Population ageing is primarily the result of past declines in fertility, which produced a decades-long period in which the ratio of dependents to working-age adults was reduced. Rising old-age dependency in many countries represents the inevitable passing of this ‘demographic dividend’. Societies use three methods to transfer resources to people in dependent age groups: government, family, and personal saving. In developed countries, families are predominant in supporting children, while government is the main source of support for the elderly. The most important means by which ageing will affect aggregate output is the distortion from taxes to fund public pensions.