Macroeconomic implications of population ageing and selected policy responses

Abstract

Between now and 2030, every country will experience population ageing—a trend that is both pronounced and historically unprecedented. Over the past six decades, countries of the world had experienced only a slight increase in the share of people aged 60 years and older, from 8% to 10%. But in the next four decades, this group is expected to rise to 22% of the total population—a jump from 800 million to 2 billion people. Evidence suggests that cohorts entering older age now are healthier than previous ones. However, progress has been very uneven, as indicated by the wide gaps in population health (measured by life expectancy) between the worst (Sierra Leone) and best (Japan) performing countries, now standing at a difference of 36 years for life expectancy at birth and 15 years for life expectancy at age 60 years. Population ageing poses challenges for countries’ economies, and the health of older populations is of concern. Older people have greater health and long-term care needs than younger people, leading to increased expenditure. They are also less likely to work if they are unhealthy, and could impose an economic burden on families and society. Like everyone else, older people need both physical and economic security, but the burden of providing these securities will be falling on a smaller portion of the population. Pension systems will be stressed and will need reassessment along with retirement policies. Health systems, which have not in the past been oriented toward the myriad health problems and long-term care needs of older people and have not sufficiently emphasised disease prevention, can respond in different ways to the new demographic reality and the associated changes in population health. Along with behavioural adaptations by individuals and businesses, the nature of such policy responses will establish whether population ageing will lead to major macroeconomic difficulties.

Ageing well: a review of sarcopenia and frailty

“…For example, in the UK 60 % of people admitted to hospital are ⩾65 years old despite this age-group only comprising 17 % of the total UK population (3) . This disproportionate use of healthcare services by older people not only demonstrates the significant economic implications of an ageing population (4) , but also the morbidity experienced by many older people, reducing quality of life. However, it is not inevitable that Proceedings of the Nutrition Society older age will be synonymous with poor health (5) and the challenge now is to stay healthy in later life.…”

Meeting the Escalating Demands for Health and Social Care Services of Elderly Populations in Developing Countries: A Strategic Perspective

“…Some commentators try to imply that there is a direct link between population ageing and levels of health expenditure (Bloom et al, 2014). While this may or may not be true in developed countries it is argued, in this paper, that, in developing countries, there can be no direct link between growing needs for health and social care services (consequent on population ageing) and actual expenditure on such services, since these factors are derived in different ways which will be discussed further below.…”

Economic convergence in ageing Europe

“…Further research may focus on disentangling the effects of labour force participation and labour productivity. While labour force participation usually decreases with age (Bloom et al, 2015;Lee and Mason, 2011), and thus ageing of the working age population has a negative impact on total labour force participation, the effect on productivity is more complex. Some researchers find evidence in support of the human capital theory, showing a positive effect of labor force ageing on GDP through the growth in productivity (de la Croix and Monfort, 2000;Futagami and Nakajima, 2001;Gómez and De Cos, 2008;Malmberg, 1999, 2009;Rauhut, 2012).…”