LEPAS

Long-Run Economic Perspectives of an Ageing Society

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 Obiettivo del progetto (Objective)

'This project integrates into modern dynamic macroeconomics a biologically founded process of individual ageing, i.e. ageing understood as the gradual deterioration of the functioning of body and mind. The EU member countries will be increasingly populated by older people. Our project investigates theoretically and quantitatively how ageing affects their health and productivity. Using models of endogenous economic growth we assess how the feedback effects of ageing on investment and education affect long-run economic growth, competitiveness, and welfare of the EU member countries. With multi-country models we analyze how ageing influences human capital formation and migration flows in Europe. Using models of optimal retirement decisions we investigate how ageing impacts on the contribution and employability of older workers and how this feeds back to issues of intergenerational solidarity. With models of endogenous R&D we explore how ageing interacts with technological progress and assess how ageing will affect the EU's capacity to innovate and to develop. We investigate how ageing interacts with health demand and supply and how this feeds back to the macroeconomy. We assess whether the EU's market economies and public sectors provide too much or too little health care.'

Descrizione progetto (Article)

The EU-funded project 'Long-run economic perspectives of an ageing society' (LEPAS) has advanced a new way of thinking about the relationship between the biological process of ageing and modern dynamic macroeconomics. Researchers set up models based on a novel life-cycle approach, to investigate how ageing affects health, human capital formation, migration flows and productivity in EU Member States.

The framework was used to observe and explain a number of related factors such as the education gradient, and how these impact the macroeconomy. The developed economic life-cycle model provides a general framework for examining ageing in the biological sense and ascertaining how it can be applied to decisions surrounding retirement.

Being able to assess how ageing affects productivity offers insight into the optimal retirement age from the perspective of individuals as well as of society. The project's research also has the potential to inform immigration management policies and promote knowledge on national approaches to investment in health care.

Other areas investigated by the LEPAS project include the impact of an ageing society on education, technical progress and long-term economic growth. A number of scientific reports on the various areas of inquiry were produced. These covered topics such as historical evolution of retirement age and retirement duration, immigration and social security, life expectancy and long-run growth, and healthcare demand and supply.

With Europe's countries facing the challenges of economic crisis and an increasingly older population, the LEPAS initiative could not be more timely. Project results stand to boost social science research and facilitate better approaches to decision-making in relevant areas for better welfare, growth and competitiveness.