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World Bank Document Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Golden Aging Golden Aging Prospects for Healthy, Active, and Prosperous Aging in Europe and Central Asia Maurizio Bussolo, Johannes Koettl, and Emily Sinnott © 2015 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 18 17 16 15 This work is a product of the staff of The World Bank with external contributions. The fi ndings, interpretations, and conclusions expressed in this work do not necessarily refl ect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifi cally reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Bussolo, Maurizio, Johannes Koettl, and Emily Sinnott. 2015. G olden Aging: Prospects for Healthy, Active, and Prosperous Aging in Europe and Central Asia. Washington, DC: World Bank. doi:10.1596/978-1-4648-0353-6. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an offi cial World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party- owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, fi gures, or images. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights @worldbank.org. ISBN (paper): 978-1-4648-0353-6 ISBN (electronic): 978-1-4648-0354-3 DOI: 10.1596/978-1-4648-0353-6 Cover photo: © Lyubomir Bukov. Used with the permission of Lyubomir Bukov. Further permission required for reuse. Cover and interior design: Debra Naylor, Naylor Design Library of Congress Cataloging-in-Publication Data has been requested. Contents About the Authors and Contributors . xv Foreword . xix Acknowledgments . xxi Abbreviations . xxv Regional Classifications Used in This Report . xxix Overview: Golden Aging . 1 Introduction . 1 The Demographics of Europe and Central Asia and Those of the Rest of the World . 5 Mixed Economic Consequences . 13 A Comprehensive Policy Agenda . 21 Notes . 30 References. 30 Part I The Demographic Transition in Europe and Central Asia . 33 Overview . 35 The Demographic Transition and the “Golden Age” . 35 The Effects of Fertility Declines on Aging across the Region . 36 High Rates of Disease and Disability in Europe and Central Asia . 37 Limiting the Rise in Dependency Ratios and Improving Health Outcomes in the Region . 37 Migration Affects Demographics More in the Long Run . 38 Reference . 38 1 The Drivers of Aging in Europe and Central Asia . 39 Introduction . 39 The Aging Populations of Europe and Central Asia . 39 The Effects of Declining Fertility on Aging and Population Growth . 42 The Slower Improvement of Life Expectancy in Europe and Central Asia. 52 The Contribution of Migration to Aging in Some Countries . 56 Toward More Balanced Age Structures over the Next Half-Century . 62 Notes . 71 References . 72 v vi ● Golden Aging 2 Improving Health Outcomes in the Transition to the “Golden Age” . 77 Introduction . 77 Lengthy Disability for People in Europe and Central Asia . 77 Declines in the Health of the Older Population in Some Countries since 1959 . 79 Women’s Unequal Burden of Caring for the Dependent . 81 Cardiovascular Disease and Cancer, the Principal Causes of Premature Death in the Region . 89 Achieving More Healthy Aging in the Region . 92 Notes . 94 References . 95 Part II The Economic Consequences of Population Aging . 99 Overview . 101 Aging and the Economy: Challenges and Opportunities . 101 The Economic Impact of Aging in Europe and Central Asia . 104 Note . 106 References . 106 3 The Macroeconomic Impact of Population Aging . 109 Introduction . 109 The Diverse Effects of Aging on Income and Growth . 110 The Effect of Aging on Savings and Labor Force Participation . 118 The Links between Aging and Public Finances . 136 Annex 3A: Brief Description of the Overlapping Generations Model . 151 Annex 3B: Population Aging and the Labor Force . 153 Annex 3C: Aging and Public Expenditures in Bulgaria in the Base Case Scenario . 158 Notes . 161 References . 162 4 The Effects of Aging on Productivity: Diverse, Not Alarming . 167 Introduction . 167 Transient Effects of Aging on the Productivity of the Workforce . 168 The Stability of the Human Capital Stock and the Labor Force . 170 The Improving Quality of Education . 171 The Skills of Older Workers: Shifting, Not Declining . 178 How Firms Are Adjusting to the New Comparative Advantages. 185 Does Labor Reallocation Become Less Efficient with Aging? . 188 Does Aging Slow Innovation and Technology Adaption? . 193 Does Entrepreneurship Decline with Aging? . 198 The Mixed Impact of Aging on Productivity . 205 Notes . 206 References . 206 Contents ● vii 5 Aging and Poverty and Inequality . 213 Introduction ..
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