Over the next several decades, it is projected that there will be an un­precedented aging of the population in all developed countries. During this demographic transition, the changing age structure of each of these countries will have macroeconomic consequences. If countries age at different rates, the returns to the factors of production in those countries may diverge. Where this occurs, international capital and labor flows might occur in order to take advantage of these differences. This could take the form of either immigration or international capital flows. Such flows have the potential to ameliorate the fiscal burden of an aging society. However, while the welfare gains from factor flows can be significant, they appear to be less effective at offsetting the welfare effects of an aging society than increasing the retirement age.