The economics of population ageing

The role of the national health systems is to provide health for their citizens but each country achieves it up to a different degree. The health systems are heterogeneous not only in their efficiency but in their funding, organization and management too. As it is difficult to measure their efficiency in absolute terms, the countries can be compared with each other. The relative efficiency of health systems can be measured by the life expectancy that they provide by taking education level and their funding structure into account. Based on data coming from the HMD, GGS, OECD and WHO, data envelopment analysis is used to explore the relative efficiencies of the countries.

This paper examines the relationship between the cost of raising children up to self-supporting ages and the number of children parents have, by drawing upon computed results derived from NTA projects in Japan, South Korea, and Taiwan. The paper is unique in that examines the role of the economic support ratio in this relationship.
Our results indicate that the two variables in question have a negative association in the three economies, with the calculated elasticity of −1.01 implying that a decrease in the total fertility rate (TFR) leads essentially to no change in the total cost of childrearing per adult. As regards the per capita child human-capital cost and the TFR, the calculated elasticity amounts to −1.64, suggesting that in these economies the health and education components of per capita child cost are more closely linked to fertility change than other components.
The paper also addresses the question of a trade-off between the relative costs of children and elderly persons from the standpoint of generational equity, as economists often hypothesize that population aging should lead to a decline in the welfare of children relative to the elderly. However, no “crowding out” effect between children and the elderly has been found in the three economies.

Abstract: Title: Ageing in Mauritius experienced a rapid demographic transition in the 1960’s, resulting in an ageing population. Options for Mauritius 1. Adopt a pro-population strategy to achieve higher working age population 2. Reduce pensions to the aged to lower the “burden” of the Ageing population 3. Introduce measures for continued employment of 60+ in the formal and non formal sectors and keep the ‘Aged Productive’ or “Cost Efficient”. The Study will provide (i) financial/other details of the ageing issue up to 2050; (ii) obtain public opinion on the ageing issue, and (iii) alternates based on survey and desk study. Based on the 1960 population explosion experience, private associations should be roped in for solving the Ageing issue. Such a study could be the first in Africa. The project will include a survey and a detailed desk study on the items included in each of the options. Some data are already available. Option 1 and 2 are untenable on environmental and social justice grounds. Option 3 is environmentally sustainable and could be socially acceptable. The challenge - Extend the productive/efficiency status of the 60 + population

Age-related cognitive decline combined with demographic changes represents a social, economic, and health-related challenge. Extending schooling and improving the quality of education can be one important policy response for reducing the incidence of poor cognitive function among seniors. This study gives a global comparison of the impact of education on cognition, using standardized cognitive measures from representative surveys of individuals aged 50+. Data are from aging surveys conducted in mid 2000s covering more than 20 countries of Asia, America, Africa, and Europe.
Using a multilevel approach to identify the influence of individual education as well as the influence of national-level education, we find a positive education-cognition relation for all countries, in spite of their very different characteristics with respect to demography, educational distribution, selection into schooling, and level of economic and social development. We also find that an increase in the national education level not only increases an individual's level of education but also has an additional positive effect on his/her cognition.
Education is significantly positively associated with cognition across all countries. Raising the level and quality of education could represent a potential mechanism for improving cognition at older ages.

Using 66th round of consumption expenditure data, National Sample Survey, 2009-10, this paper tests the hypothesis that the monthly per capita household health spending is significantly higher among elderly households compared to non-elderly households. The households are classified into three mutually exclusive groups; households with only elderly members (elderly households), households with elderly and non-elderly members and households without any elderly member. The health spending include the institutional (hospitalization) and non-institutional health expenditure of the household, standardized for 30 days. Descriptive statistics and two part model are used to understand the differentials of health expenditure across households. Results indicate that the monthly per capita health spending of elderly households is 3.8 times higher than non-elderly households. Health spending accounts 13 percentage of consumption expenditure of elderly households, 7% among households with elderly and non-elderly members and 5% among non-elderly households. Controlling for social, economic and demographic correlates, the per-capita household health spending among elderly households was significantly higher than non-elderly households. The health expenditure is catastrophic for poorer households, casual laborer and households with elderly m

China is experiencing rapid population ageing with the proportion of the population aged 65 and above projected to increase almost threefold between 2010 and 2050. The growth of the working age population is expected to stop approximately in 2015 and to turn strongly negative. China’s low retirement age compounds the ageing problem. One means to mitigate the negative effects of shrinking labour force on economic growth is to stimulate labour force participation among the current working age population. Raising the official retirement age is one strategy to encourage labour force participation.

This paper first investigates the effects of population ageing on labour force participation rates and, thus, on labour supply over the period of 2010-2030. It then estimates the effects of retirement age extension schemes on the size of the labour force. Thirdly, applying dynamic computable general equilibrium (CGE) modelling, it examines the effects of retirement age extension schemes on China’s economic growth. It finds that raising the retirement age increases effective labour input, real GDP, capital stock, household real consumption and exports. The main results are that retirement age extension is likely to boost China’s economic growth and that the urban sectors will benefit more than the rural sectors.

The paper tries to understand the dynamics of health of the elderly and their labour force participation in India. The data from the National Sample Survey, 60th round is used. The health of the elderly is assessed through the information on disease pattern, disability and information of treatment seeking behavior and hospitalization. Bi-variate and multi-variate analysis are employed to understand the nexus between health status and work force participation of elderly in India. A regional level analysis will also be carried out to the phenomenon in detail. The study shows that nearly one-third of elderly is in labour force (LF), LF participation is higher among the rural, male and STs. Economic status is inversely related to the LF participation. A higher LF participation is seen in the North-Eastern region followed by central region. The health status of elderly shows a higher prevalence of morbidity, poor perception of their own health and a higher disability among them. Elderly who did not report illness during the last 15 days reported higher LF participation, similarly those who had a better self perceived health were higher in the LF and disability was also found to be a major constraint in participating in the LF.

This paper is concerned with the potential impact of an ageing population on the UK economy. The UK is going though a very rapid period of population growth from around 55.9m in 1980 to a projected 71m by 2030. Over the same period the structure of the population will alter significantly with the population aged 65+, doubling from 8m in 1980 to 16m by 2030. A major reason for this is that people are living much longer but the paper shows that increases in life expectancy (LE) are not being matched by increases in health life expectancy (HLE) or working life expectancy (WLE). A widening gap between HLE and LE implies a larger proportion of the population will rely on social security benefits and demand more health care; a widening gap between WLE and LE implies that taxes will have to rise to pay for pensions and welfare unless productivity keeps pace. The paper presents a simplified economic model of these effects based on three scenarios: a continuation of present trends (passive scenario), worsening health related to increases in the prevalence of chronic disease, and improving health (called the active ageing scenario). It concludes that improvements in LE need to be balanced by gains in WLE and HLE; failure to do so could increase migration pressures to bolster the work force, increasing the population still further and pote

Elderly mortality has steadily declined in Scotland since the 1960s despite the persistence of large area differences and a life expectancy that remains below many other Western countries. Population aging will intensify in Scotland as fertility levels are set to remain below replacement level, while old-age mortality will continue to decline. By contrast, the speed of senescence will continue to slow down as older people become more active and health conscious, delaying the onset of chronic disease and reducing mortality. Population aging will therefore have substantial consequences both for individual wellbeing and society (incl. the sustainability of pension, health and care systems). However, to assess these consequences a better understanding of the relationship between individual and population aging is needed since the expansion of the older population will go together with changes in its composition and characteristics.
This study takes a sociodemographic approach to assess the challenges and opportunities of aging populations in different contexts by using data from the Scottish Longitudinal Survey. New aging indicators will be constructed for NHS Board Areas, measuring the elderly population based on years of “remaining” life expectancy. Estimates will also be made for social groups, marital and health status.

According to the 2001 Census, individuals from Black and Minority Ethnic (BME) groups comprised about 10% of the total UK population, while the younger age structure of the BME population means that BME groups comprise less than 4% of the population aged 50 and over. Research has emphasised the health and socio-economic disadvantage experienced by BME groups, as well as the key policy challenge associated with the ageing of the BME population, and with their pension protection. More than half of Pakistani and Bangladeshi older people, half of Indian older people and about one-third of Black Caribbean older people, are in the bottom-fifth of the income distribution, while pensioners from these groups are more likely to rely on means-tested benefits. This paper analyses data from the first wave of Understanding Society, a UK-wide representative survey, in order to explore patterns of state pension receipt and the determinants of membership in an occupational pension scheme among older people aged 65 and over in five groups: Bangladeshi, Indian, Pakistani, Caribbean and African. The paper revisits existing research exploring the interaction of ethnicity and gender to the detriment of pension protection for both women and men from the Bangladeshi and Pakistani communities.