1
Introduction

Aging populations are generating both challenges and opportunities for societies around the globe. Increases in longevity and improvements in health raise many questions. What steps can be taken to optimize physical and cognitive health and productivity across the life span? How will older people finance their retirement and health care? What will be the macroeconomic implications of an aging population? How will communities be shaped by the shift in age structure? What global interconnections will affect how each society handles the aging of its population?

GRAND CHALLENGES OF OUR AGING SOCIETY

To address these questions, the National Academies organized a symposium called “The Grand Challenges of Our Aging Society,” held in Washington, DC, on May 28-29, 2009. Presentations in the fields of biology, public health, medicine, informatics, macroeconomics, finance, urban planning, and engineering approached the challenges of aging from many different angles. The presenters reviewed the current state of knowledge in their respective fields, identifying areas of consensus and controversy and delineating the priority questions for further research and policy development. The overall goal of the symposium, as Judy Salerno of the Institute of Medicine described in her welcoming remarks, was to help the National Academies determine how best to use its resources so as to contribute to an evidence-based dialogue on population aging that



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 1
1 Introduction A ging populations are generating both challenges and opportuni- ties for societies around the globe. Increases in longevity and improvements in health raise many questions. What steps can be taken to optimize physical and cognitive health and productivity across the life span? How will older people finance their retirement and health care? What will be the macroeconomic implications of an aging popula - tion? How will communities be shaped by the shift in age structure? What global interconnections will affect how each society handles the aging of its population? GRAND CHALLENGES OF OuR AGING SOCIETY To address these questions, the National Academies organized a sym- posium called “The Grand Challenges of Our Aging Society,” held in Washington, DC, on May 28-29, 2009. Presentations in the fields of biol- ogy, public health, medicine, informatics, macroeconomics, finance, urban planning, and engineering approached the challenges of aging from many different angles. The presenters reviewed the current state of knowledge in their respective fields, identifying areas of consensus and controversy and delineating the priority questions for further research and policy development. The overall goal of the symposium, as Judy Salerno of the Institute of Medicine described in her welcoming remarks, was to help the National Academies determine how best to use its resources so as to contribute to an evidence-based dialogue on population aging that 

OCR for page 1
 GRAND CHALLENGES OF OUR AGING SOCIETY will “shape policies and programs that make the most of the benefits of enhanced longevity into late life for both individuals and society.” The symposium consisted of six panels. The first panel addressed sci - entific research on the biology of aging and frailty, with further attention to health care at the end of life. The second panel concerned the steps that individuals and society can take to enhance healthy aging, ranging from healthy behaviors to new technologies. The next two panels addressed economic issues, including macroeconomic effects of aging populations and concerns about income security and health care financing. The final two panels turned to issues of social institutions and policies as well as the response of communities to aging populations. In the final group discussion, several participants offered their perspectives. Appendix A is the symposium agenda. Appendix B is a list of recent National Acad- emies publications bearing on the topics touched on here. Appendix C provides biographical sketches of the planning committee members and presenters. This report is a summary of the presentations and discussions that took place at the symposium. As such, it is limited to the views presented and discussed during the workshop. The broader scope of issues pertain- ing to this subject area is recognized but could not be addressed in this summary. In addition, as a summary, this document is not a transcript of each panelist’s presentation, but rather a distillation of the themes of their presentations. All statements and opinions in this summary are directly attributable to the workshop speakers. A variety of research opportunities and priorities were identified across the two days of the event. All aim to respond to grand challenges so that an aging society can be good for all members of that society, improv - ing the economic, social, and physical well-being of the aging population while strengthening economies and societies. As speaker Linda Fried affirmed, “If we can redesign societal approaches so that they are both great for people as they get older and great for society because they help bring wisdom and experience of an aging population to bear on unmet social needs, then we could have a new kind of social compact.” INTRODuCTORY REMARKS Ronald Lee Center for the Demography and Economics of Aging Uniersity of California, Berkeley Aging may be considered from three different perspectives: (1) individual aging, (2) population aging, and the (3) global age profile. An individual’s aging has many components, including biological, emotional, and cogni -

OCR for page 1
 INTRODUCTION tive changes as well as different patterns in behavior, productivity, and consumption. Life expectancy has increased, and both health and func - tional status have improved. Individuals are now functionally younger at a given chronological age than older adults were in previous generations. Technological advances have also altered the experience and quality of aging. Population aging in the aggregate—the increasing proportion of elderly in the population—is occurring in industrialized nations as both mortality and fertility decline. As aged individuals in industrialized nations are consuming more goods and services and producing less than midlife adults, the increasing ratio of older adults in the population places a greater burden on the working-age population. This rising dependency challenges the fiscal stability of government programs and also has other macroeconomic consequences. Population aging is occurring throughout the industrialized world. Indeed, most industrialized countries will see a doubling or tripling of their old-age dependency ratios (the number of older adults divided by the number of working-age adults) in this century. The momentous effects this will have on societies and economies can be anticipated, but not entirely known. Institutional and policy responses are also not deter- mined. As Lee observed, “We’re not there yet. We don’t know what it looks like. We can extrapolate from current circumstances, but we don’t have a firm basis of knowing what life will be like, what the macro- economy will be like, how well the welfare state will work, and all of these things in a population that is actually old.” Data from the National Transfer Accounts Project (see http://www. ntaccounts.org) may be used to compare rich countries (using data from the United States, Japan, Sweden, and Finland) and poor countries (with data from India, Indonesia, Kenya, and the Philippines) regarding the age profile of labor income and consumption. Data indicate that entry into the labor force occurs later in rich countries than in poor countries, as more early years are spent in education. Earnings also peak later in rich coun- tries, presumably reflecting returns to experience for workers with more human capital. The drop in labor income is far more precipitous as people retire in rich countries, while labor income continues at older ages in poor countries. Retirement also occurs earlier in rich countries. In the United States, the median age at retirement dropped by 11 years during the 20th century from age 74 to age 63. This trend in retirement age is now reversing, but the recent change is small compared with the earlier larger declines. Thus, at a time when the life span was increasing and dis - ability rates were falling, the length of the work life was shrinking. Rich and poor countries can also be compared in their patterns of consumption relative to earnings across the life span. In poor countries,

OCR for page 1
 GRAND CHALLENGES OF OUR AGING SOCIETY the age pattern of consumption is flat from young adulthood through advanced old age. In rich countries, childhood is one phase of greater consumption, because of investment in education. The other is old age, because of the costs of health care and long-term care. In the United States, several components contribute to consumption expenditures. Data from 2003 indicate that until about age 65, rising consumption is fueled by increasing private expenditure in both private health care and private durable goods. In the United States, after age 65, private health expendi - tures drop as public health expenditures expand. The overall pattern of consumption continues upward, with the cost of long-term care causing a sharp rise in consumption at advanced ages. Overall consumption at older ages in other industrial countries also rises. Trends of aging populations, such as increased old-age dependency ratios, longer life spans and health spans but shorter work lives, and increased consumption despite lower labor income among older persons, are not necessarily troublesome. Yet Lee commented, “It’s hard to avoid worrying that we may just be stumbling into these patterns rather than making informed decisions about how to organize allocation of resources across age.” Public allocations for pensions, health care, and long-term care may be influenced by institutions and programs that were created and shaped in very different historical periods, with very different age profiles, median retirement ages, and consumption patterns. The incen- tives those institutions and programs now generate may be distortional under the new circumstances. Lee closed by proposing six questions for the symposium to consider: 1. Are institutions channeling people’s behavioral responses to longer life and lower fertility in suboptimal ways (e.g., earlier retirement or too little saving)? 2. Will the increase in the old-age dependency ratio be a serious bur- den on the future economy and society? 3. Are U.S. households saving enough for old age? 4. Will aging populations generate increased capital intensity, and will this raise labor productivity and offset the higher dependency burden? Will the savings rate fall? 5. How will rapid population aging in the industrial world affect international trade, financial markets, and migration patterns? 6. What can societies do to maintain or extend healthy and active life in relation to rising life expectancy?