Ageing Report 2018
Every three years long-run projections of age-related expenditure items (pensions, health care, long-term care, education and unemployment benefits) are being estimated at the EU level. This is known as the “Ageing Report” (AR). The AR 2018 was published on May 25th, 2018.
The projections (2016 to 2070) are based on demographic projections provided by Eurostat (in cooperation with national statistical agencies) and on commonly agreed macroeconomic assumptions for every EU Member State as well as for Norway. Whilst expenditure projections for health care, long-term care, education and unemployment benefits are being carried out by the European Commission (in coordination with national experts), projections for pension expenditures are being produced by the Member States themselves. The Austrian pension projections are a result of cooperation between the Austrian Federal Ministry of Finance, the Austrian Federal Ministry of Labour, Social Affairs, Health Care and Consumer Protection as well as Statistics Austria.
The demographic projections by Eurostat result in an increase of the Austrian total population from 8.7m people (2016) to about 10.2m people by 2070. As the baby-boom-generation will reach the retirement age within the projection period as well as due to an general increasing life expectancy the old-age dependency ratio (the ratio of persons 65+ years in relation to the age cohort 15-64 years) is going to almost double from 27.6% (2016) to 54.4% (2070).
The expected increase of participation rates in the labour force projections reflects the rise in participation rates of women and the elderly. Total participation rates (for the age cohort 15-64) will increase by 3.1 percentage points from 71.6% (2016) to 74.7% in 2070.
According to the projection results gross public pension expenditures are projected to rise by 0.5 percentage points to 14.3% of GDP by 2070. However, the largest expenditure growth is being expected to take place in the areas of long-term care and health-care. There the increase in expenditures is projected to amount to 1.9 percentage points to reach 3.8% of GDP and to 1.3 percentage points to reach 8.3% of GDP, respectively. Education expenditures are expected to remain fairly stable at 4.9% of GDP. A decreasing trend is being projected for expenditures for unemployment benefits to 0.7% of GDP (-0.2 percentage points).
In sum this leads to an increase of total age-related expenditures by 3.6 percentage points until 2070 to 32.1% of GDP.