European Network of Economic Policy Research Institutes (ENEPRI) Research Report No. 11, 46 pages
A question increasingly raised in recent years is whether the trend towards longer life expectancy has been accompanied by comparable increases in the expectancy of life in good health (active or disability-free life expectancy). Formulating an answer to this question is of essential importance for projecting health expenditure and for forecasting retirement patterns over the coming decades. The AGIR research project aimed essentially at exploring all available information to illustrate whether people are not only living longer but also ageing in better health. Emerging from the AGIR project is, first of all, a pressing need to distinguish more clearly than is done in most of the public debate on population ageing between the ‘known’ and ‘the unknown’. More precisely, this implies distinguishing between the features of past, current and future developments, which can be considered as relatively certain or known with only a small margin of uncertainty, and features that depend essentially on ‘assumptions’ or scenario calculation, which are surrounded by substantial margins of uncertainty. Despite these remaining uncertainties the AGIR project unambiguously confirmed that ensuring at the same time the sustainability and adequacy of health care and retirement income for the population in EU member states over the coming decades is a task requiring action at all levels of society, government, firms and households. For public policy the issues at stake are not ‘only’ to undertake appropriate changes in the parameters of welfare systems but to reconsider the balance between public and private initiatives, and notably to thoroughly analyse to what extent the future necessary adjustments can be achieved through the play of market forces and to what extent policy intervention is required.