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Some reactions to the presentation by Emily Grundy

Some reactions to the presentation by Emily Grundy. By Ronald C. SCHOENMAECKERS. Colloquium Ron LESTHAEGHE 15-16 Feb 2007.

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Some reactions to the presentation by Emily Grundy

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  1. Some reactions to the presentation by Emily Grundy By Ronald C. SCHOENMAECKERS Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  2. Italy’s low birth rate: commentary by Will Hutton, The Observer, 26.9.2004“No advanced country in modern times has ever experienced such a calamity, a contemporary version of a medieval plague” • A very good paper/ presentation (as we are used from Emily) • But let me start with one negative point, i.e. the somehow (suggested) link between ‘population ageing’ and ‘low fertility’ • a common issue that one find in many papers (and press articles) dealing with ‘ageing’ Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  3. In her paper Emily writes: “It is clear that the concept of the second demographic transition is intertwined with the debates about population ageing […] • Unfortunately, the ‘fathers’ of the second demographic transition (DvdK & RL, 1986) have not paid much attention to the changes in mortality, i.e. the increase in life expectancy. • The reason is of course that their starting point were the changing values and behaviour that eventually resulted in postponed childbearing and (very) low fertility. • On the other hand, the fact that increased life expectancy was not incorporated as the ‘second pillar’ of the second DT was perhaps a ‘missed opportunity’. • After all, during the last 100 years or so, life expectancy has been increasing at the pace of about 3 months per year (6 months every 25 years). Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  4. In fact, the point that I am trying to make is that it should be clear that not low fertility but increased life expectancy is the main ‘motor’ of ‘population ageing’, i.e. ‘responsible’ for the increased proportions of older people. • Let me illustrate this with results from a simulation exercise. • The results pertain to the situation of the member states of the former EU15. • The simulation consisted of projecting the population of 1950 until 2100 in two ways: • By only changing life expectancy as observed/ expected; • By changing both life expectancy and fertility as observed/ expected. • Objective: comparing the differences in the increases in the proportions aged 60 and more. The results are shown in the next slide. Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  5. 89.8 Effect increase in E0 and in changes in TFR Observed and expected evolution of fertility (TFR) and life expectancy (E0), left panel, and of proportions of people aged 60 and more in the member states of the former EU15, right panel, 1950-2100 36.9% It is true of course that low fertility pushes the already high proportions of older people even higher. It should however be clear that the main ‘motor’ of ‘population ageing’ is the increase of fertility (the increase in E0 alone would be responsible for doubling the proportion between 1950 and 2100). In other words, higher fertility is not really a ‘remedy’ against ‘population ageing’ (a TFR value of 2.1 would lower the proportion in 2100 by about 1.5 percentage points). E0 (left scale) 2.33 1.85 28.1% TFR (right scale) Effect increase in E0 alone 66.5 13.9% Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  6. A very good point in the paper is illustrated in the following diagram: • It is indeed a fact that the effects of the phenomenon of ‘population ageing’ are not limited to the socio-economic domain, but that the effects will be multi-faceted, i.e. will touch a multitude of layers of society • What is needed is a truly ‘exhaustive’ study (which is so far lacking) Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  7. Some comments/ reflections re the following items: • The increasing cost of health care as a result of ‘population ageing’. • The care given by children to older parents • Ensuring the cost of old-age benefits Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  8. Re the increasing cost of health care: • “In OECD countries health care expenditure is typically three to five times as high for those aged 65 and over as for those aged under 65 […]. However there is considerable variation in the proportion of GDP devoted to health care spending for older people which bears little obvious relationship to the proportion of older people in the population concerned. Expenditure relative to GDP is much higher in the USA than in European countries, for example, even though the USA has a younger population.” • “Moreover analyses by health economists have identified the growing costs of new technological innovations in medicine as a far greater influence than population ageing on past growth in health care expenditures.” Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  9. Median value A, B, DK, FIN, F, D, I, NL, E, S, UK • Re the increasing cost of health care (cont’d): Average expenditure per head expressed as share of GDP/capita Source: Economic Policy Committee, DG Economic and Financial Affairs (EU) According to Kieffer (2004) the observed age profile for public expenditure on health closely resembles … the average expenditure on health care during the last 48 months of life. In other words, the observed age profile would rather be death-related than age-related. Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  10. Re the care from children to older parents: • “Ogg and Renault (2006) found that between 6% and 13% of people aged 50-59 included in the SHARE surveys who had a parent alive were providing personal care.” • “[Several theories/ findings see] the growing involvement of women in the labour market – something advocated by policy makers concerned about the labour supply implications of population ageing – as encroaching upon ‘traditional’ roles as both mothers and caregivers. .” • According to results of the DIALOG-project (11 participating countries: BE/Fl, CZ, D, EE, FI, I, LT, NL, PL, RO, SI), a vast majority of citizens (over 70%) believes that ‘children should take care of the elderly’. This has been interpreted as an indication for continued intergenerational solidarity. On the other hand, the low percentage observed for Finland (32%) indicate that state interventions are a viable alternative.. Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  11. Re ensuring the cost of old-age benefits: (Not directly treated in Emily’s paper, but relevant to one of the 3 ‘spheres’) • According to results of the DIALOG-project:.. 29% to 48% seem willing to pay higher taxes if needed 25% to 51% agree to abolish early retirement programmes (Note however, that a vast majority of the respondents - about 70% - would prefer a lower age at retirement than the expected or legal age) Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  12. To conclude, let me share with you some ‘afterthoughts’: • This is indeed one way to ‘solve’ the ‘problem’ of ‘population ageing’ • There is no such thing as a ‘free lunch’. In other words, we live longer? Maybe that we need to be ready to pay the price for it. For this person, the real question is not “Can we pay the price?”, but “How do we want to do it?” • More than 70% of the respondents of the DIALOG-project consider the increasing number of older people as a ‘bad’ or a ‘very bad’ evolution (!?) In other words, there seems to be something wrong with the way we (or our politicians) communicate. Colloquium Ron LESTHAEGHE 15-16 Feb 2007

  13. Thank you for listening Colloquium Ron LESTHAEGHE 15-16 Feb 2007

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