Mayores y longevidad en España y Portugal: indicadores demográficos básicos a tener en cuenta en las políticas previsionales

El concepto de estado de bienestar es bastante ambiguo; incluso los distintos países lo interpretan de forma diferente, llegando a clasificarse en cuatro grupos: países mediterráneos, nórdicos, anglosajones y continentales.

España se encuentra, naturalmente, dentro del grupo de los países mediterráneos, cuyo estado de bienestar se caracteriza, por tener un modelo social con menores gastos que el resto de los grupos y que está fuertemente basado en las pensiones y en unos gastos de asistencia social muy bajos.

En general, el estado de bienestar incluye los derechos de pensiones, sanidad, educación, desempleo, servicios sociales, cultura y otros servicios públicos, donde estarían los subsidios. Esto implica que ampara al conjunto de los ciudadanos y no solo a los trabajadores.

El efecto de una esperada mayor longevidad en el futuro puede afectar de forma distinta a los diferentes derechos que componen el estado del bienestar. Veamos cómo incide en cada uno de ellos.

El efecto de una esperada mayor longevidad en el futuro puede afectar de forma distinta a los diferentes derechos que componen el estado del bienestar

a) Pensiones. El efecto de una mayor longevidad sobre las pensiones de jubilación es muy importante. En este punto, conviene recordar que casi todos los países de nuestro entorno han introducido alguna medida que ajuste el aumento de la esperanza de vida. España también lo hizo en 2013, mediante la incorporación del Factor de Sostenibilidad, que corrige la pensión inicial según el incremento de la esperanza de vida, para que se mantenga la equidad intergeneracional. Sin embargo, no se ha incorporado en el resto de las contingencias comunes (viudedad, incapacidad, orfandad, favor familiar). Considero de vital importancia que se siga aplicando el Factor de Sostenibilidad o un instrumento similar para, además de mantener la equidad, contener el crecimiento del gasto en pensiones. Incluso habría que analizar si este instrumento debiera extenderse a las otras contingencias.

b) Sanidad. Es evidente que un mayor número de años de vida van a suponer un mayor gasto en sanidad, sobre todo, sabiendo que el mayor porcentaje de gasto se concentra en las edades cercanas al fallecimiento. Otra variable que hay que vigilar es la de esperanza de vida en estado de buena salud. Es imprescindible que la parte de sanidad se dote de los recursos suficientes para poder hacer frente al mayor gasto que inevitablemente se va a producir en el futuro.

c) Educación. En este caso, el diseño de la financiación de esta partida no se ve influida por el aumento de la esperanza de vida, pero sí que debería hacerse un esfuerzo para que los resultados de nuestros alumnos fuera similar al de otros países de nuestro entorno.

d) Desempleo. No se vería muy afectado por la mayor longevidad, excepto que se retrase de forma importante la edad ordinaria de jubilación.

e) Servicios sociales. Claramente debería hacerse un esfuerzo de financiación en el futuro, porque cada vez llegará mayor número de personas con mayor número de años para poder utilizar este tipo de servicios. 

f) Cultura. Aunque este derecho es utilizado por todos los grupos de edad, tal vez el hecho de que en el futuro haya más personas mayores, con más tiempo de ocio, tenga que hacer que se replantee su financiación. 

g) Otros servicios públicos (subsidios). En este caso el efecto no será muy importante.

In some of the policies of the welfare state, of course, life expectancy should be a reference variable, although in others it would not make sense.

Logically, life expectancy should be a reference variable in those welfare state instruments that meet two requirements at the same time: one, they should be specified in life-type benefits; and, two, they should be of a contributory nature.

An example of this type of policy can be found in contributory pensions: retirement pensions and most widow's and permanent disability pensions. At present, because life expectancy is not taken into account, individuals of different generations who have paid the same contributions and retire at the same age generally receive different benefits throughout their lives because they have different life expectancies.

Taking into account life expectancy would be a guarantee of intergenerational equity

The individual of a more recent generation, with a generally longer life expectancy, would not gain from that of a previous generation, as in one way or another the system of calculating the benefit would take into account the different life expectancy.

It would also prevent living longer from undermining the financial sustainability of the welfare state. If, as we all wish, life expectancy increases over time, such a mechanism would help to limit the increase in expenditure.

Conversely, it would not be logical to take life expectancy into account in other types of welfare state policies such as minimum or non-contributory pensions, because they have an objective of guaranteeing a decent standard of living, which is independent of life expectancy; or, in benefits such as unemployment, health or education, which are not lifelong but linked to a situation that is temporary.

Welfare state policies are aimed at people's needs, and therefore everything that affects them needs to be taken into consideration when designing them.

Within welfare state policies we find policies related to pensions; and pension systems are based, to a greater or lesser extent, on the pay-as-you-go system. This means that the pensions of one moment are supported by the contributions of the same period. This relationship is influenced by many variables, one of which is demographics.

Failure to take account of circumstances such as life expectancy in the design of pension systems leads to their inadequacy and failure to meet their ultimate objective, which is to be solvent and secure

Demography is characterised, at the present time and foreseeably in the future, by a decrease in the birth rate and an increase in survival. The latter, although it is good news, generates, together with the reduction of births, a significant risk for the pension systems. Fewer people will pay for the system and more will need more resources (financial, welfare) for longer, as they live longer. For all these reasons, not taking these circumstances into account and excluding them from the design of the systems means that they are inadequate and fail in their final objective, which is to be solvent and guarantee coverage for the population. 

This is an overly simplistic and perverse question. I will explain.

The life expectancy of a population is an average value of the time that this population will live on average. If we analyse it in more depth, the subgroups with the best living, health and working conditions are those that live the longest, while those subgroups that are helpless, without resources, in poor health or precarious are those that will live the fewest years. This is the average value.

So, to begin with, the use of a single indicator should not be valid. You need a set of indicators that measure different characteristics.

Then comes the real question: what do we want to cover?

Clearly, if there is going to be a series of social or economic transfers, life expectancy serves the institution to determine the cost of those measures and, as such, should be used, as it adjusts budgets and gives governments an idea of the resources needed to grant the transfers.

Applying a factor that takes into account life expectancy may result in the most disadvantaged and needy classes receiving less economic or social transfer

From the point of view of the benefit to be paid, again the question must be asked: what do I want to cover? and perhaps the most difficult one, to whom?

If I apply a factor that takes account of life expectancy, it may be that the most disadvantaged classes, who are most in need, receive less economic or social transfer than those who do have the means, because they have a better social position, better employment contracts or are in good health.

Depending on the interests of the parties involved (government, political parties, trade unions, etc.), the indicator can be used for whatever you want, but the consequences once the decision has been taken are clear.

The answer to this question must begin by laying the foundations of what I understand by the Welfare State (WS), as not all people, and certainly not all States, understand the same thing, nor do they have the same priorities when it comes to setting out their different policies to achieve this WS.

We will understand the Welfare State as the set of activities developed by governments in order to meet social and redistributive needs that enable individuals to achieve their life goals regardless of their race, origin or social class, and all with a public budget from the State.

Having established this first element, the second aspect would be to design such policies, and here, in addition to talking about pensions which could be the most direct idea between EB and life expectancy, we should talk about dependency, long-term care, housing, health and education, policies which will be key to establishing the EB of the 21st century.

In order to design these policies, it is necessary to establish indicators that, at the same time, allow the results obtained to be evaluated in order to redefine policies in the future (continuous cycle).

Providing long-term care, in addition to traditional home help or residential services, requires a rethinking of housing policies

Establishing life expectancy as a reference indicator should make us reflect on the implications it has. The first and immediate one is that the increase in life expectancy is an achievement of the most developed societies since their inhabitants, when they are born in that country, have the possibility of living more years, but we must look at how we live those years and with what quality of life, which affects the other policies we have pointed out previously. Living longer means that, once the retirement age has been reached, there are still years ahead of us, which directly affects pension and long-term care policy, since living longer implies higher levels of dependency, which increases in older people. Taking care of long-term care, in addition to the traditional services of home help or residences, requires a rethinking of housing policies. It is necessary to bet on alternative models to property and move to models of sharing, cohousing or reverse mortgage to improve the living conditions and means that we can have when we are older dependents. The same goes for education. We have moved on to a model of continuous training throughout life and we must continue to think about making training attractive and motivating in such a way that it allows us to continue to achieve dreams for all those of us who believe that education makes us all equal.

Por supuesto que sí, y no solo la esperanza de vida sino también la esperanza de vida saludable y atendiendo a las diferencias por edad, y recalculando dichas esperanzas de vida en diversos momentos de la vejez por cuanto no es lo mismo, por ejemplo, la esperanza de vida a los 60 años que a los 75 y eso también debe tenerse en cuenta en el momento de elaborar las políticas del estado de bienestar. El alargamiento de la esperanza de vida a los 75, por ejemplo, conllevará necesidades futuras en el ámbito doméstico, ajustando las infraestructuras de los hogares a esas necesidades de la gente mayor, las cuáles redundaran en una mejora de la salud al reducir los riesgos de accidentes y mejorar la autonomía personal.

No solo habrá que considerar como indicador la esperanza de vida sino también la esperanza de vida saludable

Any rigorous research work on pensions, health or dependency will inevitably refer, more or less extensively, to the demographic component of the population under study. And this reference, generally, will refer to the ageing of the population, represented in its maximum exponent by the increase in life expectancy during the 20th century as one of the greatest demographic achievements of human beings throughout history.

In this respect, the set of sociodemographic changes at the end of the past century and beginning of the present in the developed countries have given rise to the generation of new scenarios for economic policy in general (changes in income generation, consumption, saving and investment patterns) and for social and health policies in particular (where resources are obtained and what their uses will be), which are particularly complex and tangible in the current situation of the SARS-CoV-2 pandemic. Ageing and longevity are driving, in areas such as social and health policy - and their necessary intersection, the social and health care system - together with pensions, the specific design of strict actions within the specific protection systems of the States. Specifically, the trinomial of ageing, health and dependence entails an inexorable increase in both the absolute and relative prevalence of demographic dependence and morbidity. Its most immediate consequence refers to the significant impact on the public expenditure of states (where resources are scarce), which in turn has a direct and indirect effect on the population's pockets. Directly, because the beneficiaries of public benefits (whether monetary or services) often require specific ad hoc financial contributions through co-payments; and indirectly, because public income comes from the public treasury financed by individuals.

Therefore, life expectancy plays a transcendental and irreplaceable role in the design of any Welfare State policy, from different prisms. For example, the ageing of the current population (20% of the population in Spain is over 65 years old, and 20% of this segment is over 85 years old; and where more than 12,000 people are over 100 years old) reveals the need to pose new challenges in terms of care for the specific group of older people, such as long-term care. This care goes beyond the traditional social or health intervention (increase of public expenditure around 1% GDP).

Another example of this involvement is the necessary modification of the balance of intergenerational balances in terms of rights, obligations, responsibilities and contributions. In the end, who benefits from what and at the expense of whom adopts rigorous drifts in the broad life cycle of people: not only in the biological, but also in the demographic and economic-financial one, which takes on an essential role both for individuals (how they optimally distribute their financial resources throughout their life cycle (and that of their ascendants/descendants) and for the legislator (balance in the resource-employment binomial). A third inescapable prism of involvement refers to the design of families: the structure, composition and characteristics of today's family are modified by the new times that are occurring, as a consequence, among others, of the increase in life expectancy, and which establishes certain implications that condition the design of welfare policies by the legislator.

People's life expectancy is postulated as a powerful indicator for the design of Welfare State policies

In conclusion, people's life expectancy is postulated as a powerful indicator for the design of Welfare State policies, the achievement of which in the increase of years lived should not imply reticence in the design of policies, and whose impact on the financing of the same should not generate a climate of discussion beyond what is strictly reasonable and necessary.

The financing of most public pension systems, including the Spanish one, is based on the pay-as-you-go system in which the contributions of active workers are used to finance the pensions that exist at the moment, which is known as the principle of intergenerational solidarity. The decline in the birth rate and the increase in life expectancy point to an increase in the dependency ratio, defined as the ratio of the population over 65 years of age to the active population, which raises concerns about the financial sustainability of pay-as-you-go pension systems. 

In Spain, life expectancy at 65 years of age in 1975 was 15, while it currently stands at 21.5. This means that the pension will be paid for more years. In countries such as Finland and Portugal the amount of the initial pension is already linked to changes in life expectancy. Similarly, in countries that use national accounts in their public pension systems, such as Sweden, Italy, Poland, Latvia or Norway, the calculation of pensions depends mainly on the individual amounts contributed and the life expectancy of the worker at the time of retirement. 

Taking life expectancy into account in the design of pension systems will limit the growth of pension expenditure and thus, in the long run, this measure contributes to an improvement in the financial sustainability of pension systems. However, it is important to stress that even in this case, sustainability will not be guaranteed. In order to ensure financial sustainability, other types of automatic financial adjustment mechanisms should be applied. Such mechanisms would be defined as a set of pre-determined measures to be applied immediately when an indicator relating to the financial health of the system so requires. Countries such as Sweden, Japan or Canada have legislation on such mechanisms. 

Another important issue if life expectancy is taken into account in the calculation of pensions would be the intra-generational redistribution that takes place. The use of average life expectancy between men and women would result in a transfer from men who live on average fewer years to women. On the other hand, people with a higher socio-economic status and higher wages live, on average, more years. The majority in this group are men, so the net effect of using average life expectancy would be unclear and would need further study in the field of public pensions. 

Linking life expectancy to public pensions is necessary but not sufficient to ensure the long-term sustainability of the system

In conclusion, linking life expectancy to pensions is necessary but not sufficient to ensure the long-term sustainability of the system. Further measures - automatic financial adjustment mechanisms - are therefore inevitable. A thorough analysis of the redistribution that occurs when any type of measure is adopted in the public pension system should also be carried out as the effect may not be as desired initially. 

Life expectancy indicates the expected number of years a person will live at a given age, i.e. the life expectancy of that person at that particular age. It is a measure that can be very useful when, for the purpose at hand, a single measure summarising that expectation is sufficient.

However, on other occasions other "detailed" measures are necessary, such as, for example, the probability of survival of the subject - active, disabled or dependent worker - in each of the future periods (years, semesters, quarters, bimonths, months).

This is the case with any policy that requires the precise estimation of the expected future periodic costs that it will involve in the long term, such as, for example, any public pension, both contributory and non-contributory, or a minimum income or minimum living income scheme, or a dependency benefit scheme, among others.

Therefore, as an actuary, I am not in favour of the generalised use of life expectancy, as it is only a summary measure of other variables that may be more relevant and useful, and, if used in the previous cases, it produces the fiction that the period over which the measure or policy is applied coincides with that measure - as if it were a certain period of time, as well as that all future costs are of the same amount - there will be no revaluation of pensions, for example - and have the same value at the time they are estimated, thus implying a "fat brush" treatment leading to an under- or overestimation of expected costs.

Widespread use of life expectancy as an indicator may lead to an underestimation or overestimation of expected costs

That is why, for example, in the case of contributory public retirement pensions, I am against the sustainability factor that was introduced with Law 23/2013, the application of which has been suspended, as there are more precise ways from an actuarial point of view of helping the sustainability of the social security pension system by ensuring that the amount of the pension is in a more balanced relationship with the probability of the pensioner being alive at each of the future pension maturities.