Current EU ageing rate is economically unsustainable, according to researchers

The ‘Long-run Economic Perspectives on an Ageing Society (LEPAS) project, which was carried out during the last three years by researchers from Spain, Denmark, Germany and Austria, concludes that the current rate of ageing in the EU is economically unsustainable. 

Predictions show that nearly 25% of the EU population will be over 65 by 2030 (an increase from 17% in 2005), and the number of people aged 65+ compared to working-age people (aged 15-64) is expected to double by 2050.

This EU-funded research states that Europe’s population is ageing faster than any other continent. Life expectancy is increasing but the retirement age is not. This leads to people spending longer time in retirement, putting greater pressure on pension systems. An ageing population is also likely to put greater pressure on national health services.

Some of the main results from the LEPAS analysis are:

• Both child and adult mortality are lower in richer countries.
• Higher income affects a person’s decision to invest income in their health and diet, thus slowing down ageing and prolonging health. An increase in personal income of 100% increases life expectancy by 8%.
• Improving healthcare efficiency has a greater impact than increasing per capita income. In theory, increasing healthcare efficiency by 100% could increase life expectancy by around 50%, although other factors are likely to preclude humans living this long.
• Better-educated people generally live longer as they have more human capital to protect, which drives healthy behaviour. Every extra year of education increases life expectancy by approximately six months.
• Higher income affects longevity but not the age of retirement, therefore higher income is associated with a greater number of years spent in retirement.
• As human frailty and disability increases with age, the demand for healthcare services will increase per person over their lifetime.

The researchers suggest that efforts to increase longevity in developing countries should focus on improving the efficiency of healthcare technology, which will be more effective than re-distributing income.