Ageing Unlimited – What Does Rising Longivity Mean for Europe?
The increase in individual life expectancy is an indisputable achievement. In terms of population, however, population ageing is inevitable in most European countries, as the most populous generation reaches higher ages whilst fertility levels remain low. What does rising longevity mean for the European economy and for Europeans? Which new social and political challenges are evolving out of ageing populations? These were the main questions discussed at the panel debate on the 31st of January at the Grand Opening of the Max-Planck Odense Center on the Biodemography of Aging in Odense, Denmark. The debate was moderated by Lone Frank, journalist from the Danish weekly broadsheet newspaper Weekendavisen.
For Dr. Manfred Huber, Coordinator for Healthy Ageing, Disability and Long-term Care at the Regional Office for Europe of the World Health Organization, it is of utmost importance that ageing societies put health high on the agenda. He stressed that this challenge goes much further than healthcare systems to include prevention and the reduction of risk factors. Therefore, “policy has to be multisectoral and also needs to reach out to civil society”. Huber emphasised that it is not longevity, but instead early retirement and disability pensions that create the problem.
Éric Chaney, Chief Economist at AXA Group and Head of Research, AXA Investment Managers, preferred the term longevity instead of ageing. “Today this means an increase in numbers of years in good health, in human capital and in welfare.” He is convinced that the economic decline in Europe is not due to ageing but instead to the inability of European economies to adapt: “Longevity is not the problem, but the solution, provided that the retirement age is accordingly raised.” He sees the main hurdles in regulations, mindsets, short-termism and companies that do not understand that a dimension of human capital, namely experience, is related to being older, and thus, having more experience.
In a similar line of thought, Thomas Børner, Senior Advisor of the Danish Minister of Finance, pointed out that for Denmark demographic change is not a problem: “Not only the life time is expected to increase, but we also have healthy ageing.” He explained that even though there might be some problems in the transition period, his country is well equipped: firstly due to its stable pension system, and secondly because Denmark is gradually increasing the pension age as life expectancy increases. From his point of view this is one of the most effective measures to deal with population ageing.
Prof. Dr. Kirk Scott, Centre for Economic Demography, Lund University and Stockholm University Demography Unit, also underlined that the most important aspect in regard to population ageing is a sustainable pension system. He argued, however, that even the stable systems need to be redefined in such a way that older people do not need to reduce consumption, so that “a larger number of elderly also means a larger amount of capital”. Scott emphasised that we also need to consider the positive value of the non-market labour of the elderly when discussing the economic consequences of population ageing. From an economic point of view, a redistribution of work across the life-course is not a solution for Scott: “This would be a zero-sum game.” He said that there is no gain when people work less when they are younger and therefore retire later, as this will not increase the overall productivity.