Research Institute on the Economics of Aging

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Understanding Health, Ageing and Retirement in
Europe Prof. Axel Börsch-Supan, Ph.D. Director,
Mannheim Research Institute for the Economics of
Aging (mea) University of Mannheim, Germany
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Contents

• 1. Gaps of knowledge
• Reforms and professional policy design
• Five examples and key policy questions Why links
  among health and economics are so important to
  understand aging in Europe
• 2. SHARE
• Data needed for professional policy design

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Conditions for active and healthy ageing
Income security and personal wealth
? Public policy
dynamic ? longitudinal
Kinship and social networks, living arrangements
Physical and mental health,
disability, mortality
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Example 1 Pension Systems and Labor Force
Participation
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Key Policy Questions

• Early retirement costs 25-33 of pension budget
• Why is retirement so early in some European
  countries?
• How important are economic reasons (incentives,
  generosity) versus non-economic determinants
  (health, work place conditions, macroeconomics)?
• Where are incentives particularly strong, and how
  can they be changed to become more fair?
• How true are the productivity myths? How to make
  work places more attractive for older workers?

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Example 2 Economic and Epidemiological Disability
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Key Policy Questions

• If old-age pensions (or unemployment benefits)
  become less generous, disability may pick up
• Why is disability prevalence in Europe so
  different?
• What is the true prevalence of disability?
  (Indicators needed for method of open policy
  coordination)
• How to avoid type-I (healthy people get
  disability pensions) and type-II (truly disabled
  persons are denied disability benefits) errors?

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Example 3 Savings and Pension Reforms
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Key Policy Questions

• Pension reform will substitute private savings
  for reduced state support
• Will people voluntarily fill the emerging gaps by
  their own own provision?
• If not, what kinds of incentives are required?
• If people save more for retirement and health
  care, where does it come from? Other savings?
  Consumption? Bequests?
• Need indicators based on micro data to build
  early warning system

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Example 4 Health care reformCosts, efficiency,
insurance
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Key Policy Questions

• Health care reform is cutting costs and enforces
  managed care models
• Will people pick up uninsured health care by own
  expenses?
• Who gets left out if public health care is
  reduced?
• How regionally diverse is health care quality?
• Do managed-care systems produce similar health
  outcomes at lower costs?

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Example 5 Mortality and economic status
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Key Policy Questions

• How different is mortality/morbidity by
  socio-economic status? What are the causes? Which
  direction goes the causality?
• How fast does mortality, morbidity (disability)
  change? What are the implications for health care
  costs?
• How different is health care utilisation by
  socio-economic status?
• How large will demand for long-term care be? How
  widespread is family care? How will it change?

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Why is this of particular interest for Europe?

• Sustainability of pension and health care
  insurance The aging process is particularly
  pronounced in Europe
• Incentive effects of public policies Labor force
  disincentives and health market distortions
  particularly large in Europe -- aggravating the
  problems of sustainability
• Cross country comparisons To learn from
  experiences (and institutional differences) in
  other countries, one needs comparable data. The
  EU represents an ideal laboratory to observe
  (still) many different policy approaches (from
  Northern and Southern welfare states to UK
  liberal society).

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2. The SHARE Survey

• Data collection for professional policy design
• Inter-disciplinary Health-Economics-Sociology
• Cross-national Currently 13 countries
  involved Denmark, France, Germany, Greece,
  Italy, Netherlands, Spain, Sweden,
  Austria, Belgium, Switzerland, United
  Kindom, United States
• Longitudinal Ageing is a process, not a state

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What data will be collected? (1)

• 1. Health variables Self-reported health,
  physical functioning (ADLs, IADLs, walking speed,
  grip strength), mental health and cognition,
  health behaviors and health service utilization,
  insurance coverage. In the longer run
  bio-medical data.
• 2. Economic Variables Current work activity and
  job characteristics (job demands, flexibility,
  hours worked, opportunities to work
  post-retirement age), employment history, pension
  rights, sources and composition of current
  income, wealth and consumption.

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What data will be collected? (2)

• 3. Family and Social Network Family structure,
  assistance within families, intergenerational
  transfers of assets, money and time, social
  networks, proximity to relatives and activities
  (shopping, amusement), time use after retirement,
  volunteer activities.
• Psychological data Expectations, preferences,
  risk aversion, time horizon
• Demographic data Basics (age, gender, marital
  status...), housing, education
• Data Links Where available administrative
  earnings, social security, employer provided
  information.

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Prototype Survey

• English pilot September 2002
• Full pilot June 2003
• Full pretest January-February 2004 (n750)
• Main prototype survey April-Sept. 2004
  (1500 HHs in 11 countries, n22.000)
• Evaluation AMANDA (5. Framework Program)
• Bi-annual panel 6. Framework Program