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Population Aging and Its Economic Costs: A Survey of the Issues and Evidence*

Published online by Cambridge University Press:  29 November 2010

Frank T. Denton  and
Byron G. Spencer
Frank T. Denton
Affiliation:
McMaster University
Byron G. Spencer
Affiliation:
McMaster University
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Abstract

The aging of the population is expected to result in substantial increases in the costs of maintaining health care and pension programs, and that is a source of widespread concern. However, a proper assessment requires that attention be given to all categories of government expenditure, including education and others associated with younger age groups, and not just those associated with the older population. It requires also that privately provided goods and services be considered, since their costs must be charged against the same national income as publicly provided ones. Beyond that, it is important to recognize that population change affects not only the demand side of the economy, but also the supply side — the economy's productive capacity. An important conclusion is that while other influences will no doubt play a role, demographic effects by themselves are likely to cause government expenditure (all categories, all levels of government combined) to increase by no more than the rate of growth of the population, and by less than the rate of growth of the gross domestic product. Taking public and private costs together, and assigning appropriate weights to different age groups, the overall “dependency ratio” can be expected to remain at its current low level for another decade and a half or two decades, and then to rise as the baby boom generation retires in large numbers. However, the projected future ratio never reaches the levels of the 1950s and 1960s. Although the overall “burden” of population aging is manageable, major adjustments will be required in the coming decades, especially in the area of federal/provincial cost sharing. For the most part, though, the effects of population aging are predictable, slow, and some time off.

Résumé

On prévoit que le vieillissement de la population entraînera une augmentation substantielle du coût des programmes de santé et de retraite, et cette hypothèse est une source de préoccupation largement répandue. Cependant, une évaluation objective exige que l'on étudie toutes les catégories de dépenses gouvernementales, incluant l'éducation et les autres programmes destinés aux groupes d'âge plus jeunes, et non seulement aux programmes destinées aux couches plus âgées de la population. Il faut aussi tenir compte des biens et services produits par le secteur privé, puisque leurs coûts doivent être imputés au même revenu national que ceux produits par le secteur public. Au-delà de cette question, il faut réaliser que l'évolution de la population affecte non seulement la demande économique, mais aussi l'offre à la capacité de production de l'économie. Il est donc important de constater, en dépit du fait que d'autres influences auront certainement un impact sur la situation, que l'augmentation des dépenses gouvernementales (toutes catégories confondues et pour tous les paliers de gouvernement combinés) attribuable aux effets démographiques ne devrait pas être supérieure au taux de croissance de la population, tout en restant inférieure au taux de croissance du produit intérieur brut. Si l'on regroupe les dépenses publiques et privées et que l'on assigne à chaque groupe d'âge le poids relatif approprié, on peut s'attendre à ce que le «taux de dépendance» reste à son faible niveau actuel pendant encore 15 à 20 ans, avant d'augmenter graduellement au fur et à mesure que les membres de la génération du baby boom commenceront à prendre leur retraite en plus grand nombre. Toutefois, le ratio projeté n'atteint jamais le niveau des années 50 et 60. Bien que le «fardeau» du vieillissement de la population soit contrôlable, des ajustements majeurs devront être apportés au cours des prochaines décennies, en particulier au plan du partage des dépenses entre le gouvernement fédéral et les provinces. Les effets du vieillissement de la population sont toutefois en grande partie prévisibles, lents et encore assez lointains.

Keywords

PopulationAgingEconomic Costs.Vieillissement de la populationcoûts économiques.
Type
Articles
Information
Canadian Journal on Aging / La Revue canadienne du vieillissement , Volume 19 , Issue S1 , Summer/Été 2000 , pp. 1 - 31
Copyright
Copyright © Canadian Association on Gerontology 2000

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