LEPAS at a glance
The EU member countries will be increasingly populated by older people. Nearly 25 percent of people in the European Union in 2030 can be above age 65, up from about 17 percent in 2005. Europe's old-age dependency ratio (the number of people age 65 and older compared with the number of working-age people ages 15-64) could more than double by 2050, from one in every four to fewer than one in every two. This is an unprecedented phenomenon with potentially very important implications on society that are far from being well understood.
The LEPAS project integrates into modern dynamic macroeconomics a biologically founded process of individual ageing, i.e. ageing understood as the gradual deterioration of the functioning of body and mind.
Our project investigates theoretically and quantitatively how ageing affects health and productivity. Using models of endogenous economic growth we assess how the feedback effects of ageing on investment and education affect long-run economic growth, competitiveness, and welfare of the EU member countries. With multi-country models we analyze how ageing influences human capital formation and migration flows in Europe. Using models of optimal retirement decisions we investigate how ageing impacts on the contribution and employability of older workers and how this feeds back to issues of intergenerational solidarity. With models of endogenous R&D we explore how ageing interacts with technological progress and assess how ageing will affect the EU's capacity to innovate and to develop. We investigate how ageing interacts with health demand and supply and how this feeds back to the macroeconomy. We assess whether the EU's market economies and public sectors provide too much or too little health care.