Andrew Scott, Jonathan David Old, 27 April 2020

COVID-19 is the first pandemic to since the world’s population consisted of more people aged over 65 than under five. Given that COVID-19 fatality rates rise sharply with age, that substantially affects the number of people at risk and the gains from social distancing. This column reveals that adjusting for change in the age structure and longevity of the US, the value of social distancing today is more than three times its corresponding 1920 value. Ageing societies and longer lives support considerably longer economic shutdowns compared to past pandemics.  

David Bloom, 14 October 2019

Population ageing, driven by declining fertility, increasing longevity, and the progression of large-sized cohorts to older ages, is the dominant global demographic trend of the 21st century. This column introduces a new Vox eBook that examines the myriad challenges and economic uncertainties posed by ageing populations. Overall, the contributions suggest that although the challenges are formidable, they are not insurmountable. There is good reason to reject the view that ‘demography is destiny’.

Marcin Bielecki, Michał Brzoza-Brzezina, Marcin Kolasa, 05 March 2019

Population ageing is likely to affect many areas of life, from pension system sustainability to housing markets. This column shows that monetary policy can be considered another victim. Low fertility rates and increasing life expectancy substantially lower the natural rate of interest. As a consequence, central banks are more likely to hit the lower bound constraint on the nominal interest rate and face long periods of low inflation, especially if they fail to account for the impact of demographic trends on the natural interest rate in real time.

Thomas Cooley, Espen Henriksen, 11 June 2018

Demographic change represents an important contributing factor to the slowdown of long-run growth. This column explores some of the channels through which this occurs and how the effects of demographic change can be mitigated. Policies that target consumption-saving choices, labour-leisure choices, and human capital accumulation over the lifecycle are likely to be most effective.

Daniel Barczyk, Matthias Kredler, 28 January 2018

Ageing societies and the increase in female labour force participation are putting pressure on governments to take a more active role in caring for the elderly. Using European and US data, this column investigates the responses of families to long-term care policy. The results suggest that care arrangements are strongly influenced by policy, and highlight the importance of accounting for informal care when evaluating reform proposals.

Thomas Dohmen, Armin Falk, Bart Golsteyn, David Huffman, Uwe Sunde, 21 January 2018

Many developed countries have ageing populations, with potentially major economic, political, and social consequences in the near future. Using Dutch and German panel data to control for cohort and period effects, this column investigates the relationship between age and risk attitudes. The results suggest that willingness to take risks declines with age, implying that societies may become more risk-averse as their population ages.

Mirko Licchetta, Michal Stelmach, 14 April 2017

Population ageing is one of the most commonly cited drivers of rising healthcare spending. However, other non-demographic cost pressures, such as increasing relative health spending and technological advancement, also contribute substantially over the longer term. This column argues that taking these additional factors into account, the UK’s net public debt due to healthcare is projected to be up to twice as large in 2066. These findings stress the importance of balancing the budget as early as possible to keep public finances on a sustainable path.

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