EUROPEAN PAPERS ON THE NEW WELFARE

Jobs-led development incorporating svecchiamento as an asset?

3. Ageing and counter-ageing

The fact that demography shows that in 50 years the number of persons over 65 will reach over 50% of those aged 20 to 64, and that the number of centenarians will keep increasing is called ageing. This ratio, 50%, is called dependency ratio suggesting that older persons entirely depend on those between 20 and 64.
Both statements are incorrect and in addition economically and socially unsustainable. First, life expectancy has dramatically changed during the last 100 years and it is currently increasing at a rate of 3 months per each year2. This means that a 70-year-old person today has a greater life expectancy than that of the 50-year-old a century ago, and the quality of life of the 70-year-old today is considerably higher than the 50-year-old had a century ago. It is useful to introduce the concept of the healthy active life expectancy (HALE) and again one concludes that persons over 70 and even older have healthy active lives19. Second, some great persons have done their most significant work when over 70. Work capacity and creativity beyond the age of 60 has to be studied, but it is expected that older persons and even oldest old can be socially active and creative. Third, old have experience that the younger generations simply do not have and that experience has to be used and not wasted. Fourth, even ill and disabled persons do not have to be entirely dependent on others.
Our words carry the connotation they have acquired through their usage. Therefore, the word ‘ageing’ implies the same meaning as it did a century ago, while we actually need a new word. The expression ‘counter-ageing’ has been proposed20, but we argue that the Italian translation — svecchiamento21 — is even better and we advocate its use.

4. Case study – Croatia

The population of Croatia in 1991 was 4.78 million, it decreased to 4.44 million in 2001 and it is expected to drop to 3.78 in 2040, when the percentage of those over 65 will be 21.7% compared to just 17.6% of those younger than 15. Out of about 4.7 million inhabitants in 1980, Croatia had 450 thousands retirees. Today the number of retirees has increased to over one million while the population has slightly decreased. The dependency ratio — percentage of retirees with respect to the total number of employees — changed from 23% in 1980 to an unacceptably high 75% in the year 2000. Pensions represent a huge 14% of the national GDP, an increase from 11.3% in 1990. Nevertheless, the average pension as a percentage of the average salary decreased from 60% in 1980 to about 40% in 2000. The GDP of Croatia in the year 2000 was 157 billion kunas (exchange rate 7 1 = 7.6 kunas), and in terms of purchasing power equivalent to about 7 6000 per capita. Social expenditure amounts to 26% of the GDP — the lion’s share goes to pensions (51%, i.e. 14% of GDP) and to health care (32.3%). The GINI income inequality index is 0.352, one of the highest among the countries in transition. Neither the Keynes-Beveridge welfare state nor the two additional pillars introduced in the Croatian pension system in 1999 can solve the problem22. A fourth pillar — part-time work and gradual change from full employment to retirement — is necessary.

5. Freedom, risk and creativity

Basic features of the contemporary world are globalization and fast changes. They are not imposed on us, they are created by us humans, and more precisely our creativity is their generator. Indeed, I create, I learn, therefore I change3. Development includes incremental, quantitative changes, kind of ‘more of the same’. However, it also includes fast changes producing qualitative transformation. It is because of these rapid changes producing qualitative effects that to be is becoming much more important than to have. Therefore, the essential resource is the human potential — underused and enslaved by prejudices and lack of education23, but also fearing risk taking. “People are the real wealth of nations. The basic purpose of development is to enlarge human freedoms… — human capabilities by expanding the choices that people have to live full and creative lives. And people are the beneficiaries of such development and agents of the progress and change that bring it about. This process must benefit all individuals equitably and build on the participation of each of them”.24
The middle age group — those between 25 and 60 — fathers and mothers — are least inclined to take risks, they cannot take risks since they have too many responsibilities. However, now, for the first time in history, there is a sizeable fraction of our population — those over 60 — that have experience and credentials, and in general should not have responsibility of taking care of anybody and could take risks. It is these characteristics — experience, credentials and preparedness to take risks — that make those over 60 a special asset in development strategies. A novel policy has to be formulated where all persons are employed regardless of age, but in different degrees — part time, different type of work (obviously neither in mining nor as ballerinas), a significant portion in research, advisory and teaching capacity, rarely in leadership roles, but frequently as role models. While older persons could take risks, and therefore could contribute to progress, they are — as we all are — prisoners of our prejudices, and their prejudices are ‘old prejudices’, sometimes incompatible with the age in which they live. The old used to have special authority. Though this feature is rapidly decreasing, they could still be a barrier if they remain in the position they had earlier.
Demographic transition requires lifelong education. Since it is superimposed on a fast-changing world, it is necessary to structure the lifelong education so as to assure more frequent changing of professions, and it could allow for considerably earlier inclusion in the job market than is currently the case. Rather than being a burden and a problem, demographic transition resulting in svecchiamento becomes an asset and an instrument stimulating the creation of the knowledge-based society. Each culture can and should find the best way of making svecchiamento an asset and in this process it will modify itself.

19 J.-P. Michel and J.-M. Robine, A New General Theory of Population Ageing, The Geneva Papers, 29, No. 4 (2004), 667-678.
20 Orio Giarini, An Ageing Society? No, a Counter-ageing Society, The Four Pillars, Geneva Association Information Letter, Geneva, August 2000.
21 R. Cagiano de Azevedo, Invecchiamento o svecchiamento: questo è il problema? Giornale dell’Istituto Italiano degli Attuari, 66 (2003) 119-144, Roma.
22 Ivo Šlaus, Knowledge-based society as a solution for unemployment and retirement problems, SEF 003, Warsaw, 19-21 November 2003, panel 40, Strategies and reforms for employment, retirement and pensions in an integrated Europe.
23 Aurelio Peccei, in Congressional Record — Senate S 8690, June 28, 1984.
24 The State of Human Development, Human Development Indicators (2004), p. 127.


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