The Financial Consequences of Population Aging

During the next five decades, Western populations will inexorably get older. Even if other phenomena are taken for granted, the lower the fertility, the more the aging process will be accentuated. One can expect large increases in public health costs and pension benefits that tax payers will bear, and that will be only partially compensated by a reduction in education cost. However, three measures could reduce these cost increases and the effect of each of them is estimated. As to the possibility that increasing productivity will check the growth of costs, the author has some reservations which challenge the conclusions of many former studies.