Our society has been talking for many years about demographic evolution and the challenges and opportunities it will present in the economic framework. In this regard, Juan Fernandez Palacios draws on various reports and authors to analyse the current and future scenario of population ageing, focusing on the importance of the senior economy. His approach is based on three pillars: a) The demographic projections that were made in the mid-nineties of the 20th century are currently being fulfilled; b) The growing awareness of the effects of population ageing, understood as a positive vision that improves the productive capacity of senior citizens and c) the commitment to the senior economy, beyond the public sector.
1- Demographic projections come true
We have spent a lifetime debating the long-term demographic outlook and the impact that the most likely scenarios will have on our pension systems. Twenty-five years ago, the report of the Congress of Deputies' report that gave birth to what is known as the Toledo Pact warned in section VII.1 of the report about the ageing of the population and its consequences, although it pointed out that "the demographic issue, in itself, will not acquire worrying characteristics until the third decade of the next century (21st)".
At that time it projected a total number of pensions of 9,417,221 (46% of them retirement pensions) by 2020 and 10,623,383 (48% retirement pensions) by 2030. ("Social Security on the threshold of the 21st century", Ministry of Labour and Social Security). According to data from the Ministry of Inclusion, Social Security and Immigration, at the end of 2020 the total number of contributory pensions was 9,811,124, of which 6,130,604 were retirement pensions.
This upward deviation of almost 400,000 pensions, 1.8 million if we focus on retirement pensions, worsens the forecasts for another significant figure, the ratio between the number of contributors and the number of pensioners, which stands at 31.05. 2021 at 1.95; this number must be put in the context of an old age dependency ratio (ratio between the population aged over 64 and those aged 16-64) of 30.6% in 2021, which will reach its maximum in 2050 (56.9%) (National Institute of Statistics, Population Projections 2020-2070).
Despite the uncertainty and the greater difficulties in projecting the number of contributors over the long term, it is to be expected that these developments will be reflected in the ratio of assets to liabilities of our public pension system.
Therefore, at the beginning of the third decade of this century, we can see that the warnings made in the mid-nineties of the twentieth century for the long term, which we can say we are already in, were justified. These were not the announcements of doomsayers interested in sowing suspicions about the future of the public system or the entrenchment of economists and actuaries in their own numbers.
On the other hand, it has not been possible for our country to move towards a mixed model in which supplementary pension systems compensate for the combined effect on public "pay-as-you-go" systems of the increase in life expectancy and the drastic reduction in the birth rate, in addition to other relevant changes in the economic and employment environment. This is an aspiration that was also included in the Toledo Pact and which, for a variety of reasons, has not been fulfilled.
2-Growing awareness of the effects of population ageing
A consequence of all the above is the level of public concern about the sufficiency of income after retirement, which reaches 6.8 out of 10 (Eurostat survey Q4-2016; Ageing Europe 2020 edition).
While this is essentially "not positive", it does, however, highlight a greater public awareness of the seriousness of the problem, which could perhaps induce the political spheres to attack the root of the problem; something that has not been done with sufficient determination in the last 25 years, or if it has been done, it has been reversed subsequently.
In this regard, it is worth highlighting the document "Spain 2050: foundations and proposals for a Long-Term National Strategy" which, drawn up by a broad panel of experts, could be understood to reflect the current government's strategic vision, now subject to debate with other political and social actors. It includes, among its challenges, number 5, "Preparing our welfare state for a longer-lived society", in which the key aspects of the problem are made explicit, namely:
1) The adaptation of the work cycle to the increase in longevity.
2) Increasing public expenditure on pensions.
3) The adequacy of health services.
4) The provision of long-term care for a growing part of the population.
The diagnosis of the current situation in the different chapters is quite accurate and the measures outlined point in the right direction.
This greater awareness of the effects of population ageing is progressively extending to another aspect of demographic evolution, in this case a positive one, namely the evidence that the increase in the length of life is accompanied by an improvement in the physical and mental conditions of the population at ages which, until now, have been considered as "leaving" the phase of active participation in the economy and in society. There is a growing conviction in different institutional, national and international spheres that there is enormous potential in this segment of the population that we describe as senior citizens, located in a range from 55 years of age (when the transition between work and retirement usually begins) to 75 (estimated average age at the end of the life span in full health) (Eurostat, 2020 edition of Ageing Europe).
This is a group that can by no means be written off. In fact, making a virtue out of necessity, the activation of the senior segment is not only desirable but necessary if we want to maintain the current economic and social model in Europe, where the working-age population has been shrinking over the last decade to the point that, with the size of the population remaining constant, the risk of a shortage of labour resources increases, making it more difficult in turn to maintain current levels of production of goods and services.
The Green Paper on Ageing recently published by the European Commission and now submitted to the debate of citizens, institutions and social partners, echoes this reality by stating that in Europe "...only 59.1% of those aged 55-64 were employed in 2019, compared to 73.1% of those aged 20-64. After 50 the risk of long-term unemployment increases". Despite this, the good news is the accelerated growth of the employment rate in that age group, by more than 20 points in the European Union in the period 2004-2019 (12 points in Spain) (Eurostat, 2020 edition of Ageing Europe).
The phenomenon particularly affects rural areas. Specifically and in our country, only 6 provinces (Madrid, Barcelona, Girona, Navarra, Malaga and Almeria) could keep the working-age population constant without raising the effective retirement age beyond 65 (Green Paper on Ageing, scenarios based on Eurostat projections).
The displacement of the life cycle of people therefore emerges as the best opportunity to take advantage of the productive capacity of seniors. To this end, the aforementioned institutional positioning in favour of the senior economy or "silver economy" is necessary, but so is that of companies and citizens, which requires a cultural change in the consideration of mature age.
3- Commitment to the senior economy
The impetus for this change cannot come only from the public sector. Initiatives with the same objective have also been launched from different private spheres, including the Mapfre Group, which in 2020 decided to create the Ageingnomics Research Centre within its Foundation (ageingnomics.fundacionmapfre.org).
With a completely non-profit vocation, as befits the purposes and activities promoted by Mapfre Foundation, we want to contribute to the development of the "silver economy", giving value to the production and consumption capacity of seniors.
From a holistic viewpoint, the Ageingnomics Research Centre has begun its work with a series of activities and projects that will help to make visible the emerging opportunities in the senior economy, among them: the Senior Consumption Barometer, the Senior Work Map, the Methodology for measuring the Silver Economy, the Guide for Senior Entrepreneurship or the Ranking of Senior-Friendly Territories.
We avoid merely equating the silver economy with the "silver market"; this is important and it is what we are trying to explore in depth through the Senior Consumption Barometer, the first edition of which is available on the CENIE website and the second edition of which is currently being prepared. The conclusions of the first study are revealing, insofar as they demonstrate the leading role of seniors in the economy through their consumption and leisure, housing, health and technology patterns, dispelling some myths and commonplaces.
This analysis must be complemented by the commitment of suppliers of goods and services to adapt their offer to the needs of this segment of the population, something which is already part of the strategies of the different groups and companies and which is also of interest to monitor.
And if the importance of the role of seniors as consumers is undisputed, it is in their role as producers that the greatest impetus is required. The analysis of the degree to which the work of mature workers is being exploited, either within companies or in the field of entrepreneurship, is the subject of a forthcoming study promoted by the Ageingnomics Research Centre. Preliminary conclusions anticipate that there is a long way to go to make optimal use of senior talent. And here we must highlight the importance of support for entrepreneurship as a way of materialising the participation of seniors in productive activity, which is key to the objective of making the work of seniors compatible with the integration of young people into the labour market, banishing the idea that the work of some is detrimental to that of others.
The work of seniors inside and outside companies is the great unfinished business for the consolidation of the silver economy.
And all of this needs to be measured, in order to favour comparison by territory, the extension of best practices among them and the monitoring of their evolution over time. A Methodology for Measuring the Silver Economy is needed, which is also what we at Ageingnomics are trying to consolidate based on a proposal whose development has been entrusted to a research team from the University of Comillas and which has just been published.
It is our vocation to strengthen collaboration with universities for research projects, as well as with other institutions with which we share objectives, such as CENIE.
And although the economic perspective is a priority in our vision, it is not the only one; we believe in the selfless involvement of seniors in volunteering and social action, in putting their knowledge and experience at the service of causes that support vulnerable segments of society. But we also consider it essential to reinforce people's self-esteem, which is often undermined by the idealisation of youth as the only model of being and being fully involved in society. Remaining active, participative and, in short, vital regardless of age, brings individuals closer to happiness and provides support to hold on to in the face of life's setbacks.
As Adela Cortina points out, "it is essential to always remember that the most important thing lies in personal age, which is the sum of chronological age and the vital age or process... social age, such as retirement age, although conventional, has a great influence on people's self-esteem, because we are social animals and symbols mark us... Considering people of retirement age as non-productive and incapable is pernicious and unwise" (Opening conference of the Ageingnomics 2020 Seminar, Ageing and Covid-19).
The economist and actuary Juan Fernández Palacios states in his article: "the displacement of the life cycle of people appears as the best opportunity to take advantage of the productive capacity of seniors (...) which requires a cultural change in the consideration of mature age". Along these lines, my approach to this social progress lies in the labour market and senior citizenship.
The population over the age of 55 has the capacity to make a contribution, as shown by the Senior Talent Map presented on 1 October 2021, coinciding with the International Day of Older Persons. More than four million seniors are part of our country's active population; almost one million seniors are self-employed and at least 100,000 seniors are entrepreneurs. The number of active seniors has increased by 1.6 million since 2008. Not only are more seniors employed in our labour market, they are also staying employed for more years. Senior talent, therefore, is very present in the Spanish economy, not only in absolute terms but also in relative terms.
One in five employees are seniors and one in three Spanish self-employed workers are over 55. And their participation rate in the total workforce has risen from 11% to 18.3%.
But the fact that older adults continue to contribute to the economy is not a source of complete satisfaction, as this report has shown that more than half a million older people who would like to work are unable to do so. At the same time, half of unemployed seniors have been out of work for more than two years. The number of unemployed seniors has almost tripled since 2008. Senior entrepreneurship rates are also lower than those of other age groups and much lower than our European peers. Finally, there is a strong tendency for seniors to leave the labour market prematurely, in some cases already in their 50s, which extends the period of post-employment inactivity to more than 30 years, a time equivalent or even longer than the period of activity.
This represents a loss of opportunity in terms of wealth that international studies have estimated at several points of GDP. Moreover, the advantages of the so-called longevity economy are not sufficiently exploited by companies as a result. At this point, it is worth remembering that Spain has the best circumstances to be the benchmark country in the silver economy due to its leadership in longevity, health and dependency system and openness to the outside world. However, this opportunity will be lost if the elderly are not present in the labour market and working.
Decisions are urgently needed, but this is a call not only for the public sector, but also for companies, workers' representatives and the elderly themselves. Enabling a "second career" with active early retirement, discouraging early retirement, penalising those who abuse redundancy and encouraging those who wish to work beyond the legal age are some of the proposals for the administration. But this will be of no use if companies do not embrace the richness of generational diversity and older people themselves do not accept that one of the best ways to grow old in good health is to continue to be useful at work.
I think the most important thing is to know why "senior talent" is so rarely manifested. There are three types of obstacles that prevent it from doing so:
It would also be advisable to establish measures to establish the true productivity of older workers, many have incredible assets, but others do not and we must be realistic.
As a reference to this answer: https://elpais.com/economia/2017/11/16/actualidad/1510826386_527772.html
The European Commission's Green Paper on ageing has just been published, which undoubtedly provides a very solid basis of analysis for launching a broad policy debate on ageing in order to discuss options on how to anticipate and respond to the challenges and opportunities it poses.
The Green Paper takes a life-cycle approach, reflecting, inter alia, the fact that responding to population ageing is a question of finding the right balance between sustainable solutions for the social safety net and strengthening intergenerational solidarity and fairness between young and old. It is therefore necessary to involve young people, and people of all ages in general, in designing a policy response to the challenge of ageing.
One of the first keys identified in the Green Paper to avoid, limit or postpone some of the challenges linked to ageing is to adopt healthy lifestyles from childhood, which in turn will lead to the healthy and active ageing that is absolutely necessary to make the growth of the "Silver Economy" a reality. And while this is largely a personal choice and responsibility, public policies can play an important supportive role.
Another important aspect along these lines is to encourage lifelong learning (investing in people's knowledge, skills and competences throughout their lives).
Education and training throughout working life helps to improve employability in a changing world of work, which will enable people who are continuously trained to prolong their working lives and improve their productivity. And even in retirement, continuing lifelong learning has been shown to be essential for healthy and active ageing.
A third aspect relevant to capturing the full potential of seniors is to work, as individuals and as a society, to combat ageism. According to the recently published UN World Ageism Report, it is estimated that one in two people in the world have ageist attitudes, which impoverishes the physical and mental health of older people and reduces their quality of life, costing society billions of dollars every year. As just one example, the report shows that in Australia, it is estimated that if 5% more people over 54 were in work, AUD$48 billion would be generated in the Australian economy each year. Breaking down stereotypes and discrimination against older people in the workplace and elsewhere is another key factor in the development of the "Silver Economy".
The Green Paper points out that the "Silver Economy", understood as a general shift in demand for products and services reflecting the specific needs and preferences of older people, represents an opportunity for the EU as it is expected to grow by around 5% per year from EUR 3.7 trillion in 2015 to EUR 5.7 trillion in 2025.
Finally, one last aspect that is essential for the Silver Economy to grow is to ensure that when people retire they have pensions that allow them to live a decent standard of living. To this end, it is necessary to adopt the necessary measures, on the one hand, to ensure the sustainability and adequacy of public pension systems, which must necessarily include extending working life; and on the other hand, to encourage people who retire to have complementary pension systems, both occupational and individual, which, together with public pensions, make possible consumption patterns after retirement that are similar, in terms of their level, to those existing before retirement. This also includes putting in place the necessary mechanisms to ensure that citizens, from the age at which they start working, are aware of their real pension expectations.
A) Fomentar la educación de por vida, sin limitaciones por edad o situación
B) Proscribir la jubilación obligatoria a cierta edad, también la incentivada por convenios y pactos. Garantizando que la persona esté en condiciones de cumplir con su obligaciones laborales.
C) Permitir fórmulas de jubilación parcial variadas.
D) Identificar el edadismo y reducirlo
E) Valorar la aportación voluntaria, no retribuida, incluso la intrafamiliar y divulgarla. Mejorar la estima de los mayores reconociéndoles su aportación, no la pasada sino la actual
F) Abrir los centros de mayores a la sociedad, no caer en guetos, fomentar la intergeneracionalidad
G) Dar a los seniors información de cara a las posibilidades que tiene en su etapa de vida