Projecting the future cost of the French elderly disabled allowance using a microsimulation model
Confronted with an ageing population, developed countries are facing the challenge of providing care to a growing number of disabled elderly people. Knowing how many they will be and, given the current pensions and welfare systems, how much it will cost to care for them is crucial to policymakers. The INSEE pensions microsimulation tool (called Destinie) was extended in 2011 to elderly disability, in preparation for a reform of the funding of elderly disability in France. Microsimulation at the individual level allows to take into account expected changes in the distribution of variables that influence the process under study. It also allows to simulate allowances based on complex, non-linear scales that require calculation at the individual level. This document describes the implementation method and the results of the forecasts. First, on the characteristics of the disabled elderly and presence of caregivers. Then, several alternative scenarios are studied and yield a range of estimates of the future cost of the allowance for elderly disability, ranging from 0.54% of GDP in the most optimistic scenario to 0.71% of GDP in the most pessimistic one.
Old age disability in France: a long run projection
We carry out microsimulations of the number of elderly disabled people by year 2040, according to various assumptions on the evolution of disability. We use data from the HID survey, a two-wave panel, which makes it possible to estimate transitions towards or out of disability. These transitions, as well as the disability rates at the beginning of the simulation, are then implemented in the microsimulation model Destinie. Estimations of the number of elderly disabled people are very sensitive to the assumptions: by year 2040, it varies from 1 to 1.5 million people. According to the central scenario, in which the life expectancy with disability at age 60 remains stable, there should be 1.2 million disabled elderly people in 2040, which means a 43% increase compared to 2000. The average number of potential helpers (spouse and children) tends to decrease in the future, because of the fall of fertility and the increasing number of divorces: over the next 40 years, the number of potential helpers for each disabled person should decrease from 2.8 to 2.2 for men and from 2.2 to 2.0 for women. The number of disabled people without spouse nor valid child should increase from 130 000 today to 160 000 in 2040. The annual public expenditures related to Apa (the disability allowance targeted toward elderly people) should increase from 3 billion euros to 3.4 billion in 2040, with unchanged legislation. This small evolution is due to the assumption of a price-indexed schedule. Such an assumption has two effects. It means that the maximum value of the benefit would remain stable in constant prices, and it means that the share of this maximum value actually paid to beneficiaries would decline over time, since this share depends on household resources : even if pensions are themselves price-indexed, their average level will increase significantly due to the renewal of cohorts of pensioners, so that this share should mechanically decline. The total cost of Apa for public finances should therefore increase much less rapidly than the number of elderly disabled persons. Results are markedly different if we assume an indexation of Apa on wages. Such an assumption takes a better account of likely changes in costs of caring to disabled people : it would lead to an annual public cost of about 8.7 billion euros in 2040.
Projections de population active à l'horizon 2050: des actifs en nombre stable pour une population âgée toujours plus nombreuse
[fre] Projections de population active a l'horizon 2050: des actifs en nombre stable pour une population âgee toujours plus nombreuse . . La revision a la hausse des estimations de population ainsi que les changements recents dans la legislation des retraites amenent a s'interroger sur le niveau a venir des ressources en main-d'oeuvre en France metropoli¬ taine et sur leur composition. La projection tendancielle de population active qui pro¬ longe les tendances observees en matiere d'activite, de fecondite, de mortalite et de migrations, en s'affranchissant des variations conjoncturelles, apporte un element de reponse essentiel. La croissance du nombre d'actifs se reduirait progressivement jusqu'en 2015. Le nombre d'actifs se maintiendrait ensuite entre 28,2 et 28,5 mil lions. Les gains en activite viendraient de la poursuite de la generalisation de l'activite feminine et des seniors, plus souvent actifs en raison d'etudes plus longues et de la nouvelle legislation des retraites. Neanmoins, du fait de la croissance de la population âgee, en 2050 il n'y aurait plus que 1,4 actif pour un inactif de plus de 60 ans, contre 2,2 en 2005. Autour de cette projection tendancielle, des scenarios alternatifs permettent de mesurer l'ampleur des ecarts qu'induiraient des evolutions demographiques ou d'ac tivite differentes. Une autre hypothese sur le solde migratoire aurait un effet immediat sur le nombre d'ac¬ tifs alors qu'une remontee ou une baisse de la fecondite ne jouerait qu'apres 2025. Toutes les variantes sur les comportements d'activite ou demographiques envisa¬ gees n'ont cependant que peu d'impact sur le rapport entre actifs et inactifs de plus de 60 ans. [spa] Proyecciones de poblacion activa en el horizonte 2050: activos en numero estable para una poblacion anciana cada vez mas numerosa . . La revision alcista de las estimaciones de poblacion asi como los recientes cambios en la legislacion de las jubilaciones plantean la cuestion del futuro nivel de los recursos en mano de obra en Francia metropolitana y de su composicion. La proyeccion tendencial de poblacion activa que pro¬ longa las tendencias observadas en cuestion de activi¬ dad, fecundidad, mortalidad y migraciones, franqueando lasvariaciones coyunturales, proporciona un elemento de respuesta esencial. El crecimiento del numero de activos se reduciria progresivamente hasta 2015. Enseguida el numero de activos se mantendria entre 28,2 y 28,5 millo nes. Las ganancias en actividad vendrian del proceso de generalizacion de la actividad femenina y de los seniors, activos mas a menudo a causa de estudios mas largos y de la nueva legislacion de jubilaciones. Sin embargo, debido al crecimiento de la poblacion anciana, en 2050 solo quedarian 1,4 activos por cada inactivo de mas de 60 anos, contra 2,2 en 2005. Alrededor de esta proyeccion tendencial, escenarios alternativos permiten medir la amplitud de los desvios que comportaria evoluciones demograficas o activida des diferentes. Otra hipotesis sobre el saldo migratorio es que tendria un efecto inmediato sobre la cantidad de activos, mientras que un despunte o una bajada de la fecundidad solo serian perceptibles a partir de 2025. No obstante, todas las variantes sobre los comporta mientos de actividad o demograficos planteados ape nas repercuten sobre la relacion entre activos e inacti vos de mas de 60 anos. [ger] Vorausschatzung der erwerbstatigen Bevolkerung bis 2050: stabile Zahl der Erwerbstatigen bei einer zunehmend alten Bevolkerung . . In Anbetracht der Tatsache, dass die Bevolkerungsschatzungen nach oben korrigiert und die Rentengesetze kurzlich geandert wurden, stellt sich die Frage, uber welche Humanressourcen Kontinentalfrankreich in Zukunft verfugen wird und wie diese sich zusammensetzen werden. Die Trendschatzung der erwerbstatigen Bevolkerung, die an die festgestellten Trends der Erwerbstatigkeit, Fertilitat, Sterblichkeit und Migration unter Bereinigung um die Konjunkturschwankungen anknupft, liefert ein wichtiges Element zur Beantwortung dieser Frage. Bis 2015 wurde sich die Zunahme der Erwerbstatigen schrittweise verlangsamen. Danach wurde die Zahl der Erwerbstatigen zwischen 28,2 und 28,5 Millionen verbleiben. Die Gewinne im Hinblick auf die Erwerbstatigkeit ware auf die weitere Verallgemeinerung der Erwerbstatigkeit der Frauen und der Senioren zuruckzufuhren, die aufgrund der langeren Ausbildung und der neuen Rentengesetze haufiger berufstatig waren. Wegen des Anstiegs der alteren Bevolkerung wurden aber 2050 nur noch 1,4 Erwerbstatige auf einen Nichterwerbstatigen von uber 60 Jahren entfallen gegenuber 2,2 im Jahr 2005. Bei dieser Trendschatzung kann mit alternativen Szenarios der Umfang der Abweichungen gemes¬ sen werden, die unterschiedliche Entwicklungen der Demografie oder der Erwerbstatigkeit zur Folge hat¬ ten. Eine andere Hypothese fur den Migrationssaldo wurde unmittelbar die Erwerbstatigenzahl beeinflussen, wohingegen ein Anstieg oder ein Ruckgang der Fertilitat erst nach 2025 spurbar ware. Alle denkbaren Varianten fur die Verhaltensweisen bezuglich der Erwerbstatigkeit oder der Demografie haben jedoch auf das Verhaltnis zwischen Erwerbstatigen und Nichterwerbstatigen von uber 60 Jahren nur wenige Auswirkungen. [eng] Projections for the Labour Force in 2050: a Stable Working Population for an Increasing Large Elderly Population. . . The upward revision of population estimates and recent changes in retirement legislation raise questions about the future level of labour resources in mainland France and their composition. A basic and partial answer is provided by the trendbased projection for the labour force, continuing the trends observed in working life, fertility, mortality and migration, without the influence of cyclical variations. The growth in the workforce will gradually slow until 2015 then it will remain steady at between 28.2 and 28.5 million. Gains in activity will come from the more widespread practice of women and senior citizens work¬ ing they will be employed more frequently because of having spent longer in the education system and new retirement legislation. Nevertheless, due to growth in the elderly population, in 2050 there will only be 1.4 working persons for every non-working person over 60, compared with 2.2 in 2005. Alternative scenarios coexist with this trend-based pro¬ jection, which allow us to calculate the size of the devia¬ tion to which demographic changes or different working patterns could lead. Different assumptions about net migration would have an immediate effect on the work¬ ing population, whilst rising or falling fertility would not have an effect until after 2025. However, all the varia¬ tions in the workforce or demographic behaviour which have been considered would only have a minimal impact on the ratio of working people to non-working over 60s.