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AXA Papers

AXA Papers No.3: Dependency

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Jun 22, 2012

Demographic aging appears to be an ineluctable outcome for all OECD countries and, more generally speaking, at the global scale. It is in fact due to a combination of several factors, the main one of which is increasing life expectancy.

A study by Christensen, Vaupel et al., which was published in 2009, estimates that one out of two children born in 2007 will live beyond the age of 100 in most Western countries. And one out of two children born in 2000 will live to be 101 in Denmark. The figure is 102 in Germany, 103 in the United Kingdom, 104 in France, Italy, Canada and the United States, and 107 in Japan.

Demographic aging that results from an increase in life expectancy, coupled with a low fertility rate and a low immigration rate, is a virtually undeniable trend. Conversely, when it comes to estimating the trend in terms of the numbers of individuals requiring long-term care, there is no real consensus. In fact, these estimates depend to a large extent on the trends in healthy life expectancy, and there is no absolute consensus in this area either.

Some demographers estimate that we are currently experiencing a phase of compression of morbidity (1). For them, healthy life expectancy is increasing faster than life expectancy. Others favor a stability scenario or even an expansion of morbidity following the increase in chronic illnesses related—for example—to diabetes and obesity. Nonetheless, even if the compression of morbidity scenario turns out to be accurate, any increase in the number of individuals reaching very old age would most likely lead to an automatic increase in the number of elderly people in need of long-term care (dependent elders).

In light of the forgoing, what mechanisms have been put in place, in the public and private spheres, to care for dependent elders? How is dependency defined and assessed? What is the future trend in the number of dependent elders?

  1. Dependency: the principal attributes
  2. Demographics and costs
  3. Response to the risk
  4. Modeling of the risk

(1) The morbidity rate is defined as the ratio between the number of people who suffer from an illness over a given period and the total population exposed to the risk of illness.