Cost of ageing population ‘needs re-calculating’

September 12, 2010

Cost of ageing population ‘needs re-calculating’

9th September!~

An elderly couple on the beach Systems should change to reflect the fact that people are no longer old at 65, the study says

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.
Continue reading the main story
“Start Quote

Viewing older people simply as a ‘burden to society,’ is an out-of-date concept”

End Quote Michelle Mitchell Age UK

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But this measure is now out of date, say the authors of the study, because people live longer and someone at age 65 is not an old person anymore.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.”

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