(http://www.stakes.fi/etan/ageing.htm, 24.10.2004)
(http://www.scipol.unipd.it/didattica/MatrerialiOnLine/dallazuanna/Present_anf_Future.pdf, 24.11.2003)
3. What is behind this decline of population
The reason for this decline is that birthrate is below replacement level in all over Europe. This means that women don’t birth children like they have in the past. One reason for this is that women don’t settle down after graduation and start plan their family like they used to. Nowadays women have higher and higher educations and they are heading up towards high level professions. They don’t have time to birth and raise children.
Major change in family arrangement, a fall in birthrate, couples living without marriage, a delay of childbearing and an increase in the instability of marriage are explanations to this decline in birth rate.
In addition, Europe has experienced a continued decline in mortality. The death rate is also dropped in Europe. In the future life expectancy is more likely 85 years. Low fertility and low mortality leads in to increasingly declining and ageing of population in the near future.
(http://www.vaestoliitto.fi/tiedotus/sisaltosivut/2001/EPCwunsch.htm, 24.11.2003)
5. The economic challenges of ageing population in private-sector
Producers of goods and services will face change in private-sector. The number of ageing population is getting bigger every year and they control larger share of assets and income, so it’s obvious that these people form big markets for new products and services.
The older people need different kind of housing arrangement than rest of the people. They have often difficulties in mobility, so they need for example wider doors and smooth access in and so on. There will be also huge demand for health care products and services. The ageing people have more time to spend so there will be demand for leisure activities and tourism. As it is said there mobility is not so good than younger and middle aged people, so there will be need for a transport services.
The condition of the European economy depends in part how European industry reacts for these new demands of ageing people. Can it create innovate solutions to the growing actual and potential needs and demands for older age groups. The challenge to these new demands is not only the private-sector issue; government also has a role to play, both in the development of new technologies and in the creation of markets.
(http://europa.eu.int/comm/eurostat/, 24.10.2003)
4. The economic challenges of ageing population in public-sector
The fact that population is ageing is well known but the consequences to economic effects is harder to predict. There is few major issues that come along with declining and ageing population. These issue are involved health care and pension system.
It is a fact when people get older the demand for health care increases also. Health care services share of gross national product (GNP) is already rising in all European countries (except Sweden and Luxemburg) and it will continue to rise. It is estimated that 65 year old use health care services four times more than average citizen and 75 year old eight times more. The effects reflect on the organization and the management of health services across Europe. This effect has been seen also in Finland when health care organizations seek more efficient methods for the use of available resources. These problems take their share in all areas of public budgets because the money which finances this growth in need of health care is taken away from somewhere else.
(http://www.stakes.fi/etan/ageing.htm, 20.11.2003)
It is certain that in the future there will be smaller workforce available because older people are leaving from working life. Result from this is that tax revenues and social contributions are likely to fall. This leads to situation where retirement-age population will give a lot of pressures to funding of pension systems, especially if payments depend on current contributions (which is the case in most EU Member States). In the near future there is going to lot of difficulties in paying pension without rising of the individual contributions by the future generations. It is also possible that in some cases that the pension system will no longer exists.
(http://www.stakes.fi/etan/ageing.htm, 24.11.2004)
There is some theories that the pension debate is little misleading. It looks like that older aged people are going to live longer and healthier lives. For example French child today has 50% chance to live hundred years. This means that population is in better shape nowadays in old ages as it was in the past. So it could be possible that people at old age could retire later than they are now. It is true when you are old that you are not able to do hard work but there’s no reason why you would not be able to work in economy where brain power counts. Older people often have more knowledge and more cleverness in wide range of jobs. There is only have to be some change’s in attitudes to older people.
(http://transnational.org, 24.11.2004)
There are also some claims that the older people are splitting in two groups. Others have secured their future incomes after leaving in work life with pension planning, pension fund and things like that. So, this people group who has saved money for the future will have it more to spend when they are old. This other group which has not taken the pension planning won’t have so much money to spend when they are retired like other group. The drop in their incomes after leaving work life is significant. They will have problems to pay housing costs, medication and health care, groceries and other things which are necessary cost of living. There is also possibility that this group might have problems to participate in social life. This kind of development will separate the old population in two parts, so there will be income gap between ageing population in the future.
Although it seems that people will live longer and healthier live in Europe and that way participate in work life in older age, there is still going to be labour shortage. When this decreasing number of senior people is mixed up with the low birth rate there will no workers in the near future. Still many countries are lowering the retirement age in Europe. It would help more the economy if the ageing people could participate more in work.
(www.sitra.fi, 24.11.2003)
Immigration can play a big role to help Europe to handle it’s labour shortage, but there is concerns how immigration could change destination country’s economy. The wage income could fall in the destination country and rise in source country. There is also concerns that the destination country’s local population unemployment rate will rise. Immigrantion can but pressures on public finance. The question is that will it reduce costs on social welfare, education and helth systems because these cost are compensated by higher tax payment. This factor influences governments policies concerning immigration.
(http://www.oecd.fr/searchResult/0,2665,en_2649_201185_1_1_1_1_1,00.html, 24.11.2003)
4.1 The extension of working life
The extension of working life is one answer to these economic problems what comes with this demographic development where the ageing population is getting bigger every year.
There is perspective where this demographic change is seen as positive opportunity for Europe’s economy and society. This opportunity is connected in innovative technological and organizational, changes which helps lives of ageing population.
The European Technology assessment Network (ETAN) says in its report The Ageing Population and Technology: Challenges and Opportunities, that innovation can mitigate the economic problems of an ageing population and create new economic and business opportunities in Europe. It has been said before that the answer to these huge economic problems like pension and health care can be in providing change to older population to participate in work in older age. The technological advances can be used to increase participation in work, reduce assistance and health care costs and improve older people’s participation in social life. This will involve new modes of work, new organisational forms, new workplace technologies, and new life-long learning systems for adaptation to new technological demands at work.
New technology and older workers don’t always fit together. At least most of people think so. Employers and managers often feel that young workers accept new technology better than older workers. This has usually something to do with age discriminatory. Research has shown that, younger older people do not learn as quickly as their younger colleagues but they still learn the main knowledge and skills and they do not forget these faster tan younger people. New technology can be switched from being seen as part of the problem to become part of the solution.
If the ageing population is going to be longer in working life as it is today we need also more flexible forms of work organization: flexible working hours, job-sharing, multiple work locations, telework and so on. This will require changes in human resource policy, management of work and also changes in general labour regulations.
(http://www.cordis.lu/etan/home.html, 24.10.2003)
6. bibliography
www.vaestoliitto.fi
http://europa.eu.int/comm/eurostat/
http://www.stakes.fi/etan/ageing.htm
http://transnational.org
http://www.cordis.lu/etan/home.html
http://www.scipol.unipd.it/didattica/MatrerialiOnLine/dallazuanna/Present_anf_Future.pdf
http://www.oecd.fr/searchResult
www.sitra.fi
