The “unbearable” heaviness of elderly people’s burden on future generations?

 In Healthcare, Healthcare Financing
,

In the leaflet accompanying the government’s recent healthcare reform consultation document, it is stated that “[t]he ratio of our working age population (aged between 15 and 64) to the elderly population (aged 65 or above) is 6:1 at present, and will become 5:1 in 10 years’ time and 3:1 in 20 years’ time.” (emphases in the original) The consultation document observes that “in the foreseeable future, there will be less and less young people who can help share the livelihood expenses (including medical expenses) of the elderly population.” The government expects the elderly population to inevitably impose an “increasing” and “unbearable” burden on future generations. It appears rather heavy-handed that the government should attribute a future societal burden to the elderly with so much emphasis, the attribution therefore warrants critical scrutiny in the interests of averting a possible generation war and maintaining social harmony.

 

Ms. Lee Lai-Shan, Hong Kong’s Olympics gold medalist, once said on a TV-advertisement that raising a child could cost as much as 4 million dollars. While her estimation might be exaggerated, the truth is that the cost of child-rearing could be no less expensive than that of taking care of an elderly. In Australia, it has been estimated that the costs of child-rearing could be as high as 18% of GDP if forgone mothers’ earnings are included. What we are trying to point out is that the Hong Kong government has omitted one important dimension in the costing of an ageing population’s impact on the working-age population, namely, the reduction in the costs of child dependency. In an ageing society, the increase in the number of the elderly is accompanied by a decrease in the number of children. The decline in the number of children means a reduction in the child-rearing cost burdens on the working-age population. In other words, any increase in burden because of the aged may be offset by decreasing burdens arising from raising a family. Whether or not the burden of the elderly population is “unbearable” would depend on the relative costs of taking care of the elderly on one hand, and of children on the other. The government has yet to show us the relative costing.

 

Regarding the cost burdens of taking care of the elderly, the government’s analysis seems to implicitly assume that those aged 65 are frail, make no positive social or economic contributions, and are wholly dependent on the younger generations for livelihood. Such assumptions are highly contestable. An Australian study has the following observations: two-thirds of Australians over 80 do not require any help with self-care activities, older people normally do more voluntary work than young people, older people also make considerable informal contributions to their families, in terms of grand-parenting, financial assistance to their family members, house maintenance and other forms of support for their adult children and grandchildren. Research shows that many elderly people in Australia continue to make substantial financial transfers to their children until the age of 75. It has been estimated that all such family support and voluntary work on the part of elderly people can add up to as high as 7% of GDP. To the extent that the Australian experience has relevance for Hong Kong, a re-examination of the government’s negative portrayal of elderly people is in order.

 

Another erroneous assumption that the government appears to have made in its analysis is that everyone between 15 and 64 (the working-age population) is currently economically active. The assumption is obviously wrong. At any particular point in time, some in this age group will be in full-time study, some in part-time employment, some are unemployed, some engage in voluntary work, still others, mostly women, are involved in un-paid parenting and home-making. Thus, for any particular time frame, the number of adults participating in the formal labour market is a lot smaller than the size of the working-age population. To estimate the future trend of the size of the labour force, one has to probe for possible shifts in the relative proportions of the aforementioned sub-groups in the working-age population. Would a shrinking working-age population as the government forecasts create more job opportunities for those currently unemployed or encourage those in part-time employment and voluntary work to participate fully in the labour market? Would reduced child dependency help release productive force otherwise engaged in unpaid parenting and home-making into the formal labour market? Would increased labour participation by those currently less economically-active be sufficient to offset the forecasted contraction of the working-age population? It appears that these are pertinent questions that should be considered before one jumps to make alarming projections about the future.

 

On the basis of the above, it appears the government’s analysis is as yet too feeble to support its heavy-handed conclusion that the elderly population will impose “increasing” and “unbearable” burdens on future generations. Crying wolf with intimidating and emotion-instigating terms like “unbearable burdens” will also not be constructive for informed and rational policy deliberations.

 

 

George Cautherley (高德禮)

Convenor, Healthcare Policy Forum (醫療政策論壇召集人)

31 March 2008

 

 

Unpublished in manuscript

 

 

 

 

Facebook Comments
Recent Posts
The Professional Commons’s response on Healthcare Reform Second Stage Consultation 
Developing country park – from absurdity to reality
Taking stock of the local agricultural industry is more than a matter of market values (Chinese version only)
Our dignified autonomy: farmers for the umbrella movement (Chinese version only)
China survival tip: where in the world are Guangdong’s hazardous chemical wastes? (Chinese version only)
Political expectations of the new China-HK model in post-political reform Hong Kong (Chinese version only)

Start typing and press Enter to search

Home
Home