Population Aging: From Problem to Opportunity
The impact of population aging has been at the centre of policy debates since the mid-1990s. With an expected reduction in the size of the workforce, can society afford the added pensions and health-care costs associated with the retirement of the baby-boom generation? This was the main question behind the analytical work carried in the early phases of the Policy Research Initiative (PRI)’s horizontal work on population aging in Canada.
Recently, however, there has been a growing sense that the demographic trends are providing not only potential problems, but also unique opportunities. To use a popular expression, we can speak of potential convergence of policy objectives.
As announced in the previous issue of Horizons, the PRI has recently launched several new horizontal projects, one of which is entitled Population Aging and Life-Course Flexibility. While previous horizontal work in the area has focused on the fiscal impact of population aging, the current effort takes a totally different approach. Its focus is on exploring how greater life-course flexibility might address the potential labour shortages associated with the coming retirement of the babyboom generation and, at the same time, provide people with more choice as to how they allocate work, learning, caregiving, leisure, and other activities of life, over a lifetime.
This issue of Horizons features several contributions touching on the consequences of an aging population. An introductory piece by Peter Hicks, who is co-ordinating the PRI research work in this area, describes how recent gains in healthy lifetime years provide a large pool of underused time that could be used more productively and creatively. With the proper adjustments in government policies, win-win outcomes are possible, with gains emerging both with regard to output and in terms of the flexibility Canadians can enjoy with respect to the organization of their learning, working, caregiving, and leisure activities over the course of a life.
Building on his experience with the Organization for Economic Co-operation and Development, Peter Hicks also contributes a description of the quite startling shift in international thinking on the policy implications of aging. He provides further context for the Canadian policy debate, and some interesting insights on policy thinking at the international and national levels.
An excerpt from David Cheal’s introduction to Aging and Demographic Change in Canadian Context, the latest publication in the PRI’S Trends Project, describes some earlier PRI work that set the stage for the current project. The article reminds us that many concerns around population aging can be exaggerated, and some “conventional wisdoms” need to be challenged. One example of exaggerated concern is the belief that a growing volume of older people with heavy healthcare needs will create a huge and unsupportable demand for costly medical services. Research done at Health Canada, and reported here in an article by Sarah Hogan and Jeremey Lise, shows that even though people are now living longer, longevity is not a key driver of health-care costs. The article contains several other surprising results regarding the effect of aging on health-care sustainability and on retirement.
Good statistical and analytical tools are absolutely essential to the conduct of quality policy research. Geoff Rowe from Statistics Canada describes a powerful analytic tool, LifePath microsimulation modelling, which appears destined to revolutionize policy research dealing with life-course decisions and transitions from one life stage to another. This model is a central piece of the PRI project on population aging and flexibility of the life course. In a shorter note, Christian Dea, Maxime Fougère, and Bruno Rainville at Human Resources Development Canada describe a strategy for developing new statistical information to support population-aging policies.
The reader will also find other PRI projects well represented in the current issue. André Downs, the PRI lead on the North American Linkages (NAL) project, has contributed a piece describing the refocused NAL research agenda that was discussed with participating departments in various meetings in April and May. Another article outlines preliminary ideas on the content of a strategic framework that could guide the research work conducted under the New Approaches for Addressing Poverty and Exclusion project. Recent work on sustainable development is also well represented under the Research Briefs and Eyewitness Reports headings.