By: Ben Franklin, Head of Economics of Ageing, ILC-UK

Redefining old age as the last 15 years of life would largely solve the ageing problem across the world

A few weeks ago we explored how redefining old age as the last 15 years of life (prospective measure) would change the shape of the dependency ratio for the UK.

To recap, we showed that the prospective measure of age enables us to take account of the substantial gains made in life expectancy over the last century and anticipated progress over the next one. This makes a profound difference to the overall narrative around ageing.

We got a great response to the blog – high readership and a number of comments and questions, including one about whether the story was the same for other countries. Thankfully Sanderson and Scherbov have come to our rescue, calculating prospective old age dependency ratios for all countries of the world which means we don’t have to (which is a relief on a Friday afternoon). All we’ve done is to plot the prospective dependency ratio against the traditional measure calculated by the United Nations (working age – 20 to 64, old age – 65+). As you’ll see, the prospective measure leads to a much flatter overall trajectory, both for the developed and developing countries (and across all regions of the world).

Source: Sanderson and Scherbov (2015) UN Population Projections

Source: Sanderson and Scherbov (2015) UN Population Projections

Source: Sanderson and Scherbov (2015) UN Population Projections

Phew, this means we can all go home right?

By using the prospective measure of age, the ageing problem largely, though not completely, disappears – there is still an upward trajectory as we move towards this middle of this century but it is much flatter than when we use the traditional measure of dependency (65+). But as with the UK example a couple of weeks ago, our society, economic activity and public spending still see 65 or thereabouts as the start of old age. To demonstrate how universal this principal is we’ve taken data on the average timing of labour force exit for all OECD countries (this represents a developed country subset of the world). Average exit across these countries is just 63 for a woman and 65 for a man. And perhaps even more interesting is that fact that between the 1970s and the early 2000s, a time when life expectancy was rapidly rising, average age of exit fell considerably. Indeed, despite incremental rises in the timing of exit since the turn of this century, we still remain way below the average in 1970.

Source: OECD 2015 Pensions at a Glance

Source: OECD 2015 Pensions at a Glance

Where do we go from here?

Life expectancy has risen but we are not fully translating these gains into longer productive lives which is largely due to artificial constraints – such as pensionable ages, employment practises and skills and retraining rather than anything intrinsic about ageing itself. This should provide hope. The “ageing problem” is at least partially solvable, now we must get on and do it.