This article appears in the May 2000 edition of the Catholic Medical Quarterly

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Old age and the economy

by Agneta Sutton
Head of Research, Centre for Bioethics and Public Policy


We live in an ageing world: this applies to most parts of the world and not just to the industrial countries.

Ageing trends

The oldest countries in the world, in terms of population age structures, are Italy, Greece, Sweden, Belgium and Spain, where between 21% and 22.5% of the populations are aged 60 and over.

In the UK the figure is in the 20_21% bracket and in the United States about 17%. The low American figure may seem strange as the United States is generally regarded as one of the richest countries of all (surpassed on a GDP per capita basis only by Luxembourg, according to recent OECD figures). The explanation is no doubt to be found in the fact that the difference between rich and poor is very marked in the United States. This said, the largest proportion of the very old, aged 75 and over, are to be found in the United States as well as in China, India and Japan.[1] In industrialised parts of Asia the figure is about 15%. In other parts the figure is quite different. African countries, of course, fall well behind in this league table. While most parts of the world are graying, there are some stark exceptions.

Ireland too has a relatively young population, but the reason for this is quite different from that for the demographic situation in Africa. In Ireland families still tend to have more children than in the rest of Europe, while people live longer and healthier lives than in the past. The situation is totally different in Africa.


The stark exception

In Africa the ageing patterns are greatly distorted by the enormous impact of AIDS. Sub_Saharan Africa is by far the worst affected area. Over two_thirds of all people infected with HIV live in African countries south of the Saharan desert: the region accounts for 83% of all deaths from AIDS.[2]

In many sub_Saharan cities more than a quarter of the young arid middle_aged are infected with HIV. Globally, 6 out of 10 HIV_infected men, 8 out of 10 HIV_infected woman, and more than 9 out of 10 HI V_infected children live in sub_ Saharan Africa.

Not all parts of sub_Saharan Africa are equally affected: the epidemic is shifting south. West Africa is less affected than east Africa; the bulk of new infections occur in east and southern Africa. Most hard_hit is southern Africa. In Botswana, Namibia, Swaziland and Zimbabwe, between 20% and 26% of people of child_bearing age (15-49) are living with HIV or AIDS. Worst affected is Zimbabwe, where, in some areas, up to 50% of pregnant women test HIV_positive[3] Since HIV is spread mostly through heterosexual contact in sub_Saharan Africa, women are heavily affected in this part of the world.

This is a world where the very old care for the young and where the young have to fend for themselves. Here children must live with the widespread fear of becoming orphaned.


Demographic trends

In other pans of the world the populations are becoming older. But there is no longer fear of over population. The United Nations Population Report. published in 1998, shows that earlier population_growth projections have been wide off the mark and that population_growth rates are falling all over the world, not least in the developing countries and not just only in those developing countries plagued by AIDS.

The world population, which is now about 6bn, is growing by 81m a year, compared with 87m a year in 1985_1990. If the decline in the growth rate continues, it will certainly not have reached 10 bn by the middle of the this century as earlier predicted.[1] Indeed, it may never reach that figure.

Families are shrinking all over the world. The average fertility rate across the world is currently 2.9 children per woman. The figure is falling fast with changing life styles, in Africa sadly also due to AIDS and, indeed, war. In India the fertility rate is now down to 3.4 children per woman, compared with about 1.7 in the United Kingdom.

According to the UN report, the fall in fertility rates is due largely to ‘more effective contraception’. But this is too facile an explanation. The major reason why people have smaller families is not to be found in the instrumental means by which this is achieved, but rather in changed social attitudes. These are to be explained by several factors. One is migration from rural to urban areas where families cannot live on the produce of their former land and are confined to cramped housing conditions. Another explanation is to be found in better female education and the altered expectations of women that go with it.

Yes, the demographic patterns of the world are rapidly changing. This trend towards smaller families and ageing populations will have various social implications affecting countries economies. Moreover, since women live longer than men, the problem of the elderly is above all a problem of elderly women.

Elderly women, widows or spinsters, have always been among the poorest and most disadvantaged in human society. But it is an uncivilised society that does not want to care for its poorest, weakest and most disadvantaged members. But how are they to be cared for and where are the moneys and the carers to come from? In most so_called developed countries, politicians are becoming increasingly worried about the growing proportion of non_wage earners in society, who cost the health services ever more the older they become.


Burden of disease and disability

In Britain, as elsewhere, the increasing number of elderly is becoming an important public health issue. Even if the majority of older people are in fairly good health, they are responsible for a greater than average use of the health care services. The kind of health problems that affect adults, such as depression, heart disease, cancers and mental dis ability in the form of dementia, are on the increase worldwide, while, on the other hand, conditions affecting children are on the decrease.[4]

The problem concerning the care of the elderly, who are no longer capable of independence, is the twofold question of who is to provide long_term care for them and of how it is to be financed. Even if many of the old have become ‘institutionalised’ and more and more nursing homes are being built, long_term care remains, in many cases, a family task, which means that the burden of this kind of work falls mainly on women, often the daughters of those in need of care. But as people live ever longer, families are not going to be able to cope alone, especially not with relatives suffering from Alzheimer’s or from other forms of senile dementia.


Mental illness and neurological conditions: leading causes of disability in the 21st century

Hence the rapid ageing of the global population is set to pose serious challenges to the world s health care systems and to force many difficult decisions about the allocation of scarce resources. It is estimated that today already 29m people suffer from senile dementia, mostly Alzheimer's.[5]

Definition of dementia

Dementia is the global impairment of higher cortical functions, including memory, the capacity to solve the problems of day_to_day living, the performance of learned perceptuo_motor skills, the correct use of social skills and the control of emotional reactions, in the absence of gross clouding of consciousness. The condition is often irreversible and progressive.

Source: Royal College of Physicians Committee on Geriatrics, ‘Organic mental impairment in the elderly’, Journal of Royal College of Physicians of London, 1981, vol. 15, pages 141_167

According to projections in the World Health Report 1997 of the World Health Organisation (WHO), dementia, in particular Alzheimer’s, is likely to become one of the most common causes of disability in the elderly in the 21st century.[5] For the risk of developing the condition increases sharply at age 60 and over. And, since women live longer than men, more women than men are likely to be affected [6]


It is not difficult to imagine that, in countries where about 1 in 5 unborn children is aborted, there are likely to be louder and louder demands for euthanasia for those with dementia who refuse to die. In the Netherlands, where euthanasia has been practised for many years, such demands are becoming increasingly common. What has happened in the Netherlands is a gradual change of standards. It started with euthanasia on request in the case of terminal illness and unbearable physical suffering. Then, as time went by, matters gradually changed. Non_voluntary euthanasia became more and more acceptable. There are tales to the effect that elderly people are scared to go into hospital.

In the Netherlands today even a physically healthy but depressed person could request and be granted euthanasia. This means that an elderly person who is depressed because he or she feels that he or she is a burden on others, or feels unwanted, might well request and be granted euthanasia.

If euthanasia were to be declared legal in other countries - and it looks as if this is happening in Belgium and France - the same could happen there.


Health care provisions for the sick or disabled elderly

More and more nursing homes are being built. However, increasingly, governments, health care services, social services and elderly people are all favouring some form of out_patient community care. This is to be explained by a number of factors. Consideration of cost is a prime one. Institutionalised care tends to be more expensive than community care. There is also a desire among the elderly themselves not to be ‘institutionalised’ since institutions tend to depersonalise.

According to statistics collected by the European Commission, there is a strong preference among both EU governments and EU citizens for community_based care.[7]

This community care does not necessarily rely on family members alone, but could also involve paid home_helps, volunteers and self_help groups. Yet, insofar as families are relied upon to provide so_called community care, the fact that families are becoming smaller means that the elderly, who are being cared for within families, are being cared for by a smaller and smaller number of family members, mostly women. If they are not cared for by their family but remain at home, receiving outside help, they will probably be living alone. More and more elderly people are, indeed, living alone. In the future there will be an increasing demand for home_help services.

There will always be a proportion of the elderly or old who really need residential care. Such care may come in different forms. There is sheltered housing where people live in separate apartments but share various facilities. This may be described as either a form of community care or residential home care. There is also the provision of residential homes for people who can no longer maintain independent households, as well as nursing homes for those who need nursing care.

The big question is how are these different services to be funded? How will governments cope with the situation? The cost implications of ageing populations relate not only to the health care for the elderly but also to pensions and social services. These costs create political pressures raising the question how - and how much - to provide for the elderly. For what might be called ideological reasons, different countries have adopted different policies; some have adopted a clear anti_welfare attitude, others seek to maintain welfare systems set up when demographic trends were quite different.

Britain, as we know, has a comprehensive social welfare system with health services, in principle, for all, though treatment under private health insurance, or paid for by private means, exists alongside the free services provided by the state system. The National Health Service (NHS) is funded by central taxation: the Department of Health is responsible for the allocation of resources to regional health authorities. Interestingly, in the past twenty years there has been a 50% reduction in long_term NHS beds, coupled with a move towards means_tested nursing homes where patients pay fees[8].

What is the situation for health care financing like in the rest of Europe? According to a survey undertaken by researchers from the University of Sheffield, there is a strong preference within the Euro pean Union for either a compulsory public insurance scheme (as, for example, in Germany or France) or a public service financed through taxation (as in Britain ).[7] That is to say, Europe remains largely in favour of public, as opposed to private, financing of the care of the elderly.

The United States
The situation is different in the United States. The insurance_based and market oriented health care system of the United States leaves about 16% of the American population without any health care cover. Medicaid looks after some: this is a programme combining federal and state aid for the poor. Medicare is a different and purely federal programme which serves some 38m among the elderly. It is being reshaped by trimming payments to hospitals in order to promote home_help and nursing_home schemes and also to provide insurance for some 5m uninsured children.[9]

As to private insurance schemes, about 75% of workers are now insured by employers under corporate Managed Care schemes. Many of the elderly have also moved away from traditional insurance to these cheaper Managed Care programmes.[9] The private cost_conscious Managed Care companies are increasingly used not only by employers paying for insurance for employees, but also by the public authorities to keep Medicare and Medicaid spending under control. But the cost_saving schemes in the Managed Care system are far from perfect. By restricting reimbursement, many Managed Care companies are said to discourage patients from seeking treatment, especially for mental health problems. The most serious accusation laid against the Managed Care system is that, in order to save costs, many of the companies involved are seeking to avoid the provision of cover for expensive patients.[10] Obviously, this kind of reluctance affects especially the elderly and chronically ill.

Concerns about long_term care in the United States

Source: American Demographics, June 1997.

Japan, which has a partly state_funded and partly insurance_based health system, is introducing a public long_term care insurance scheme. The scheme will cover institutional and home care for people over 40 with age_related diseases such as dementia.[11] Half of the funding will come from monthly premiums imposed on those aged over 40, 10% will have to be paid by the patients themselves (though special arrangements will be made for the poor), and the rest will be paid by the state from general taxation.

A new so_called Gold Plan was implemented in 1995 in order to upgrade and redesign the health and welfare system caring for the elderly. The aim is to provide cheaper care by promoting a shift from hospital to community services and nursing homes. As the costs are carried by the local authorities, services vary from region to region.

But even if the authorities are encouraging nursing home care in place of hospital care for the elderly mentally and physically disabled, traditional attitudes in Japan do not favour nursing homes. The elderly would rather go into hospital than stay in a nursing home, because they find it shameful to accept basic. care from anybody outside the family. If they go into hospital they can al least claim that they need specialist treatment. In Japan today 50% of the elderly live with their children, a very high proportion by Western standards. But, compared with 80% twenty years ago, the proportion represents a big drop and testifies to a change in attitudes.

Retirement, pensions and old age work schemes

If social integration of the elderly is something that we should aim for, then it is important for our societies to make sure that the elderly have financial security, But the UK is not a signatory of the Social Charter, which was adopted by the other EU mem ber states at the meeting of the European Council in Strasbourg in December 1989. According to this charter, every worker of the European Community should be able to enjoy a decent standard of living at the time of retirement. British state pensions are indeed low by continental European standards. This results in pensioners. who are not covered by supplementary schemes (see below), suffering from a considerable degree of income inequality.

Another kind of inequality is linked to gender. Overall, the pensions paid to women are lower ihan those paid to men. in Italy women receive about 67% of the average male’s pension payment. In Germany they receive much less. These differences tend to reflect the fact that women spend more time working in the home than men and, therefore, are more often part_time outside the home.[12]

In most European countries there are normally two tiers of pensions: a basic pension scheme (or schemes) and supplementary schemes. Basic pension schemes are usually financed on a pay_as_you go basis which will lead, across Western Europe, to major financial strains later this decade because of demographic trends (as the postwar 'baby_boom' generation starts to leave the labour force in large numbers). Supplementary schemes, on the other hand, tend to be funded through the accumulation of invested capital rather than organised on a pay_as_you_go basis. Britain stands out as the European country where funded supplementary schemes are by far the most important. The Netherlands stands out as the country with a plurality of basic schemes run, by employers and trade unions, on an entirely funded basis. In this respect, at least, Britain and the Netherlands are relatively well positioned in their different ways to deal with the impending demographic strain and its effects on the aged.

Other ideas for helping the old relate to indirect income support in the form of free public services. Thus, for example, there are totally free health care services in Britain for those who have reached pension age. In Ireland the rail services are free for those who have reached pension age, and in various European countries old age pensioners can attend leisure activities and receive home_help at reduced rates.

The burden of providing pensions and free services for the growing numbers of the elderly is set to increase, Politicians and legislators will have to think very carefully about how best to share that burden out among society at large.


Early retirement

The situation is being complicated by the fact that retirement is no longer necessarily correlated with a certain pension age. Early retirement has become more and more frequent in Europe, despite the fact that people live longer and are healthier than ever before, The practice of early retirement is one that may have to he reversed on account of the relative shrinking of the working_age population. Indeed, there are signs of it being reversed already. But trends in this respect depend very munch on whether economics are experiencing strong growth or not.

In any case, the growing number of elderly may not be able to live on the financial support that a shrinking number of workers provide through pay-as_you go pension schemes. Partial rather than full retirement may be one kind of solution and an increasingly common option.

Another possibility, at least for social rather than financial well_being, is voluntary work. Belgium, the Netherlands, Sweden and Britain have today the highest relative levels of elderly voluntary workers[13]

Both partial retirement and voluntary work mean involvement in the community and active participation in the productive life of society. Not only does this help the economy but it is a stimulus as well for the individual who feels useful and integrated within society. Western culture places a high price on autonomy. The feeling of being independent and contributing to society is important for psychological well_being.

Voluntary work and partial retirement may come in different forms. In some countries a high proportion of children are cared for by their grand_parents, while their parents are at work. For example, in Flanders in Belgium, one_quarter of the children of working parents are looked after by their grand parents.[13] Various countries have seen a growth in the number of older management consultants working in industry. In Ireland, for instance, the Industrial Development Authority (IDA) has introduced a scheme called ‘Mentor’, providing a helping hand for small businesses.

Most countries have also promoted self_help groups for the elderly. In the future, the elderly may well need and be willing to do more to help themselves and other elderly persons. This may be done by forming not only voluntary self_help groups and groups for social activities but even business corporations and political parties. The elderly may also run professional community services, residential homes, schools and open universities.


The role of the Christian community

As Christians, we have a special role to play in promoting respect for the elderly and encouraging and helping elderly people to take part both in society and in the life of the Church. There is a special responsibility to ensure that the old do not feel that they are a burden but, rather, be encouraged to maintain their self_esteem, even when they are dependent on others. Together the sick, the poor, children and the elderly provide the Christian community with a welcome opportunity to show solidarity and care for the weak.



  1. US Bureau of the Census, International Programs Center, International database.

  2. UNAIDS/WHO, Report on the Global HIV/AIDS Epidemic, June 1998, page 10; Monitoring the AIDS Pandemic (MAP) Network, The Status and Trends of the HIV/AIDS epidemics in the World, Geneva, 1998, page 2.

  3. UNAIDS/WHO, AIDS Epidemic Update, December 1998, pages 3_4.

  4. Christopher P Howson, The Ageing of the World Populations: Implications for Economics and Health’, Dolentium Hominum, 1999, No. 1, pages 30_33.

  5. WHO, The World Health Report of 1997: Conquering Suffering and Enriching Humanity.

  6. WHO and The World Bank: Global Burden of Disease, ed. Christopher J L Murray and Alan D Lopez, 1996, page 284.

  7. Alan Walker and Tony Maitby, Ageing Europe, Buckingham, Philadelphia, 1997.

  8. F Creed et al., ‘Cost_Effectiveness of Day and In Patient Psychiatric Treatment. Results of Randomised Controlled Trial’, BMJ, May 10th, 1997, pages 1381_85.

  9. Agneta Sutton, 'Profile - The Burden of Mental Disease’, EIU Healthcare International, 4th Quarter, pages 101_2.

  10. Larry R Churchill, ‘Market Meditopia: A Glimpse at American Health Care in 2005’, Hastings Center Report, January_February 1997, pages 5_6; Julie Rovner, ‘Survey Results heat up Managed Care Fight in US Congress’, The Lancet, November 15th, 1997, page 1456.

  11. Yumiko Arau, 'Insurance for Long_term Care Planned in Japan , The Lancet, December 20th_27th, 1997, page 1831, Jonathan Watts, ‘Caring for Japan’s Elderly - Mission Impossible?’, The Lancet, September 5th 1998, page 798.

  12. Walker and Maitby, op.cit., pages 36_68.

  13. Ibid, page 36.

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