World Economic Forum publishes report on global health and pensions scenarios
September 23rd, 2008
The World Economic Forum (WEF) is wading into the global challenge of aging populations in a big way. The WEF commissioned Mercer, the global benefits consulting firm, to do scenario modeling on how societies might respond to the challenges of health and pension financing for increasingly elderly global populations. The aim is to help governments, individuals, employers and the healthcare and financial service industries to think through the issues and prepare for the future, according to WEF/Mercer.
The WEF/Mercer report should provide some interesting fodder for discussion at the Silver Market Phenomenon symposium coming up October 2-3 in Tokyo, where I’ll be attending, presenting and doing some reporting.
Scenario analysis looks at various possible outcomes from different policy actions, and can be a powerful tool for decision-makers when it’s used to get a more complete understanding of how various decisions impact outcomes. Here’s how WEF/Mercer describe the global aging challenge:
In many countries around the world, a rapidly ageing population is putting severe pressure on pension and healthcare systems. The demographic time bomb is ticking in both developed and less developed countries.
The UN expects that by 2050, the old-age dependency ratio at a global level will have more than doubled; from 11 elderly persons per 100 working age persons in 2007 to 25 elderly persons per 100 working age persons in 2050. In some countries, the pressures of an ageing population will be even stronger. For example, in China the old-age dependency ratio is expected to rise from 11% to 39% in 2050, in Germany from 29% to 50%, and in Japan and Italy from about 30% to 70%.
These figures mean that one of the key global challenges is the financial sustainability of public pension and healthcare systems in rapidly ageing societies across the world. In addition, challenges in many less developed countries include the lack of formal social security, the diminishing role of families in old-age care, and underdeveloped private pension and health insurance markets.
The report is titled “The Future of Pensions and Healthcare in a Rapidly Ageing World: Scenarios to 2030. It describes three scenarios; the two key variables are global economic growth rates and social/political attitudes. You can download the full report here [large pdf file]. A page describing the initiative is here.
A second phase of work is getting underway, involving workshops to discuss the scenios and implications. If you’re interested in getting involved, more information is here [pdf file].
Finally, here’s a video in which two of the principal researchers discuss the scenarios:
