The economic impacts of an ageing society
Work on the LEPAS (Long-run economic perspectives of an ageing society) project has provided a more solid foundation for developing policy advice targeting the provision of a steady stream of public goods to Europeans. Researchers adopted an innovative biology and life-cycle-based approach to address related ageing, retirement and productivity questions. The work placed particular emphasis on health inequality across EU Member States and life-expectancy across educational groups. Multi-country models, based on a novel life-cycle approach, allowed the team to examine how ageing affects health, human capital formation, migration flows and productivity in EU Member States. The project-developed economic life-cycle model offers a general framework for examining ageing in the biological sense and how it can be applied to retirement-related decisions. Another area of investigation centred on ageing vis-à-vis health demand and supply, and how this feeds back to the macroeconomy. LEPAS also tried to assess whether the EU's market economies and public sectors provide too little or too much health care. Improved assessment of how ageing affects productivity highlights various important factors, such as optimal retirement age from the perspective of both individuals and society as a whole. Additionally, the knowledge generated during LEPAS can be used to inform immigration management policies and national approaches to investment in health care. The project's researchers also studied the impact of an ageing society on education, technical progress and long-term economic growth. They produced a number of scientific reports on their findings. LEPAS succeeded in advancing a new way of thinking about the relationship between the biological process of ageing and modern dynamic macroeconomics. This is an important and timely development given the challenges of recent and ongoing economic crises and an increasingly older population. Project results can thus also be used to improve and hone social science research as well as decision making for better welfare, growth and competitiveness.
Keywords
Ageing society, productivity, demographic changes, health care, health inequality