Impacts of ageing for developed economies

In my second blog on the Ditchley Foundation conference on the implications of ageing in developed economies I’ve digested the discussion on the consequences of ageing. (Read the first post here)

Healthcare

It was striking that the conversation was dominated by healthcare. We distinguished between ‘true’ age-related healthcare costs, associated with chronic conditions and long term care, as opposed to the costs of the last year of life, which arise whenever someone dies and may actually be higher for early death (when people are more likely to benefit from costly interventions).

There was agreement that ageing is not the main driver of health costs, with improving technology and rising expectations considerably more important.

Participants questioned whether US health spending was an unusual outlier, or the inevitable trajectory for other advanced economies. While American delegates tended to be fatalistic about health costs, participants from other countries pointed to their success in checking rising costs and maintaining health spending at a lower share of GDP (usually with better health outcomes, since healthcare only has a small impact on a society’s health). Continue reading “Impacts of ageing for developed economies”

The future face of older workers

Depending on the policy area, an older person is defined as anyone above 60 or 75 for various concessions, or 50, when it comes to sticking on the ‘older worker’ label. For the purposes of this piece let us concentrate only on older people of working age –that is, those between 50 years of age and the state pension age.

According to the latest principal population projections, there are about 9.4 million people of working age over 50 in the UK. Furthermore, figures from the Labour Force Survey suggest that 53% of these people are in full-time employment and another 17.5% are in part-time employment. Also 19% of these 9.4 million people have attained at least a first degree but another 15.7% do not hold any formal qualifications.

Using the population projections and data from the Labour Force Survey for each cohort, we estimated what the labour supply of older workers will be like with regards to economic status and skills between 2015 and 2025. That is, we analysed data for women between 35 years of age (who will turn 50 in 2015) and 57 (who will reach their state pension age in 2016, when they turn 65) and men between 35 and 59 (who will reach their state pension age in 2016). We have factored in the fact that state pension age will rise during this period –more acutely for women.

Furthermore, in order to present these results in context, we compared them with the economic activity and skills structure of current older workers. What did we find? Continue reading “The future face of older workers”