The Impact of Population Aging and Public Health Support on EU Labor Markets.

Mirela Cristea,Adrian Lucian Sala,Gratiela Georgiana Noja,Petru Stefea

doi:10.3390/ijerph17041439

Abstract

Population aging and public health expenditure mainly dedicated to older dependent persons present major challenges for the European Union (EU) Member States, with profound implications for their economies and labor markets. Sustainable economic development relies on a well-balanced workforce of young and older people. As this balance shifts in favor of older people, productivity tends to suffer, on the one hand, and the older group demands more from health services, on the other hand. These requisites tend to manifest differently within developed and developing EU countries. This research aimed to assess population aging impacts on labor market coordinates (employment rate, labor productivity), in the framework of several health dimensions (namely, health government expenditure, hospital services, healthy life years, perceived health) and other economic and social factors. The analytical approach consisted of applying structural equation models, Gaussian graphical models, and macroeconometric models (robust regression and panel corrected standard errors) to EU panel data for the years 1995–2017. The results show significant dissimilarities between developed and developing EU countries, suggesting the need for specific policies and strategies for the labor market integration of older people, jointly with public health expenditure, with implications for EU labor market performance.

Highlights

Health systems in developed and developing countries are in the process of adapting to population aging, due to significant increases in life expectancy, along with a downturn in birth rates [1].Wide-ranging population aging is commonly associated with many consequences, such as increased costs for households, strains on public finances and healthcare providers and decreasing economic growth [2,3,4,5].As demographic structures shift towards an aging population, greater pressure will be placed on the population of working age, those aged between 55 and 64 years [6,7]
The results obtained after processing these new sets of macroeconometric models (RREG and panel-corrected standard errors (PCSE)) for each of the four working hypotheses are similar to the structural equation modeling (SEM) model, being robust and consistent throughout different techniques, as follows: unfavorable implications of the proportion of employees aged 55–64 for labor productivity, more emphasized for developed countries (EU-15)
Some of these actions include: Additional governmental financial expenditure for health and long-term care systems, since our regression results have shown that an increase in Health government expenditure (HGE) leads to significant increases in labor productivity (LP); and financial incentives and support services for new mothers to increase birth rates, since our estimations demonstrate that increased birth rates and life expectancy lead to an increase in labor productivity

Summary

Introduction

Health systems in developed and developing countries are in the process of adapting to population aging, due to significant increases in life expectancy, along with a downturn in birth rates [1].Wide-ranging population aging is commonly associated with many consequences, such as increased costs for households, strains on public finances and healthcare providers and decreasing economic growth [2,3,4,5].As demographic structures shift towards an aging population, greater pressure will be placed on the population of working age, those aged between 55 and 64 years [6,7]. Health systems in developed and developing countries are in the process of adapting to population aging, due to significant increases in life expectancy, along with a downturn in birth rates [1]. Wide-ranging population aging is commonly associated with many consequences, such as increased costs for households, strains on public finances and healthcare providers and decreasing economic growth [2,3,4,5]. As demographic structures shift towards an aging population, greater pressure will be placed on the population of working age, those aged between 55 and 64 years [6,7]. European Union (EU) Member States (MS), healthcare costs are covered from both private and public sources, while the public ones are financed by contributions collected from the working age population. Res. Public Health 2020, 17, 1439; doi:10.3390/ijerph17041439 www.mdpi.com/journal/ijerph

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