UN report spotlights socio-economic challenges posed by ageing populations

As the proportion of older persons continues to increase at unprecedented rates worldwide, countries will need to examine and adapt national policies, particularly those relating to pension systems and health care, according to a new United Nations report launched today.

The number of people aged 60 years and older is expected to increase from 670 million in 2005 to nearly 2 billion in 2050, and some 80 per cent of them will live in developing countries, Under-Secretary-General for Economic and Social Affairs José Antonio Ocampo told a press conference in New York to mark the launch of the 60th anniversary edition of the World Economic and Social Survey.

Designed to coincide with the fifth anniversary of the Madrid International Plan of Action on Ageing, and entitled Development in an Ageing World, the 2007 report notes the “profound impact” ageing has on economic and social development. It also offers suggestions for addressing expected challenges relating to national health care and pension systems in the next four and a half decades.

The report emphasizes that pension systems in developing countries are “significantly underdeveloped,” and that without urgent pension reform there could be 1.2 billion people without income security by 2050.

Mr. Ocampo noted that the report presents “very strong evidence” of the association between the development of pension systems and poverty at old age.

“Countries that have very well developed pension systems are also countries that have lower poverty rates of older people, while those countries that do not have well developed pension systems have high poverty rates of older people, and older people are sometimes forced to work beyond their working life,” he said.

While the report does not advocate a one-size-fits-all solution, Mr. Ocampo stressed that future pension systems should aim at universal access, be equitable and ensure enough benefits to avoid old-age poverty.

The report also notes that health and long-term care systems need to be reformed and adapted to fit ageing populations. At the same time, it states that ageing is not the most important factor in driving up the future cost of health care. Rather, rising costs can be attributed to inefficiencies in the delivery of health services, the introduction of new medical technologies, and price increases of pharmaceuticals and health insurance policies.

Mr. Ocampo added that addressing the economic challenges related to ageing will have to be tackled through “a mix of solutions,” which should include increasing the participation of women in the labour force, lengthening the working life and improving worker satisfaction – all aimed at improving labour productivity.

“It is quite clear that if there is no increase in labour productivity in rapidly ageing societies, there will actually be a slowdown in economic growth that will affect everyone,” he said.