In Greek mythology, the “Golden Age” referred to an idyllic period of peace and stability when people lived long, healthy, active, and prosperous lives. Prometheus, the Titan god of forethought, is said to have promised, “A new Golden Age shall come, brighter and better by far than the old!”
In this ancient fable, stable populations and long lives were central elements of flourishing societies free of disease and poverty.
Nowadays, stagnant populations and aging societies are often seen as a challenge or threat, rather than an opportunity – but the current aging of societies in Europe could bring citizens closer than many expect to the ideal described in mythology.
The average age of the population in Europe and Central Asia today is 37 years old – eight years older than the average age six decades ago. This development is most advanced in the western part of the region, but the relatively young populations in Turkey and in Central Asia are expected to quickly follow this demographic trend.
The main reason behind population aging in the region is not that people are living longer, but that they are having fewer children. Since the 1970s, fertility rates have declined dramatically. Outward migration of young people is also playing a role in shaping the population structure in several countries.
The potential impacts of aging societies are often cause for apprehension. Working individuals, for example, are concerned about bearing the burden of financing health and pension systems that will have to support more elderly people.
Such concerns are warranted – and governments are tasked with helping to address them in a socially responsible and fiscally prudent way. The task is immense and challenging, but not impossible. Indeed, aging societies present opportunities to implement important socioeconomic reforms that can ultimately help foster a more active, healthy, and productive society.
While populations in Europe and Central Asia are aging overall, individuals are not. Life expectancy – especially for men – has even declined over the past five decades in many countries. There is still a long way to go in reducing cardiovascular disease, cancers, and lifestyle-related illnesses.
Individual behavioral change is paramount to achieving a “cardiovascular revolution,” but health systems can support this shift with a greater focus on preventive care, primary care, and diagnostics. Effective, low-cost preventative measures include tobacco and alcohol regulation, vaccination programs, improved diets, and exercise. It will be important, however, for policies to focus on population groups at the lower end of the socioeconomic welfare spectrum, where the incidence of cardiovascular disease is often highest.
From a fiscal perspective, a greater focus on illness prevention would significantly reduce the costs of old-age care. Ensuring that people’s later years are healthy will also be good for economic growth. An older population that is healthy can stay longer in the labor force, contribute more, and incur less health care expenditure.
There is significant scope for improvement in education – especially when the region is compared with Western Europe and Asia. Competencies in reading, mathematics, and science among 15-year-olds remain well below OECD averages.
In an aging society, a smaller portion of young people can provide an important opportunity to improve the quality of education. Governments can use the same share of income to invest in more and better quality education for the individual.
Education systems should also focus on reinforcing the cognitive skills needed for productive employment throughout longer working lives. An aging workforce will have a significant impact on the productivity levels of firms; therefore, they will need to adjust to the evolving abilities of older workers. Such adjustment is feasible, considering that skills do not necessarily decline with age, but instead shift to new areas of expertise.
Labor Market Participation
Pension eligibility, fixed retirement ages, and labor regulations often create considerable disincentives for older people to continue working. However, policies that enable individuals to participate more and longer in the labor market would ultimately support fiscal sustainability and growth – and encourage more active and healthy lives.
Interventions in the labor market can also prevent inequality from widening in society. In aging societies, governments can provide more incentives and support for older individuals to participate longer and take advantage of potential wage gains. Raising the retirement age is only one such incentive, but ongoing support in the form of expanded training, lifelong learning and skills development can also encourage longer participation, while levelling the playing field between younger and older workers.
Labor market reforms should also focus on allowing women to reconcile family and career goals, supported by the provision of adequate child-care facilities. Countries with flexible labor markets that support gender equality have generally managed to increase fertility rates.
Migration can also play an important role in rebalancing demographics. More flexible labor markets and better integration policies not only attract workers from abroad but also help increase their contribution to productivity growth, fiscal outcomes, and the dynamism of the economy.
A New Golden Age
Policies can help stabilize the demographic structure, enhancing the opportunities and mitigating the negative socioeconomic consequences of aging populations. The most immediate priorities for governments are to enable longer and more productive working lives, ensure fiscal sustainability, and prevent aging from leading to an increase in old-age poverty. But individuals, businesses and governments all have a role to play.
According to legend, Prometheus was always looking to the future and preparing for what might happen tomorrow, next year, or in a hundred years. To fully prepare for the new demographic reality and to seize the potential opportunities, policymakers across Europe and Central Asia would do well to follow his example. Perhaps then, all citizens can look forward one day to their Golden Age of aging.