Getting Older, Or Getting Younger?

Warren Sanderson & Sergei Scherbov had a very interesting article in Nature earlier this year (you can find the full article reproduced here on page 5). The article title really tells the story in itself: average remaining lifetimes can increase as human populations age. Put differently, we may be facing the interesting enigma that the longer we live, the longer we have left to live.

But, riddles aside, what Sanderson and Scherbov actually propose is a new metric: the median age of the population standardized for expected remaining years of life. Now why would that be interesting?
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Turnering The Screw

The Turner Report is about to appear. The Turner in question is the UK peer Lord Adair Turner, and the subject of the report the future of the UK pensions system. Although the final report is not due till the end of the month, the FT has been ‘ leaking’ some of the possible contents.

The commission will apparently suggest that the age at which workers can claim their full state pension should, over time, rise from 65 to 67. The increase is intended to come in stages, starting after 2020 when the UK’s women’s state pension age is set to be aligned with men’s at 65. Thereafter, state pension age should rise in line with increasing longevity, the commission will say. Now this idea seems to me to be a very important one, and I’d just like to take the time out to explain why I think this.
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In No Hurry

The EU Observer reports today on how some states are decidedly tardy in producing their Lisbon Agenda action plans:

Embassies are due to hand in their national plans, consisting of 30-40 page dossiers with statistical annexes, by the weekend, with EU experts flying back and forth to member states in the past few weeks to help finalise the texts.

France, Sweden and Denmark told EUobserver that they will not make the Saturday deadline however, while question marks hang over Germany and Poland as well.

Paris hopes to send in its document by the end of this month, Stockholm is aiming for 21 October and Denmark for the “next few weeks”, citing delays over the late sitting of parliament and translation back home….

The UK, the Netherlands, Greece, the Czech republic, Hungary, Slovakia and Slovenia confirmed that they will get their plans in by the weekend however, with the Czech republic claiming to have had its text finished months ago.

Mind you, we should put all this in some kind of context, according to another EU Observer article the OECD (see this post) is at pains to convince some member states that they really do need to seriously address their early retirement culture!

Europe needs to stop subsidising the early retirement of its citizens, despite social protests caused by pension reforms, according to a new OECD report…….According to the paper, several European countries have been striving to sustain their early retirement culture, introduced in the past as a way to tackle high unemployment among young people

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No Answers Only Questions

One person who could rightly claim to know more about global ageing and its possible consequences than anyone else in the business is the German Director of the Manheim Research Institute for the Economics of Ageing Axel B?rsch-Supan. If there’s a conference being organised, he seems to be there. Actually his comments at both these meet-ups are well worth reading in and of themselves (here, and here).

In a sense B?rsch-Supan is almost uniquely qualified to express opinions on the topic since he has both devoted a large part of his professional career to studying the question, and he lives and works in a society which is already reeling under the impact. As he says:

“Today?s Germany has essentially the demographic structure that the United States will reach in a quarter of a century. The dependency ratio (the ratio of persons aged 65 and over to those aged from 20 to 59) is at 28 percent, and it will reach 75 percent in 2075, if we dare project that far. Almost one-fifth of the German population today are aged 65 and over. One quarter are aged 60 and over, which is relevant because the average retirement age in Germany is 59.5 years. Thus, in this sense the United States is not ?entering largely uncharted territory,? …. Rather, they can look to Europe?in particular to Germany and Italy?to see what will happen in the United States.”

I mention B?rsch-Supan because he serves as a good pretext for going over where we are to date with the issue. As he says himself. watching demography change is rather like watching a glacier melt, on a day-to-day basis it’s hard to see that anything is happening, but over time the impact is important.

One of his recent papers has the intriguing title: “Global Ageing: Issues, Answers, More Questions“. It is a good up-to-date review of the ‘state of the art’, and a quick examination of the points he makes probably serves as a good starting point, since I can’t help thinking, in the case of global ageing, it isn’t so much what we know that matters, it’s what we don’t know.

So here we go, a review of what we “know”, what we think we know, and what we don’t know:
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Anyone Want to Play Ball With Me?

Even though it may appear that this post runs along much the same lines as my last two or three, I should warn you: appearances are sometimes deceptive. The origins of what I want to say here stretch back in time two or three days to some comments I made on an earlier post and a subsequent piece which I have entitled the ‘Pele-Ronaldo’ effect. Surprising as it may seem, the topic here is only tangentially football. The real topic is the so-called brain drain, and how our initial intuitions may mislead us. The aforementioned effect is associated with the apparent detail that all those Brazilians ‘heading the ball’ here in Europe have not notedly had a detrimental effect on the rate at which Brazilian football produces outstanding new stars. In fact quite the contrary.

Now here’s the rub: just think of all those Indian IT ‘stars’ working at NASA, Microsoft and the like, and try to imagine the consequences back home in India. Well then try to imagine the consequences of the secondary effect in India on the employment situation in the US and now increasingly in Europe, and we get to the point of all this. We are experiencing a phenomenon which some are calling ‘hollowing out’. This has been noticed in the first place in the US, but with the EU structural reforms, and the relatively high euro, this tendency is going to make itself felt more and more over here. So this is the purpose of the post. To find out what people think.
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Thank God for government by our betters

Via Crooked Timber and Mark Kleinman, I’ve just read this utterly stupid column from Forbes:

Europe’s Utopian Hangover

The EU is built on a fantasy–that men and women can do less and less work, have longer and longer holidays and retire at an earlier age, while having their income, in real terms, and their standard of living increase. And this miracle is to be brought about by the enlightened bureaucratic regulation of every aspect of life.

The EU is a French concept and is still largely run according to French ideas. And France is the archetypal EU country. If you have a regular job in France, your life is, in theory, lyrical. You work 35 hours a week. You generally get four weeks of holiday in August, plus a further three weeks throughout the year, in addition to 11 state holidays. Full medical care is provided, even in retirement. Retirement age varies, but it is now typically 55. Pensions may be two-thirds to three-quarters of a person’s salary at the time of retirement. […]

Americans should count their blessings, above all the supreme blessing of having an economy that is run by businessmen not bureaucrats, or that–under wise governance–runs itself.

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