classification and the description of DEGURSBA’s densely, intermediate and thinly populated areas were introduced. The aim of the next part of the paper was to introduce, present formulas and to discuss some properties of populationageing measures used in the research. These were: median age, parent support ratio, ageing index, elderly dependency ratio, proportion of population aged 65 and over (% of total), total dependency ratio. Additionally, we computed Chu’s alternative measure of populationageing (Nath and Islam, 2016) and dynamic version of ageing index proposed by Długosz (Długosz, 1998). The selection of these demographic measures was motivated partly by previous studies on this topic (GUS, 2015). The comparison of the statistical picture of populationageing from TERYT and DEGURBA perspective was presented in the fourth part of the paper. In order to track changes over time, the data for 2016 are compared with those for 2010 (assuming that in 2010 the DEGURBA classification was the same as in 2016), which, in both cases, come from the Local Data Bank maintained by Statistics Poland. Also, some discussion describing the significance of main findings in light of what was already known about the populationageing was provided at the end of this part of the paper. In the conclusions we included not only the main findings of the research but also possible directions of future works.
Which effects will dominate and what will be the impact on the economy and the society as a whole? Understanding the potential implications of demographic changes is essential for academics, businesses and policy-makers alike, yet an empirical impact assessment is difficult due to data limitations, leading to a gap in analytical evidence essential for long-term planning. This study develops a dynamic Overlapping Gener- ations Computable General Equilibrium (OLG-CGE) model used to evaluate the micro- and macroeconomic impacts of populationageing and international migration in the context of the Czech Republic, analysing the potential effects on population welfare and production, as well as public finances. This is done through computer simulations of various scenarios of populationageing and migration patterns, analysing specifically the possibility of a return of a large number of Czechs working abroad, a sudden outflow of foreign workers, and a status quo scenario summarising the consumption and labour force shifts due to populationageing. The model is calibrated in detail using the latest population and productivity estimates for 350 population groups differing in their education, occupation and sectoral affiliation, providing an accurate representation of the Czech economy and its internal economic mechanisms.
benefits or of (ii) the income tax rate. These two assumptions corresponds respectively to the classes of (i) “Tax adjustment models” (TAM, e.g. Scholten and Thum, 1996) and “Benefit adjustment models” (BAM, e.g Razin and Sadka, 1999, 2000) and imply opposite predictions about the relationship between pre-tax income, age and attitude towards immigration (Figure 1-2-3-4). Specifically, the first model implies that the elderly and the low income individuals are more hostile to immigration than the young and high income, while the opposite is true in the second model. The intuition that underpins these two apparently contradictory results lies in the consequence of an increase in the legal inflow of immigrants. Consider for instance the case in which immigrants are net contributors to the fiscal system. If publicly provided benefits are set exogenously, then the effect of an increase in immigration is a fall in the tax rate. Conversely, if the exogenous variable is the tax rate, then the effect is a rise in public spending per capita. As a result, in the former case immigration benefits mostly the young and high income voters, while in the latter the elderly and the low income individuals enjoy the largest share of the gains. In a recent paper Preston (2014) clarifies that the source of this inconsistency lies in how the social gains generated by immigration are divided up among different groups. This division is an output of the political process, but existing models treat it as an input. The issue is even more relevant for the purposes of this paper because I aim not only to understand the patterns of immigration policy, but more generally to address how a democratic society responds to populationageing in terms of immigration and fiscal policy, and the overall consequences on the public finances. These questions can be addressed only in a framework that allows immigration, spending and tax policy to be endogenously determined.
Interest is also attached to topics in public finances. Populationageing will impose a heavier fiscal burden on each working individual as the age dependency ratio continues to grow (compare to Figure 2). This is a particularly pressing issue in countries with a pay-as-you-go system, where pensions are directly financed through social contributions of the working age population. The public pension scheme and the health insurance system will be responsible for a large part of future public debt that will drastically increase until 2050 ( Werding , 2008). To assure the sustainability of the social insurance system, a gradual increase in the statutory retirement age might be inevitable. If growth rates do not change, it is a matter of redistribution. A steadily growing older population is bound to increase the demand for nursing professions. Maier and Afentakis (2013) show that a shortage of fully qualified nursing professionals is already given. Counting fully-qualified and semi-skilled nursing professionals together and assuming an unchanged employment structure, the demand for nurses will be only met through 2025.
funds that will make it possible to support countries in case of a crisis. One could establish an International Pension Fund or something of the kind which would realize financial transfers so that the assets of the ‘older’ population of some countries could help to raise the economy in the countries with ‘young’ population and to accumulate funds for donor countries for the future. Some specific arrangements between countries with certain guar- antees for safety of funds would seem rather appropriate. In brief, there could be many options. But the main problem is that despite the fast populationageing, the versions of global solution for the problem are poorly considered.
Populationageing is one of the key challenges of many societies in the early 21 st century. In countries of former communist states of Eastern, South-Eastern and Central Europe this process takes place differently from Northern and Western Europe. The fact that these changes co-occur with the transformation of political, social and economic characteristics of individual countries towards liberal democracy and free market is crucial. PopulationAgeing in Central and Eastern Europe. Societal and Policy Implications is a unique collection of scientific research papers involving comparative perspectives. A key thesis described by the editor Andreas Hoff in the preface and introduction chapter is that in Central and Eastern Europe, populationageing is determined by the joint effects of increasing longevity, a very rapid fall in fertility and migration of young Eastern Europeans from ‘‘accession countries’’ of the European Union to ‘‘old EU member states’’, which is associated with ‘‘EU enlargement’’ as well as migration to North America or Australia.
The two phenomena responsible for populationageing, mortality and fertility declines, have resulted from policies and attitudes of the State and the society and were very welcomed. Nevertheless, their consequences are in general causing worries as they put pressure on resource transfers and challenge society, the State and productive sectors. This is a point of view based on the division of the population into two groups: the productive and the dependent. Furthermore, the dependent ones are seen as a burden as they do not produce, they only consume. It is assumed in this paper that populationageing brings challenges to all the mentioned institutions, especially to the State. Nevertheless, it is one of the most important social achievements of the 20th century and it is also assumed that the objective of public policies should be collective well-being.
by Poterba ( 2001 ), B¨ orsch-Supan, Heiss, Ludwig, and Winter ( 2003 ), Krueger and Ludwig
( 2007 ) and B¨ orsch-Supan and Ludwig ( 2009 ), among others.
In a calibrated multi-region model, Brooks ( 2003 ) finds that European countries and Japan become capital exporters with respect to North American and African countries because those regions have a much younger society. Marchiori ( 2011 ) shows that this holds for Western economies vis-` a-vis the rest of the world in general. Similar to our analysis, he predicts a turning point during the first half of the century, when the other economies start ageing, too. Felbermayr et al. ( 2017 ) and Bundesbank ( 2018 ) also attribute much of the German account developments to populationageing. As is discussed above, and also mentioned in Dao and Jones ( 2018 ), one prerequisite for this to happen, however, is that the demographic trends of the ageing region and its trading partners must be rather unsynchronized. As we show in this paper, the importance of populationageing for German current account developments indeed decreases significantly if we take into account populationageing of Germany’s most important trading partners, too.
This paper studies how changes in the population composition by education and family characteristics impact on indicators of the economic effects of populationageing based on National Transfer Accounts (NTAs). NTAs constitute cross-sectional per-capita age-profiles of the key variables of national accounts consumption, income, saving, and public transfers, incorporating an estimation of private transfers. A variety of indica- tors based on NTA data combined with population projections was developed in the literature, of which we have selected two for our analysis: the Support Ratio (SR) and the Impact Index (IMP). We complement existing projections by using new disaggre- gated NTA data by education and family type, contrasting the results to the same indi- cators based on NTAs by age. Our projection analysis is performed using the dynamic microsimulation model microWELT. The model provides the required detailed socio-de- mographic projections and incorporates the NTA accounting framework. Our results show that indicators based on disaggregated data can give a very distinct picture of the economic effects of populationageing, as the burden of ageing is alleviated by the education expansion. Our study compares results for Austria and Spain.
sustainability of the public health care system then types 1 and 4 are the most obvious ones to choose from.
What populationageing means for future economic growth and public finances have been of particular interest for academics. Recent literature has developed theoretical arguments that focus on the different channels through which demography may inﬂuence economic growth, as well as empirical evidence on the potential effects of such demographic changes on several macroeconomic variables (Crespo Cuaresma et al. 2014a). This has been aided by the creation of the National Transfer Accounts that has enabled a more precise construction of populationageing indicators by taking into consideration the effect of changes in the population age structure on income and consumption flows. One result of NTA is for instance that populationageing also depresses the support ratio after adjusting for age-specific consumption and labour income profiles and is likely to produce a negative first demographic dividend in most industrialised countries over the coming decades (Prskawetz & Sambt 2014). The resulting increasing proportion of non-working elderly in the population is, as we know, a common political and economic worry because it is thought that the burden for working adults of financing the consumption of non-working adults through public transfers will increase to unsustainable levels (e.g. European Commission 2010). However, detailed age accounting for individuals and households using NTA data has also shown that basing policy solely on expected changes in the support ratio is ignoring an array of other factors that, under the right circumstances, may actually produce a second demographic dividend in ageing populations. This is for several reasons. First, because retirees do not, as popular discourse may suggest, rely exclusively on the labour of others (through public and familial transfer systems) to fund their pensions but also on their own pension funds, personal savings, homes acquired during their working years, and other assets to finance some part of their retirement (Mason & Lee 2007). Secondly, during the process of populationageing the labour force increasingly concentrates in higher age groups. As they are generally aware of their own mortality risk (Hamermesh 1985; Post & Hanewald 2012) they know that they will spend more years in retirement than earlier cohorts. This can be a strong incentive for people to accumulate assets for their retirement, which then leads to an upward shift in the age profile of wealth, an important source of the second demographic dividend.
The article shows recommendations for strategic management in collective actions against populationageing. The main conclusion from the described examples of initiatives implemented in the European Union - Regions for All Ages programme and network organization SEN@ER - Silver Economy Network of European Regions - is that the cross- sector cooperation is the key to positive response. Another proposal is that it is necessary to search for solutions aimed at building connections between entities from public sector (local governments), market sector (business) and social sector (NGOs). Public authorities should have a main role in the coordination of activities, but their representatives should also encourage and enable dialogue to reconcile the interests of all stakeholders. They should be stimulated for seeking solutions to accommodate this long-term challenge with their short-term objectives (Ferry et al. 2006: 30, 46). They have also special responsibility to promote positive models and create conditions for the production and use of new resources. Strategies can be designed to build trust, which is a key variety of social capital that defines the opportunities for effective cooperation in solving common problems (Sztompka 2007: 293-300). Interventions should take into account the intergenerational consultations and interests of various age groups (Sáez et al. 2007).
Figures 2.1 and 2.2 show the qualitative impact of populationageing and in- migration on the labour market. These labour market changes will have major impacts on the economy overall. In particular, with an ageingpopulation, we expect a negative effect upon competitiveness due to the increased wage, which is a key production cost. This reduced competitiveness has a negative impact on GDP. On the other hand, increased net migration eases the labour market, improves competitiveness and increases GDP. However, the interactions within the economy are naturally more complex and detailed than this and are explored in the simulations reported in Sections 5 and 6. However, note that the figures that are reported in Sections 5 and 6 are for time periods over which such long-run adjustment is not yet complete. Similarly, where we report period-by-period simulations, we are tracing out the adjustment path to a long-run equilibrium that is perpetually changing.
In recent years, governments have reacted to the challenge posed by ageing and have initiated major reforms of their pension systems (Table 3). Not shown in Table 3 are the many systemic changes with regard to statutory retirement age, access to early retirement and methods of benefit indexation. Simulation models show that the reforms conducted up to now will not be sufficient. However, a further increase of the already high contribution rates in some countries will have adverse effects on the labour market. Thus, a further reduction in the replacement level is a major way out. In order to avoid serious repercussions with respect to the stan- dard of living of pensioners, private retirement sav- ing must be increased. As Table 4 shows, assets of pri- vate pension funds have already increased remark- ably – albeit only in some countries.
Röhrs and Winter (2012) attempt to explicitly match the wealth and earnings distribution of the US economy, where a very small share of the population accounts for most of the wealth. After accounting for the empirically observed skew in the distribution of income and wealth, the result in Aiyagari and McGrattan (1998) is reversed. This is because Aiyagari and McGrattan use a stochastic income process that generates very little dispersion, so their economy is populated by many “average” agents who hold some assets and earn “average” wage income. In these conditions, the effects of higher interest rates and lower wages roughly cancel each other out, attenuating the welfare effect of changing debt. When income and wealth are concentrated on a minority of households, Röhrs and Winter find that public debt has significant negative welfare effects, which implies that the government should save to accumulate assets (they estimate the optimal level of public sector assets at 50% of GDP if debt is financed by changes in capital taxation and 110% of GDP if it is financed by changes in labour taxation). However, Röhrs and Winter recognise that this may not be politically feasible since the welfare change is negative along the transition path to that optimal point. Given that wealth is concentrated in the hands of a few, they observe that the most practical way to reduce debt is to raise capital taxes and lower labour taxes.
Fraser of Allander Institute, University of Strathclyde, Glasgow, UK; b Belarusian Economic Research and Outreach Center (BEROC), Minsk, Belarus
Belarus currently has a relatively generous pay-as-you-go pension system, but population aging coupled with recent problems with economic growth will soon make it unsustainable. We build a rich overlapping generation model of Belarusian economy, which shows that without reform the Pension Fund will run into persistent and growing deficit, which will reach 9% of GDP by 2055. We also compute the fiscal projections of several parametric pension reforms, including the reform which will start in 2017. To avoid a deficit without reform, pension benefits would have to be substantially reduced. The increase of retirement age to 65 for both genders has a strong positive effect on sustainability of the pension system and keeps the deficit below 2% of GDP.
intensive as the nominal wage increases, so that there is some substitution of capital for labour.
Figure 5.1 here
Figure 5.1 shows the expected changes by 2040 in sectoral output and employment generated by the GAD demographic projections for Scotland. Note first that these simulations do not take into account any variation in the composition of government and household consumption demand that will be driven by populationageing. For example, there is much discussion of the implications for health care and education provision resulting from longer life expectancy (Economic Policy Committee and European Commission, 2006). Such compositional demand changes are not considered here. These disaggregated results therefore primarily reflect more general demand-side factors. These are the extent to which the sector supplies export, investment, household consumption or government demand.
persons”. More specific instructions and examples of good practice were presented in policy briefs series written by United Nations Economic Commission for Europe (2012). The idea of ”society for all ages,” has been developed since the 1990s and now it is the basis for UN actions. It is also the most optimistic scenario in terms of populationageing whose implementation requires the involvement of creative class (Inayatullah 2003). In the European Union the stimulation of seniors’ creativity is a part of social inclusion and digital divide reducing programs (Opinion… 2011; Frąckiewicz 2009). In the United States creativity is invariably one of the topics at the White House Conference on Aging which is held once a decade since the 1960s. (Misey Boyer 2007; WHCA 2005). A document pre- pared in Northern Ireland which includes the diagnosis of barriers and benefits to partici- pating with the arts, SWOT analysis, engagement themes, objectives and performance indicators (ACNI 2010) can serve as an example at the regional level. In Poland the gov- ernment intends to promote media competences of “50+ individuals,” increase their role in the enhancement of intergenerational identity and the popularization of cultural herit- age (Smoleń 2011). The strategy papers also drew attention to the promotion of goods and services for an ageingpopulation, the ”silver economy” (ZWWM 2008; Golinowska 2010; Klimczuk 2011).
2. Enhancing the eco-system of Entrepreneurship/ Social Entrepreneurship in the context of an ageingpopulationPopulationageing is a wide spread phenomenon. According to a Bank of America Merrill- Lynch study (2014), by 2050 the population aged over 60 will reach more that 2 billions globally. The demographic forecasts on medium and long terms show, without doubts, that Europe is facing an accelerated ageing process of its population. According to the latest Ageing EU Report 2015, Europe is "turning increasingly grey in the coming decades" (European Commission, 2015a, p.21), trend that combined with increasing life expectancy, and falling fertility will have strong social, economic and political implications. In concrete terms, the demographic old-age dependency ratio, will nearly double by 2060 - 50.1%, compared to 2013 - 27.8% and life expectancy is projected to reach by 2060, 84.8 years for male and 89.1 for females (European Commission, 2015a, p.35), putting pressure on public expenditure. Emerging concepts like " longevity economy" and "silver economy" are encompassing all economic activities serving people over 50. With a value of 7 trillion $ per year, it is the 3rd largest economy in the world ‒ Merrill Lynch estimates in European Commission (2015b, p.4). A recent document (European Commission, 2015b, p.4) is defining the Silver Economy as "the economic opportunities arising from the public and consumer expenditure
One of the most important challenges for development in the early 21st century is the unprecedented scale of populationageing . For a long time, this issue was mainly discussed regarding the countries of the Global North . However, people are ageing everywhere around the world and providing ahigh quality of social and health services for older adults in the Global South will be even more challengingbecause the pace of ageing is there much faster than it was in the Global North . Having said that, we need to focus more and more on constructing the solutions that will be fighting ageism , stopping negative age stereotypes, and limiting negative risk related to intergenerational tensions and conflicts.
Collective review of Rune Ervik; Tord Skogedal Lindén (2013): Making Of Ageing Policy. Theory and Practice in Europe and Sarah Harper, Kate Hamblin (eds.) (2014): International Handbook on Ageing and Public Policy. In 2013-2014, Edward Elgar published two interrelated books in the fields of social gerontology and public policy. Both books include domestic and cross-national case studies on selected topics that are important for ageing policy. The International Handbook on Ageing and Public Policy edited by Sarah Harper and Kate Hamblin focuses on a global approach towards demographic change. Meanwhile, The Making of Ageing Policy edited by Ervik Rune and Tord S. Lindén brings a closer look at issues, programs, and activities relevant to the ageing policy and its entities, especially in the countries of the European Union (EU) that are still seen as those that have been first to construct positive responses to the ageingpopulation. Although, populationageing has slowed in Europe in recent years, globally it will have a substantial impact in the near future, mainly in Asian countries. Thus, it is necessary to create various programs that will allow societies and economies to adapt to new demographic conditions, among others, in the fields of the labour market, long-term care, social