Economic Consequences of Ageing [Completed]

The project combines inputs of demographers and economist to update our knowledge on the economic effects of ageing and to provide new information on specific thematic areas. Typical questions to be answered are: How does population ageing affect individuals’ economic conditions? How economic incentives related to active ageing influence behaviour? How do they affect public finances? What will an older population look like in terms of household structure?

Economic Consequences of Ageing is a subproject of a large international research undertaking Mobilising the potential of active ageing in Europe or MoPAct, which is coordinated at the Deparment of Social Studies at the University of Sheffield. It brings together 31 universities and research institutes from 13 European countries.

The first thematic study on the subproject updates, improves and expands projections of the future demographic trends of selected Member Countries, especially household structures and gender specific mortality rates at old age. The results help to predict the need for and supply of informal care, the adequacy of retirement incomes and the demand for life-time annuities.

The next study analyses how specific policies, implemented in Finland, but applicable also in other countries would influence formal and informal labour supply of elderly citizens and sustainability of public finances.

Third thematic study simulates with an EU-wide economic model how tax policy and on-the-job-training enables and stimulates employment and consumption of elderly citizens. It also provides macroeconomic outcomes of such policies.

Etla leads the subproject and contributes to it also by analysing the effects of mortality, fertility and migration on public finances and by studying the interaction of changing household structure, longer lifetimes, households’ economic decisions and policies aiming to support labour supply.

Etla participates also to two other subprojects. In one of them, Pension Systems, Savings and Financial Education, Etla analyses the interaction of pension system rules, longer lifetimes and retirement.

In the other, Social Support and Long Term Care, Etla contributes by studying the opportunity costs and choices of a person near retirement age, who needs to use time for informal care and considers thus whether to retire and which route out of employment one should choose.

MoPAct website

Starting year: 2014
Year of completion: 2017
Person in charge: Valkonen, Tarmo
Funding: Euroopan unioni (Tutkimuksen 7. kehysohjelma)