Preventing Ageing Unequally

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Author(s):
OECD
18 Oct 2017
Pages:
256
ISBN:
9789264279087 (PDF) ;9789264279070(print)
http://dx.doi.org/10.1787/9789264279087-en

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This report examines how the two global mega-trends of population ageing and rising inequalities have been developing and interacting, both within and across generations. Taking a life-course perspective the report shows how inequalities in education, health, employment and earnings compound, resulting in large differences in lifetime earnings across different groups. It suggests a policy agenda to prevent, mitigate and cope with inequalities along the life course drawing on good practices in OECD countries and emerging economies.

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  • Foreword and acknowledgements

    The health status and income levels of older people have substantially improved over the last decades in OECD and emerging countries. This Preventing Ageing Unequally report shows, however, that risks of increasing inequality among future retirees have been building up. Demographic changes combined with rising inequality trends and tight public finance constraints in many countries are modifying life prospects at older ages. With longer life expectancy, declining family size, higher inequality over the working lives and reforms that have reduced future retirement income and tightened the links between pension contributions and benefits, the experience of old age is going to change dramatically for today’s younger generations. Financing of pensions and caring for elderly people in particular might become more difficult, aggravating the burden for the most disadvantaged. The sustained and fairly generalised improvement in the living standards of older people is unlikely to be prolonged in the forthcoming decades.

  • Acronyms and conventional signs
  • Executive summary

    “Ageing unequally” refers to inequality that develops throughout the life course and materialises in old age. It is often the result of specific episodes during people’s lives that tend to cumulate their detrimental effects on health and income at old age. Ageing unequally is not a new phenomenon, but while the current generation of older people is experiencing higher incomes and lower poverty risks than previous ones in most countries, the younger generations are likely to face again higher inequality in old age. They are expected to live longer, but have been experiencing more unstable labour market conditions and widening inequalities in the distribution of earnings and household income. This contributes to widening inequality in old age, while socio-economic disparities in health status remain large.

  • Preventing ageing unequally

    This introductory chapter gives an overview of the entire publication drawing on analyses carried out in the other chapters. A special attention in this report is paid to life course trajectories comparing outcomes across generations. This chapter summarises how old age inequality is often the result of developments which interact across different dimensions and accumulate with age. It highlights that demographic changes combined with recent inequality trends and tight public finance constraints are changing the balance of societies. Risks of increasing inequality among future retirees have been building up in many countries. This chapter also suggests a policy agenda to prevent, mitigate and cope with such inequalities, drawing on good practices in OECD countries and emerging economies. The Executive Summary of the publication includes the key findings and recommendations.

  • How inequality compounds over the life course

    This chapter shows how inequalities in education, health, employment and earnings reinforce each other and evolve over the life course. It first discusses how unequal ageing begins in childhood because of the crucial influence of early life circumstances on health and socio-economic developments later in life. It then analyses the interactions between health, education and labour market outcomes through the different stages of working life, and builds life course trajectories highlighting differentials in lifetime earnings. The chapter then focuses on trends and social disparities in disability among the over 50s in Europe, Japan and the United States. Finally, the last section zooms in on some of the key challenges in health, education and income inequalities faced by emerging economies.

  • Recent trends toward increased inequality among future retirees

    This chapter finds that the relatively steady increase in real income across birth cohorts at the same ages is stalling for those born since the 1960s. It first shows that although population ageing is a common trend across the world the timing and pace of shifts in the age structure differ widely across countries. It then compares the income levels, the income inequality and the employment rates of different birth cohorts over their life course. The chapter also includes a focus on gender gaps, showing that gender-related labour market gaps have narrowed across cohorts, but that wide differences remain. The last section highlights that risks of higher inequality in old age have increased: old-age support systems will likely need to cope with higher inequalities down the road.

  • Life course inequality across generations

    This chapter examines how inequality which builds up over an entire lifetime from disparities in the length of life, employment rates, earnings and pensions evolves across birth cohorts. It shows that great strides in longevity have been a common phenomenon across countries and genders, but also that marked gaps in the length of life between educational groups and genders exist in all countries for which data are available. It then turns to education-and gender-related gaps in total-career labour earnings by showing how the diverse trends in employment rates, hourly wages and annual hours worked shape their evolution from one generation to the next. The chapter subsequently investigates how inequality during the working life and gaps in life expectancy translate into differences in pension benefits. A pilot dynamic micro-simulation model finally simulates for a limited number of countries the impact of higher life expectancies on the share of healthy life years and on the length of working lives. It also estimates the effect of raising the retirement age on the career length and pension entitlements across socioeconomic groups of the late 1960s cohort.

  • A closer look at the over-50s

    This chapter documents labour market and retirement patterns among the over-50s. It first shows that employment of older adults varies substantially across socio-economic groups. Lifelong learning opportunities and inclusive labour markets are essential to ensuring that workers of all educational backgrounds have the possibility of extending their careers until older ages. The chapter then demonstrates that there is a large scope for higher labour force participation rates among the over-50s from a health perspective. Beyond health, other factors, including pension system parameters and difficult working conditions, contribute to the strong drop in employment rates in people’s 50s and early 60s. Pension systems need to be well-designed and inclusive to fight old-age poverty effectively. The level of safety net provision in pension systems varies considerably across OECD countries.

  • Living conditions in later life

    This chapter analyses living conditions later in life. The first section focuses on regional differences and shows that there are both large regional differences within countries in the share of the older population and in access to health and transport services for the elderly. The second section deals with living conditions and well-being among the over-80s. Current generations are better off than previous generations in several dimensions of well-being. At the same time a larger share of the over-80s live alone or with a frail partner, which heightens the risks of poverty and depression. Finally, the third section focuses on long-term care (LTC). As people age, the likelihood of being in need of LTC increases. Inequalities which have accumulated over the life course are magnified in countries where the costs of LTC borne by poorer individuals are not well covered by social protection systems. This implies that in some countries people who have LTC needs might have those needs unmet or in addition fall into poverty.

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