Economic and health financing implications of population ageing in the Western Pacific Region

Implementation:

February 2020 to December 2022

Implementing partners:

Lead research institution:  European Observatory for Health Systems and Policies in cooperation with WHO Regional Office for the Western Pacific (WHO/WPRO)

Principal investigator: Dr Jonathan Cylus, European Observatory for Health Systems and Policies

 

Location of research:

Viet Nam, Mongolia, Korea, Japan, Australia and New Zealand

 

Total Budget:
US$ 225,000 (jointly with WPRO)

Background

Population ageing is occuring globally as a result of rising life expectancies coupled with lower fertility and mortality rates.

Population ageing presents economic, public finance and societal challenges. Decision-makers are concerned that population ageing will result in slower economic growth due to reductions in the working age population, and increases in the demands for health and social care, thereby placing fiscal pressure on health and social care systems and on families through carergiving demands. Some of the predicted consequences of population ageing are based on the assumption that, as people grow older, their health and productivity will inevitably decline. However, people have diverse health and functional abilities. In addition, governments have many policy tools to prevent adverse outcomes.

The European Observatory on Health Systems and Policies, in collaboration with the World Health Organization Centre for Health Development (WHO Kobe Centre) and the WHO Western Pacific Regional Office carried out a series of analyses for the Western Pacific Region. The Western Pacific Region encompasses countries with some of the most rapidly ageing populations covering over a third of the world’s population 65 years and older. This number is expected to double by 2050.

Two sets of six country reports cover a diverse mix of countries in the Western Pacific Region. The reports explore how promoting health of older people of working age can benefit the economy. The reports also explore how changes in the age structure of the population will affect future health expenditure patterns.

Goal

  1. To study the effects of age and demographic structure on health expenditure trends in six countries (Viet nam, Mongolia, Korea, Japan, Australia and New Zealand).

  2. To study the role of health and disability and how they modify the effects of population ageing on economic outcomes (in the same six countries).

Methods

  1. For each of the six countries, United Nations population data will be used to quantify the likely contribution of population ageing to health expenditure growth in the future. Each report will explore possible health spending by age profiles using actual country data, where available.

  2. For the six countries, regression analysis will be used to estimate the links between health and disability at older ages and economic output, labour force participation and/or other related indicators. Publicly available data will be used from the International Labour Organization (ILO), Institute for Health Metrics and Evaluation (IHME), and the World Bank. We will develop short country reports based on the findings from these models, applied to country-specific data and scenarios.

Results

Simulations predicted that improvements in health among people of working age could lead to increases in the growth of GDP. These results were observed for simulations carried out in several different country contexts.Taken together, the reports indicate that there are many opportunities for people to age in good health and that healthy ageing can contribute to the economy.

Publications

How does healthy ageing affect economic growth in Vietnam? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.

How does healthy ageing affect economic growth in Australia? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.

How does healthy ageing affect economic growth in Korea? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.

How does healthy ageing affect economic growth in New Zealand? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.

How does healthy ageing affect economic growth in Mongolia? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.

How does healthy ageing affect economic growth in Japan? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.

How will population ageing affect health expenditure trends in Australia and what are the implications if people age in good health? The economics of healthy and active ageing series: new evidence for the Western Pacific Region. Copenhagen: World Health Organization, 2020.