Currently showing: Funding longer lives


03 Jun 13 05:46

The other day, my attention was drawn to an item on BBC News about Ireland's looming emigration crisis. Basically, the problem is that the country's depressed employment market is prompting many thousands of young people to jump ship and search for work abroad. And those leaving are not the poorly qualified but in, many cases, university graduates. According to the BBC report, more than 25% of all Irish households have seen a family member emigrate over the last 24 months.

The statistics paint a similarly bleak picture in Portugal where many highly qualified young people have fled the country for either Switzerland or Portugal's former colony of Angola. Spain and Greece are also suffering from an exodus of their young people.

Such developments seriously damage national economies and pull families apart unnecessarily. They also accelerate the ageing of societies and make the problem of funding longer lives even more difficult to solve. How are the governments concerned going to finance pensions and look after the elderly if their young people are paying their taxes into foreign coffers?

Watch the BBC news item here:
http://www.bbc.co.uk/news/world-europe-22698740


Category: Funding longer lives

Location:


2 Comments

Matt Singleton - 3 Jun 2013, 8:31 a.m.

Migration is often proposed as a solution for increasing the working population and, subsequently, decreasing the ratio of older people. This excellent paper by Dr John Bongaarts of the US Population Council demonstrates how immigration could help reduce pension costs in G7 countries from 2000-2050 (see Table 2 on page 19 of http://www.popcouncil.org/pdfs/wp/185.pdf).

However, this is based on the migration flow being from countries with young populations to countries with ageing populations. Angola currently has the 6th youngest population in the world and by 2050 Portugal is predicted to have the 3rd oldest based on median age (p. 130 of http://esa.un.org/unpd/wpp/Documentation/pdf/WPP2010_Volume-I_Comprehensive-Tables.pdf).

Nicola Oliver - 3 Jun 2013, 12:37 p.m.

The anxiety around migration of younger people from a population is that they are leaving behind those older people whose retirement income may well be driven by a 'tax-heavy' system of funding retirement. Perhaps this is the type of scenario that will be the mother of invention when it comes to focusing more on increased saving and investment as an option? Or perhaps there's also a case for inviting the brightest potential departing migrants to be the architects of turning this anxiety into solution?


If you would like to leave a comment, please, log in.