Aging: Uncertainties and Solutions

September 17th 2012 - 12:58
In Dutch society, a situation of ‘double societal aging’ exists: an increasing proportion of the population is becoming retired, whilst average life expectancy is increasing. This can lead to an undesirable situation for public finances, because health care costs and the government’s contribution to AOW (the Dutch general seniority law, Algemene Ouderdoms Wet) as a proportion of gross domestic product (GDP) could further increase.

The challenges posed by an aging population are highly complex and surrounded by deep uncertainties, such as developments in labor productivity and the thereto linked GDP, life expectancy, the proportion of the population that lives unhealthily, and the health care demand of older people. The result of this is a wide array of future scenarios for the financial sustainability of the Dutch social model.

The methodology Exploratory System Dynamics Modeling and Analysis (ESDMA) generates thousands of plausible scenarios in order to explore the uncertain effects of complex future issues. Within these scenarios, undesirable situations and their causes are identified. Then, policies that can mitigate these undesirable situations are tested for their robustness across the range of uncertainties, i.e. over all of the scenarios.

Michel Rademaker is the Deputy Director of HCSS. He has a degree in Transport and Logistics, which he obtained at the University of Tilburg. He has fifteen years of hands-on experience as an officer in The Royal Netherlands Army, where he held various military operational and staff posts and also served a term in former Yugoslavia. After leaving the armed forces, Mr. Rademaker went on to work at the Netherlands Organisation for Applied Scientific Research (TNO) as a project and program manager and senior policy advisor for ten years.