A new report from the World Bank looks at how central European and Baltic countries are aging differently to the rest of Europe and makes suggestions for policymakers. The lead author, Emily Sinnot spoke to New Europe.
What’s different about the aging patterns? “They’re aging because the younger generations are shrinking, due to declines in fertility, and migration, mostly to richer EU member states. And what we’re not seeing is an increase in life spans—so life expectancy has not increased the way it has in other EU countries,” notes Sinnot.
The disparity is striking, she says. “What we see is a very large inequality of health outcomes in central Europe and the Baltics, and reducing this inequality will really be key to achieving convergence in life expectancy and better health.”
There are positive signs in the data. “they’ve begin to reduce deaths due to heart disease through behavioral change on the parts of individuals, reducing behaviors like smoking and alcohol use, and also through better detection by health systems of underlying risks, factors, and treatment.”
She adds, “Convergence in health should be as important as income as these economies age, because longer and healthier life spans should be enjoyed by people in every country.”
While there are large economic differences between these states and wealthier ones, Sinnot stresses, “These countries have converged in income terms for the first time since the industrial revolution and they had very high growth performance in the last 10 years.”
The economist also says that migration is a very positive economic factor, with remissions sent back to poorer countries, but notes, “Many of these countries that we’re dealing with are quite small, so it can be important to be abroad, get experience, gain knowhow, and bring back investment and ideas to your own country. So making the most out of your diaspora is incredibly important.”
Sinnot adds, “The exchange of ideas amongst populations in Europe is, after all, one of the big advantages of the European Union.”
Fertility is another major change alerted by the report, “There has been a rapid decline in fertility that we’ve seen since the early 90s. Many countries moved to women having 1.3 children from 1.8 or 2 in the 1990s, and this implies a decrease in 35% in each generation. So this is really a big factor in aging in these countries.”
Noting that fertility is not a comfortable topic for many people, Sinnot adds, “Many countries moved to women having 1.3 children from 1.8 or 2 in the 1990s, and this implies a decrease in 35% in each generation.”
She adds, “Most people say they want two children, but those two children are not appearing.” While the first child is born, “The decision to have the subsequent child seems to be blocked—there seems to be some obstacle there.”
The obstacle isn’t surprising, it’s the economy. The solution is also obvious, “Improving the situation of families through tax and benefit systems, through providing childcare, can help compensate for the added cost of having a child,” lists Sinnot, adding, “what’s important is to reconcile work and family life, the reintegration of women into the workplace after having the first child. If that’s difficult, it seems people may not expand their families further.”
It’s not just a women’s issue, “What we find is that it’s the stable improvement of both the man and the woman that is key to the decision to have a second child,” says Sinnot.
Recognising that there will be fewer people of working age, she adds, “We look at ratios of active to inactive in the population, and we find that there is actually a lot of room to increase activity; not even for people above 65, but in many countries there are large groups of people, particularly women, those over 45, and youths, who are currently not working.
“What we find is by increasing female participation towards male participation rates and bringing people into the workforce from 45 onwards, and making sure that people aren’t leaving the work force, dependency ratios can actually stay pretty stable up to 2030, and not reduce that much afterwards.”
She also is concerned that in the countries studied there wasn’t much wealth in the hands of the over 50s, but “younger generations are saving more, and are better off, and this is what is different from the wealthier EU countries, where you often find the opposite scenario.”
She continues, “In terms of pensions, many of the central European and Baltic countries are small spenders at the moment relative to other EU countries, but key choices and trade-offs will have to be made.”
There are reasons for optimism, says Sinnot, “Aging is not necessarily going to be bad for these countries,” if they take action. Her ideas are getting more people into work, preparing pensions and healthcare systems and business also needs to prepare for a workforce that will work longer, but healthier.
The report can be downloaded here (pdf)
http://www.neurope.eu/article/europe-aging-unequally-bringing-problems