The Challenge of Ageing - An analysis of causes, consequences and solutions to the challenge of population ageing in Europe

1. The Challenge of Ageing
Università degli Studi di Parma
Dipartimento di Economia
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Corso di Laurea Magistrale in International Business and Development
Relatore
Chiar.mo Prof. Guglielmo Wolleb
Candidato
Andrea Danni
Anno Accademico
2011/2012

2. The Problem
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

3. Introduction
!
Wellbeing and Ageing Society
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

4. Introduction
!
Wellbeing and Ageing Society
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
To define well-being (...) the following key dimension should be taken into account (...):
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• Material living standards (income, consumption and wealth);
• Education;
• Political voice and governance;
• Environment (present and future conditions);
• Insecurity, of an economic as well as a physical nature
• Social connections and relationships
• Personal activities including work
• Health
!
(Commission on the Measurement of Economic Performance and Social Progress)

5. Introduction
!
Wellbeing and Ageing Society
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

6. Introduction
!
Wellbeing and Ageing Society
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Social connections and relationships
• Personal activities including work Ageing process
• Health

7. Introduction
!
Wellbeing and Ageing Society
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Social connections and relationships
• Personal activities including work Ageing process
• Health

8. Demographic Changes
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

9. Demographic Changes
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

10. Demographic Changes
Age Pyramid
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

11. Main drivers of the demographic structure
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

12. Main drivers of the demographic structure
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Fertility rates
Life expectancy
Historical demographic path
Immigration

13. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Low fertility rates, when combined with low mortality rates, produce a rapid ageing
of population
!
Declining fertility rates in all EU countries with different timing and pace.
Most of countries register fertility rates under the replacement fertility rate (2.1)
Fertility rates

14. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

15. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

16. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Fertility rates
Life expectancy
Historical demographic path
Immigration
Main drivers of the demographic structure

17. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Men Women
Life expectancy

18. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

20. Fertility rates
Life expectancy
Historical demographic path
Immigration
Main drivers of the demographic structure

21. Greying of baby boomers:
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High post war fertility rate created a generation bigger than
usual that now is ageing and approaching retirement age
Historical demographic path

22. Greying of baby boomers:
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High post war fertility rate created a generation bigger than
usual that now is ageing and approaching retirement age
Historical demographic path

24. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

25. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Fertility rates
Life expectancy
Historical demographic path
Immigration
Main drivers of the demographic structure

26. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Nationals EU but Not Nationals Not EU All immigrants
Median age of immigrants by nationality (2006)
Positive effects of projected migration inflows are not enough to
balance demographic change: 11 million immigrant should be added to
the 14 forecasted for next 50 years
Immigration

27. Effects of demographic changes
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

28. Effects of demographic changes
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
EU25
* Economic old-age dependency ratio calculated as non active population aged 65+ as percentage of employed population aged 15-64)

29. Projected older workers (55-64) share on total workforce
Effects on the labour market
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

30. Projected older workers (55-64) share on total workforce
Effects on the labour market
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
EU27

31. Effects on the labour market
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Older workers have peculiar features which importance will increase with the increase of
older workers’ share on the total workforce:
• Higher wages
• Less likely to change or lose their job
• Unemployed older workers find a new job with more difficulties than younger workers
• Re-employed older workers are likely to have wages lower than their previous job
• Less “educated” than younger workers
• Less mobile than young workers (both sectorial and geographically)

32. Effects on the health system
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

33. Healthcare expenditures represent a big share of national expenditures (10.2% of
GDP of EU27)
!
Healthcare expenditure drivers:
Effects on the health system
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Size and composition of the population
• Health status of the population
• Technology
• Income
• Policies and regulations
• Inputs’ markets (workforce, pharmaceutics, etc)
• Education
• Sociocultural framework

34. Effects on the health system
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Size and composition of the population
Older people are those who consume the biggest share of healthcare goods and
services.
!
Age related expenditure profiles of healthcare provision. Males, per capita.
Increased weight of older cohorts produces an increase in the demand of healthcare
goods and a reduction of resources (increasing dependency ratios)

35. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Uncertainty in prediction regarding future healthcare
expenditures due to the quantity of cost drivers.
!
However Eurostat projections predict increase in the healthcare
expenditures also in the most conservative scenario
Effects on the health system
Projected results for different scenarios on healthcare expenditures

36. Effects on Long-term care
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Long term care aims at making lives of people with limitations more tolerable and preventing
steep declines in quality of life.
!
!
LTC weight on national expenditures is significantly lower respect healthcare expenditure
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Different ways to provide LTC.
There are great differences between formal and informal LTC
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Women represent a great share of LTC workers both formal and informal

37. The Solution
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

38. Definitions:
!
Active ageing is “the process of optimising opportunities for health,
participation and security in order to enhance quality of life as people
age” (WHO).
!
!
Active ageing is a win-win strategy producing a double positive effects:
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1. It increases individual wellbeing and quality of life of older people improving
their health, wealth and capabilities.
!
2. It reduces ageing negative consequences at macroeconomic level.
Active ageing
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

39. Active ageing statistics: Health
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

40. Active ageing statistics: Health
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Males Females

41. Active ageing statistics: Health
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Long standing Illness (75+)
Self-perceived severe limitation (75+)

42. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Active ageing statistics: Participation

43. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Total Employment Older workers employment
Active ageing statistics: Participation

44. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Men Women
Active ageing statistics: Participation

45. “This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Total Population People aged 55-64
Active ageing statistics: Participation

46. Health Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Policies that improve health have a double positive outcome:
they increase individual quality of life and they improve the economic and social
abilities of the population.
!

47. Health Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Direct policies on the healthcare system and health services
and goods supply:
• Preventive policies that aim to foster better lifestyle:

48. Health Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Direct policies on the healthcare system and health services
and goods supply:
- Physical activities
- Healthier diet and better nutritional habits
- Control substance use and misuse (alcohol, tobacco and medication drugs)
• Preventive policies that aim to foster better lifestyle:

49. Health Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Direct policies on the healthcare system and health services
and goods supply:
- Increase rates of preventive controls for relevant disease
- Increase supply of qualified workforce
- Increase investments in infrastructures and technology
- Increase supply of care (long- and short-term care)
- Adapt healthcare system to new needs
- Ensure equity in the healthcare system (age and income discrimination)
- Physical activities
- Healthier diet and better nutritional habits
- Control substance use and misuse (alcohol, tobacco and medication drugs)
• Preventive policies that aim to foster better lifestyle:

50. Health policies are necessary but are not the only
policies needed to create a sustainable ageing society.
!
!
Policies are needed also in the fields of labour market
and social participation of older people
Participation Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

51. Participation Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Policies aimed to increase older people participation in the labour market:
• Policies aimed to increase older people participation in the society:

52. Participation Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
• Policies aimed to increase older people participation in the labour market:
- Increase working lives
- Flexible retirement process
- Increase activity rates of older employment (hiring process and job search)
- Increase participation of older people in learning activities
• Policies aimed to increase older people participation in the society:

53. Participation Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
- Support older people involved in informal work (e.g. LTC)
- Create a physical environment aged friendly (transportation, accessibility, housing, security)
- Create a positive social attitudes towards older people
• Policies aimed to increase older people participation in the labour market:
- Increase working lives
- Flexible retirement process
- Increase activity rates of older employment (hiring process and job search)
- Increase participation of older people in learning activities
• Policies aimed to increase older people participation in the society:

54. Implemented Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

55. EU provides resources to promote active ageing through several projects and programmes
funded with EU funding tools:
Implemented Policies
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
- European Social Funds
- European Regional Development Fund
- Cohesion Fund
- European Agricultural Fund for Rural Development
EU promotes and sustains project of technologic research and innovation which helps to
reach the goals of active ageing.
EU plays also a key role in promoting active ageing through programmes of research,
coordination and sensitisation of local policymakers and public opinion
Many actions necessary to promote active ageing belong to areas where Member States have
direct responsibility so EU cannot act directly in those fields.

56. Conclusions
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.

57. Conclusions
“This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon
their skill and sagacity and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have
added new years to life our objective must also be to add new life to those years.”
!
John F. Kennedy, 1963.
Population ageing have several negative effects on our society.
These effects are very diversified geographically across Member States.
The most effective response is to improve the health status and the social importance of older
generations: ACTIVE AGEING.
Active ageing is a win-win strategy since improve both individual and aggregate wellbeing.
Active ageing is a long term policy and several years will be necessary to adapt the society to
the demographic changes.
Fast and concrete actions must be taken at all levels: European, national and local.

58. “This increase in the life span and in the number of our senior citizens
presents this Nation with increased opportunities: the opportunity to draw
upon their skill and sagacity and the opportunity to provide the respect and
recognition they have earned. It is not enough for a great nation merely to
have added new years to life our objective must also be to add new life to
those years.”
!
John F. Kennedy, 1963.
Thank you for your attention.