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Challenges for sustainable social security
2
Subjects
Important trends from the past Individualism & diminishing solidarity Graying society Concepts for development
Important trends from the past Societal:
Less marriages More divorces Smaller families And….
Labour market Growing average income Higher participation rate More temporary employment More self-employed More part-time employment End of one-employer careers More flexibility Greying work force
3
Marriage & divorce
4
1965 1970 1975 1980 1985 1990 1995 2000 2005 20070.00
500000.00
1000000.00
1500000.00
2000000.00
2500000.00
3000000.00
3500000.00
4000000.00
Marriages EU 27 1965-2007
1965 1975 1980 1985 1990 2000 20050.0
200000.0
400000.0
600000.0
800000.0
1000000.0
1200000.0
Divorces EU 27 1965-2005
Average household size 1980 - 2005
5
More societal characteristics (Western-Europe) Single parenthood increased Age segregation:
Culture Housing Care
Criteria for “ageing” remained unchanged, despite increased life expectancy and health
Age discrimination (labour market) Orientation on individual rights, rather than on
households
6
Growing average income
7
1998 1999 2000 2001 2002 2003 2004 2005 200625000
27000
29000
31000
33000
35000
37000
EU (27 countries)
CPI EU27
EU (25 countries)
CPI EU25
EU (15 countries)
CPI EU 15
Employment related indicators
8
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
55
57
59
61
63
65
67
69
Labour force participation EU15 1968-2008 OECD
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
0.0
5000.0
10000.0
15000.0
20000.0
25000.0
30000.0
35000.0
Employers & Self-employment EU 27 1987-2009 Eurostat
1988 1998 200812.0
13.0
14.0
15.0
16.0
17.0
18.0
Part-time employment shareEU, 1988-2008, Eurostat
1988 1998 20083.04.05.06.07.08.09.0
10.011.012.013.0
Temporary employment shareEU, 1988-2008, Eurostat
More on flexibility
Life Long Learning widely accepted Employability widely applied End of “one-employer careers”
Example from my family Future end of one-occupation careers Growing self-employment Self-employed pay a high price during crises… Some occupational pension schemes (based on
outdated concepts) hinder development of employability (military services, firemen etc.)
9
Ageing Europe
10
196019701980199020002010202020302040205069.0
71.0
73.0
75.0
77.0
79.0
81.0
83.0
85.0
87.0
Life expectancy at birth
Nordic
Rhineland
Anglo-saxon
Mediterranean
2010 2020 2030 2040 2050 20600
100000
200000
300000
400000
500000
600000
Population projection EU 27
>80
65-80
15-64
0-14
2010 2020 2030 2040 2050 20600%
10%20%30%40%50%60%70%80%90%
100%
Population projection shares EU 27
>80
65-80
15-64
0-14
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2830323436384042444648
Median age Europe
Dependency ratio
11
EU27 Nordic Rhineland Anglo-Saxon Mediterranean0
10
20
30
40
50
60
70
80
90
2060
2050
2040
2030
2020
2010
Dependency ratio:Number of people aged 0 to 14 and 65 years and older
Number of people aged 15-64X 100
“Real dependency ratio”
12
2010 2020 2030 2040 2050 20600%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Population projection shares EU 27Based on current participation rate
>80
65-80
0-14
15-64 i
15-64 a
13
People in EU are getting older (life expectancy) Number and share of people > 64 increases In particular people > 80
Population EU is growing older (median age) Population 15-64 decreases Substantial cost effects arise:
Labour market shrinks Less productive workforce Rising sick leave, unemployment benefits & disability pensions Number of old-age pensions Duration of old-age pensions Health care costs Long term care costs Participation rate of older workforce is lower
14
Age related expenditures for Pensions, Health Care, Long term care, Unemployment benefits and Education – % GDP - no change scenario
15
Austri
a
Belgium
Bulgar
ia
Cypru
s
Czech
Rep
ublic
Denm
ark
Eston
ia
Finlan
d
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
ly
Latv
ia
Lithu
ania
Luxe
mbo
urgM
alta
Nethe
rland
s
Poland
Portu
gal
Roman
ia
Slovak
ia
Sloven
iaSpa
in
Sweden
United
King
domEU 2
7
Euro
area
-5
0
5
10
15
20
25
30
35
40
2007-2060
2007
Population• 2004-2050
Labour force- Participation- Employment- Unemployment
Labour productivity
Real interest rate
• GDP
Pensions
National models
Health care
Long-term care
Education
Unemployment benefits
Total age-relatedspending
Measuring the ‘cost of ageing’: common long-term budgetary projections
Measures to consider
Preventive measures: Increase participation rate Increase average working hours (decrease part-time
rate) Immigration Reduce sick leave, age-related unemployment and
disability pension Retirement age (relate to life expectancy) (make babies?.... Fast!)
17
Measures to consider
Defensive measures: Reduce pension & social benefit levels Stop occupational pension schemes Reduce (social) benefits duration Reduce health care benefits Close (instead of build) long-term care facilities (Reduce health care innovation) (Stop resistance against voluntary euthanasia)
18
Measures to consider
Investments: Culture change: re-value family Health promotion (smoking, alcohol, weight, exercise,) Culture change: really life-long learning and changing (modular) education & training (assistive) technology Flexibility rewarding social security systems
19
Group assignment What can be done to deal with the possible higher
expenditures due to an ageing society? What kind of investments are thinkable to deal with the
effects? Are there other measures to consider?
Assess the suggested measures and consider whether they can be a solution for:
(current) EU countries Turkey
Motivate your answers 25 min. group discussion, 10 min. preparation report, 5 min.
plenary report, 20 min. plenary discussion
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Examples of possible cost-reduction / awareness
21
Examples of possible cost-reduction / awareness
22
23
2010 2020 2030 2040 20500%
10%20%30%40%50%60%70%80%90%
100%
Turkey population projection shares
>80
65-80
15-64
0-14
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
05
101520253035404550
Median Age
Europe
Turkey
1960 1970 1980 1990 2000 2010 2020 2030 2040 205048.0
53.0
58.0
63.0
68.0
73.0
78.0
83.0
88.0
Life expectancy at birth
Turkey
Average
2010 2020 2030 2040 20500
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Turkey population projection
>80
64-79
15-64
0-14
Turkey
Gradually diminishing 0-14 population Increasing population 15-64 (+11 million) In 2050 4 x more people > 65 (4.5 million > 18
million)
24
Group assignment What are the Turkish challenges? Are there opportunities for Turkey related to the European
developments? If so, what? Is there a specific role for the Turkish social security to deal
with these challenges and/or opportunities? Please specify Are there other essentials? Please include: participation rate, unemployment,
educational attainment, family life etc. in your considerations.
30 minutes group work 10 minute presentation Concluding discussion
25