Ageing populations, their fiscal implications and policy responses

Vassiliki Koutsogeorgopoulou and Hermes Morgavi

No 1844, OECD Economics Department Working Papers from OECD Publishing

Abstract: Populations are ageing in most OECD countries, as life expectancy increases and fertility rates decline. Living longer and ageing in better health are undoubtedly major accomplishments. The rapid ageing of societies, however, also poses important challenges. This paper provides a comprehensive assessment of the long-term implications of population ageing for public finances, drawing on the OECD Long-Term Model and previous analytical work. It develops an analytical framework to quantify the fiscal effects of ageing, examining rising pressures on pensions, health, and long-term care spending, as well as potential impacts on public revenues and debt dynamics The paper highlights the need for a comprehensive policy response that combines fiscal and structural reforms, providing policy directions to address the fiscal impact of population ageing through promoting healthy ageing, reforming pension systems, enhancing efficiency in healthcare and long-term care, broadening tax bases, and boosting labour force participation among older workers and under-represented groups. These policy efforts can be complemented by measures to boost fertility and immigration.

Keywords: Ageing; demographics; fertility; fiscal; health; labour; lifelong learning; longevity; migration; pension; spending (search for similar items in EconPapers)
JEL-codes: F22 H51 H55 H60 I18 J11 (search for similar items in EconPapers)
Date: 2025-10-21
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1844-en

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