which has the Gulf’s second-lowest retirement age at 54, faces potential pension pressures as early retirements could raise costs to an estimated 3% of GDP by 2050, World Bank report shows.
• World Bank data underscore Kuwait’s unique position, with only 3%percent of its population aged 65 or above, placing it among the few countries that combine considerable economic wealth with a predominantly young demographic structure.
• Only 3% of Kuwait’s population is aged 65 and above, while 61% of citizens express satisfaction with healthcare services and just 24% are satisfied with the education system.
The World Bank has reported that the average effective retirement age in Kuwait is 54, with citizens expected to live about 29 more years after leaving the workforce. Kuwait and Bahrain record the second-lowest retirement ages in the region after Qatar, reflecting comparatively early retirement patterns. Analysts warn that this trend could add pressure to pension systems as life expectancy continues to rise, Al Rai newspaper reported.
In its report on human development in the Middle East and North Africa, titled “Embracing and Shaping Change: Human Development in the Evolving Middle East and North Africa,” the World Bank emphasized the need for reforms that extend working years to support financial sustainability.
The report also highlighted disparities in public satisfaction with services. Around 61 percent of Kuwaiti citizens expressed satisfaction with the healthcare system—the highest rate in the region—while satisfaction with the education system stood at just 24 percent. In comparison, countries such as Egypt and Algeria reported lower levels of healthcare satisfaction, underscoring the challenges faced across the region.
Area components
The World Bank highlighted in its latest report that while human capital remains the Middle East’s greatest asset and the primary driver of income growth, demographic and economic transformations are creating new pressures on people, livelihoods, and public finances.
By 2030, up to 10%percent of the populations in seven regional nations require long-term care services
The report noted that the region is undergoing the fastest demographic transition in the world. Life expectancy reached 74 years in 2023, yet the average effective retirement age remains only 54. Over the next 30 years, the proportion of people aged 65 and above within the working-age population is expected to increase 2.5 times. Without reforms, pension costs are projected to account for around three percent of GDP by 2050. In addition, by 2030, between three and ten percent of the population in seven regional countries will require long-term care services.
Extra effort
According to the World Bank, governments must take stronger steps to encourage older workers to remain in employment. Each additional year of work not only raises individual incomes and savings but also helps preserve retirement benefits and strengthens pension systems. Achieving this, the report argues, requires reform of social insurance programs alongside gradual implementation of active labor market policies to ease job transitions.
The experience of OECD countries offers a relevant example. Since the early 2000s, many of these economies have increased the working lifespan of their populations, mainly by raising the retirement age, which now averages 64. In comparison, the average effective retirement age in the Middle East and North Africa is 54, a significant gap given that workers in the region typically live another 27 years after retirement.
A distinguished category
World Bank data also point to Kuwait’s distinct demographic and economic situation. Currently, the proportion of people aged 65 and older in Kuwait does not exceed 3 percent of the total population. This places the country in a rare position: it combines considerable economic wealth with a relatively young society.
This pattern stands in contrast to most developed economies, such as Germany, France, the Netherlands, and Italy, where high income levels are often associated with a large elderly population. Experts caution, however, that Kuwait’s demographic advantage may not last. Over time, an aging population could create serious challenges for pension schemes and social welfare systems.
Elderly citizens could outnumber younger workers
The World Bank emphasized the importance of monitoring the elderly dependency ratio, which measures the population aged 65 and older relative to those of working age (15–64 years). In 1970, Kuwait’s ratio was extremely low, indicating a very limited number of elderly people compared to the working-age group. By 2020, the figure had risen slightly but remained modest compared to other countries. Projections for 2050, however, suggest a sharp increase, meaning elderly citizens could outnumber younger workers.
Such a shift would place heavy pressure on Kuwait’s pension, healthcare, and social welfare systems, particularly as the country currently enjoys a predominantly young demographic structure.
Kuwait records high labor market participation rates
At the same time, Kuwait records high labor market participation rates among those aged 15 and above compared with societies already experiencing advanced aging. The World Bank stressed that to transform these demographic advantages into economic growth, Kuwait and its neighbors must focus on raising overall employment, especially among women and youth. Many Middle Eastern countries continue to record lower employment rates than aging European nations.
Another challenge arises from reliance on migrant workers, who form the majority of the labor force in the Gulf. This dynamic reduces the benefits of earlier educational investments in citizens and limits the accumulation of human capital through work experience. High youth unemployment and low female participation remain central obstacles.
By 2024, Gulf Cooperation Council (GCC) states together hosted around 28 million migrant workers, including 10 million in Saudi Arabia, many from the Levant region. This trend underscores the need for reforms to strengthen domestic employment while still meeting labor market demands.
Kuwait spent 20% on human development
The World Bank also reviewed government spending on human development. In Kuwait, such spending reached about 20 percent of GDP during 2020–2023, up from around 15 percent in 2005–2009. While this reflects some progress, the figure remains below global averages for high-income countries. The report suggested that reallocation of resources will be needed to enhance investment in education, healthcare, and broader human capital development.
Reform agenda
Overall, the World Bank urged countries in the Middle East and North Africa to adopt a broad reform agenda aimed at updating human development policies, strengthening institutions, and bridging financial gaps. These measures are seen as vital to protecting and enhancing human capital in the face of three major megatrends: demographic change, climate change, and technological transformation.
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