Ageing and the economy: a literature review of political and policy mechanisms

Abstract

Population ageing, and the decline in the working-age population, represent a profound global demographic shift. What political consequences do ageing populations have for the economies of advanced democracies? To address this question, we carry out a wide-ranging, systematic literature review using network-based community detection algorithms and manual coding to select almost 150 articles. We find that research in this area typically focuses on a few mechanisms and is thereforeby designunable to identify gaps in existing knowledge or assess interactions between different strands of literature. Our review suggests that ageing has important implications for a variety of domains including electoral behaviour, social policy preferences, and public spending. Taken together, the political consequences of population ageing are likely to have previously overlooked and indirect impacts on economic outcomes. Future research should, therefore, examine how population ageing shapes political dynamics and policy choices in ways that also affect the economy.

The welfare state and support for environmental action in Europe

“…Thus, there are good reasons to expect lower social classes with more limited economic resources to be less likely to engage in environmentally-friendly behaviour (for example, buying organic food) and to support environmental policies, especially if they fear this will lead to cuts in much needed welfare benefits. In line with this literature, we hypothesize that members of the working class have fewer environmentally friendly behaviours and exhibit lower support for environmental policies.Hypothesis 1: The working class is less likely to support environmental actions .Second, with respect to the demographic cleavage, previous research finds the elderly have distinct policy preferences in general (for example, Vlandas et al, 2021) and are in particular less likely to support climate-friendly policies (see Andor et al, 2018; Poortinga et al, 2019). One reason is that their immediate economic needs are higher than their dependence on a future stable environment.…”

“…Thus, the distribution and level of insecurity also affects the distribution and level of popular support for environmental action. The resulting potential gap in support echoes a wider literature in political economy and political science, which documents how risks are unequally distributed between secure and insecure groups and how these risks in turn lead individuals to adopt distinct policy preferences (see Busemeyer and Garritzmann, 2017;Emmenegger et al, 2015;Vlandas, 2013aVlandas, , 2018Vlandas, , 2020Vlandas et al, 2021) and voting behaviour (for example, Bojar and Vlandas, 2021) which in turn shapes government policy responses (for example, Simoni and Vlandas 2020). In the rest of this section, we focus on two prominent political dividing lines in society: age and social class; and then theorize how these two social groups differ in their environmental actions and policy preferences.…”

“…Second, with respect to the demographic cleavage, previous research finds the elderly have distinct policy preferences in general (for example, Vlandas et al, 2021) and are in particular less likely to support climate-friendly policies (see Andor et al, 2018;Poortinga et al, 2019). One reason is that their immediate economic needs are higher than their dependence on a future stable environment.…”

Studying the politics of pension reforms and their social consequences

“…Political science has added to the political economy perspective by analysing the political dynamics of ageing electorates (Goerres & Vanhuysse, 2021;Vlandas et al, 2021). The most important influence has been the New Politics thesis (Pierson, 2001) in respect to reform dynamism, studying the obstacles to systemic reform and the path-dependent, gradual change of welfare states.…”

Demographic Changes in the Countries of the Western Balkans – A Comparative Analysis with the European Union

“…Regardless of the measure used, ageing impacts the economy and society in different ways, including pension systems, healthcare, the labour market, policy preferences, the welfare state and many other aspects (see, e.g. Iparraguirre 2019;Vlandas, McArthur, and Ganslmeier 2021;Razin and Schwemmer 2022).…”