Cost of ageing population 'needs re-calculating'
- 10 September 2010
- From the section Health
The cost of old age on health services in industrialised nations may need to be re-measured, a study suggests.
Rising life expectancies and improved health means the population is ageing more slowly and the burden may not be as dramatic as feared, scientists say.
The US and Austrian study in Science magazine proposes a new way of measuring ageing which is not reliant on fixed chronological ages.
This will help calculate the cost of old age and retirement more accurately.
According to scientists from the International Institute for Applied Systems Analysis in Austria, Stony Brook University in the United States and the Vienna Institute of Demography, the current method of measuring ageing has been based on misleading information.
"Most of our information about ageing comes from indicators published by the United Nations and statistical agencies," said Professor Warren Sanderson from IIASA and SBU.
Old at 65?
"These indicators, which are used worldwide to determine health care and retirement costs, are based on chronological age and in many instances consider people as being old when they reach age 65 or even earlier," he said.
Traditionally the old-age dependency ratio, OADR (the number of people aged over 65 to people of working age), was used to assess the burden to the society of supporting elderly people.
The increase of that ratio was considered to reflect the growing burden of the ageing population on the pensions system.
But this measure is now out of date, say the authors of the study, because people live longer and someone at age 65 is not an old person anymore.
The same problem occurs if policy-makers use the old-age dependency ratio as an indicator of the burden of ageing on health care costs.
Most health care costs occur in the last few years of life and these years happen at ever later ages as life expectancies increase.
The study authors provide a new dependency measure they developed called the adult disability dependency ratio (ADDR).
It is based on disabilities that reflect the relationship between those who need care and those who are capable of giving it.
Their study shows that when ageing is measured based on this ratio, the speed of ageing is reduced by four-fifths compared to the conventional old-age dependency ratio.
These methods of measurement have policy implications, say the authors, because: "slow and predictable changes in pension age justified by an increased number of years of healthy life at older ages may be more politically acceptable than large, abrupt changes justified on the basis of budget stringency."
In the UK, the normal pension age is scheduled to rise from 65 to 68 by 2044.
And in Germany it is expected to rise from 65 to 67 by 2031, with the US retirement age increasing to 67 in 2027.
Population ageing will be the source of many challenges in the future.
"But there is not reason to exaggerate those challenges through mismeasurement," says the study.
Michelle Mitchell, charity director for Age UK, said: "This study clearly shows viewing older people simply as a 'burden to society,' is an out-of-date concept.
"On the contrary, increasing longevity and improved health care mean many older people are able to make a very positive and important contribution to our society.
"At the same time," she added, "it's important to remember that while life expectancy is increasing, people are living with disabilities for longer than before and a huge gap in life expectancy remains between rich and poor people."