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1 The impact of the aging and the role of research Richard Suzman Director, Behavioral and Social Research Program National Institute on Aging, NIH Brussels March 22, 2006 Department of Health and Human Services

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2 Research on Aging Need to understand the macroeconomic and social aspects of population in order to minimize the negative and increase the positive Need to find ways to increase health expectancy by decreasing age-related physical and cognitive disability Critical to deal with Alzheimers Disease Europe has nothing quite like the NIH ($28B)or NIA ($1B) and until recently investment in research on aging, including research infrastructure, was far too modest EU Survey on Health Ageing and Retirement (SHARE) a good beginning

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Department of Health and Human Services National Institute on Aging National Institutes of Health

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National Institute of Allergy and Infectious Diseases National Institutes of Health National Institute on Aging Office of the Director National Institute on Alcohol Abuse and Alcoholism National Institute of Arthritis and Musculoskeletal and Skin Diseases National Cancer Institute National Institute of Child Health and Human Development National Institute on Deafness and Other Communication Disorders National Institute of Dental and Craniofacial Research National Institute on Drug Abuse National Institute of Diabetes and Digestive and Kidney Diseases National Institute of Environmental Health Sciences National Eye Institute National Institute of General Medical Sciences National Heart, Lung, and Blood Institute National Institute of Neurological Disorders and Stroke National Institute of Nursing Research National Institute of Biomedical Imaging and Bioengineering Fogarty International Center National Human Genome Research Institute National Center for Research Resources Center for Information Technology Center for Scientific Review National Institute of Mental Health 2001 Center for Alternative Medicine National Center on Minority Health & Health Disparities

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NIA Mission vEstablished in 1974 to support and conduct research on aging processes, age-related diseases, and special problems and needs of older people vExamining the Biology of Cellular Aging vPreventing or treating Alzheimers disease vReducing old age Disability -a final pathway vMacro aspects of population aging

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NIA Extramural Programs Geriatrics and Clinical Gerontology Biology of Aging Neuroscience and Neuropsychology Behavioral and Social Research (BSR)

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8 GDP/per capita and Life expectancy Preston (1997 and 1996 )

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9 Total fertility rate and life expectancy at birth: World, 1950-2050 Total fertility rate (births per woman) Life expectancy at birth (years) The demographic causes of global population ageing:

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11 What Will Be the Major Population Trends Related to Aging in Europe? Will Europe continue to age faster than the US, and are official estimates of longevity too low? Will births increase? Will old age disability in Europe, parallel the US declining trend, do we have the data necessary to track disability (the ability to function in daily life)? Will Europes retirement age continue to decline?

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12 Are Actuarial Projections of Life Expectancy Too Low? Small increases in life expectancy over a number of years add up to very large increases in the size of age groups such as the Oldest Old, those 85+ Given 85+ disability levels, 85+ pop VIP Recent research suggests no end to gains in old-age life expectancy Obesity --Olshansky et. Al. NEJM

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13 Forecasts of the United States Population Aged 85 and Over 0.9 1.5 2.2 3.1 4.2 14.3 16.8 23.5 53.9 19601970198019902000 0 10 20 30 40 50 60 Population (In millions) 1960-2000 Actual 2040 Census Bureau middle mortality 2040 Census Bureau low mortality 2040 Guralnik et al. 2040 Manton et al. 2040 Sources: Guralnik et al. 1988; and Manton et al. 1993; and U.S. Census Bureau, 1983, 1992, and 2000b.

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14 Norway New Zealand Iceland Sweden Japan The Netherlands Switzerland Australia Female life expectancy in the record-holding country from 1840 to the present

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15 Vaupel et al., Science (1998) Mortality decelerates and human mortality at older ages has declined substantially Males = blue Females = red Shoulder of mortality Humans Blue = exponential curve fits data ages 80-84 Red = aggregation of 14 countries Light blue = fits all data best Green = quadratic curve, fits data at 105+

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16 Life Expectancy in G-7 Industrialized Nations, 2050 Source: Shripad Tuljapurkar, Nan Li and Carl Boe. A UNIVERSAL PATTERN OF MORTALITY DECLINE IN THE G-7 COUNTRIES. Nature 405: 789-792 (15 June 2000).

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Smoking and subjective probability to survive Subjective probability to survive: 50-64 => 75

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Over-weight and subjective probability to survive Over-weight: body-mass index > 30 Subjective probability to survive: 50-64 => 75

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19 The Worlds 25 Oldest Countries: 2002 (Percent of population 65 years and older) Source: U.S. Census Bureau

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20 Public Pension Expenditure as a Percent of Gross Domestic Product in 25 Countries: Circa 1997 Source: Palacios and Pallares-Miralles 2000. 15.0 13.3 12.0 11.6 10.2 9.7 7.2 6.6 6.4 5.9 5.7 5.0 4.7 4.6 3.7 2.7 2.4 2.1 1.6 1.0 0.8 0.6 0.4 0.3 Italy Uruguay France Germany Croatia United Kingdom Hungary United States Japan Cyprus Israel Russia Kazakhstan Brazil Australia Turkey China Sri Lanka Algeria Vietnam Ecuador Uganda Togo Mexico Cote dIvoire

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21 Projected Percent Increase in Elderly Population: 2000 to 2030 Source: U.S. Census Bureau

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22 Old Age Dependency Ratio

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23 Aging of boom generation can produce an opportunity for economic growththe past Higher proportion of people of working age can generate more income per capita With fewer children, families can work more, save more, and invest more in each child's education Result can be virtuous cycle of wealth creation the "demographic dividend

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24 Percent Change in Total Population for Selected Countries and Regions 2000-2050 (Source: United Nations Population Division, World Population Prospects, 1998 Revision) Ireland US France UK Germany E.U. Europe Japan Russ. Fed Italy

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25 Japan: declining pop. 1950-2050 Economist January 5th 2006

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26 Can work life increase? If yes, can it increase enough? The age of retirement has dropped steadily over the last century Comparative analyses (Gruber and Wise) suggest that the structure of public pensions affect how long people work, and that in countries in which work at older ages is taxed rather than rewarded, workers leave the labor force earlier

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27 Tax Rates and Unused Capacity in 11 Developed Countries: Circa 1995,,,,,,,,,,, 012345678910 Tax Force to Retire (55-69) 10% 20% 30% 40% 50% 60% 70% 80% Unused Productive Capacity (55-65) Japan US Canada Sweden Spain UK France Germany Netherlands Belgium Italy Source: Gruber and Wise 1999.

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28 Working-age Needed in 2050 To Retain the Potential Support Ratio Observed in 1995, UN Population Division Scenario II

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29 Replacement Migration: Can it stop declining and ageing populations? During the first half of the 21 st century, the populations of most developed countries are projected to become smaller and older as a result of below-replacement fertility and increased longevity In the absence of migration, the declines in population size will be even greater than those projected, and population ageing will be more rapid For the Eu-15 47.5 million immigrants needed to keep population constant to 2050, 79 million to keep working age population constant, and 674 million (13.5 million per annum) to keep support ratio (65+/15-64) constant United Nations Population Division, 2001

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30 Europe: migration that would be required to keep the ratio of ages 65+ to ages 15-64 at the level seen in 1995 Post-1995 migrants and their descendants would make up about 3 / 4 of the total population in 2050 Population in 2050 Population (millions) Will migration keep the potential support ratio from falling? NO United Nations Population Division

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31 NIA Initiative on Population Aging and Macroeconomics Implications of population aging for aggregate economic performance What are the known links between population aging and macroeconomics? 2004 Federal Reserve Meeting in Jackson Harvard-NIA workshop June 2005

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32 Discussion of key issues and promising research opportunities Participants identified six key issues and promising research areas: 1.Demographic forecasting 2.Savings, investment, and finance 3.Labor, human capital, and migration 4.Changes in sectoral structure 5.Public and private financing of pensions and healthcare 6.Economic growth

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33 Discussion of known links between population aging and macroeconomics No historic precedent for combination of demographic forces in operation: the demographic transition due to increased life span and fertility declines, the post World War II baby booms, and migration. Research offers little guidance to expected macroeconomic consequences Links between population aging and macroeconomics are likely mediated by the institutional context and the economic context. Aging is a global phenomenon: when looking at international issues such as labor migration and capital flows it is important to keep national demographic pictures in view, as well as their global context.

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34 Savings, investment, and finance Future population aging is expected to require increased current savings to finance more person-years spent living in partial or full retirement. The expected savings boost, will affect financial markets, rates of return, and thereby investment. International differences in demographic cycles will influence international capital flows.

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35 Labor, human capital, and migration Population aging will likely cause reductions in aggregate labor supply and will change the composition of the labor force. The prospect of labor shortages may also have large effects on the incentives for education and immigration and the development and reliance on new capital-intensive technologies.

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36 Labor, human capital, and migration (continued) An examination is needed of the extent accounting effects (based on applying an aging population to current age specific LF participation rates) may be offset by behavioral changes in retirement behavior, female labor supply, and part-time work patterns. The degree to which migration can offset population aging. To the extent that countries will rely on different mixes of policies and market mechanisms to cope with population aging, what tradeoffs will occur?

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37 Changes in sectoral structure The health and long-term elder care sectors are likely to expand with population aging. Will this happen in Europe to the same extent as in the USA? Specific research topics include: An assessment of the manner and extent to which the expansion of the health and long-term elder care sectors will affect the structure of the economy and economic growth. A forecast of the expansion of the health care sector, along with the need for workers in the health sector and financing requirements. An estimation of how much extra health will be produced by expansion of the health sector, under different assumptions about technological progress.

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38 Public and private financing of pensions and healthcare Financing of old-age pensions and healthcare costs involves both macro and micro issues, whose implications for macroeconomic performance and competitiveness deserve exploration. How reliance on employer health and pension benefits may affect the competitiveness of firms and increase international outsourcing.

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39 Massive Initiative needed on reducing old-age disability New epidemiological and molecular findings suggest that aging is quite plastic Molecular base being developed --cellular aging, apoptosis, telomere shortening, genetic manipulations increase life span in some species 30+. Mimic exercise and caloric reduction ? Understanding the social drivers Perfect multi-national initiative

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40 Number of Chronically Disabled Americans Age 65 and Over (In Millions) 4 6 8 10 1982 Total Population Age 65+ 26.9 Million 7.5 7.1 7.0 1994 Total Population Age 65+ 33.1 Million 1999 Total Population Age 65+ 35.3 Million 1989 Total Population Age 65+ 30.8 Million If disability rate did not change since 1982 Based on declines in chronic disability rate occurring since 1982 6.4 8.3 9.4 Source: National Long Term Care Surveys 1982-1999, (Kenneth Manton, Ph.D.) 21

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41 Projections of Number of Disabled Americans Age 65 & Over Source: National Long Term Care Survey 1982-1994 (Kenneth Manton, Ph.D.) Revised November 1999 (In millions) 22

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42 Ageing, Fitness, and Neurocognitive Function (PI: Edward McAuley, Art Kramer) Summary of Findings: Aerobic exercise resulted in improvement of executive control (frontal region tasks) but did not generalize to tasks not requiring executive control

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43 ACTIVE Advanced Cognitive Training for Independent and Vital Elderly RESULTS All interventions improved targeted cognitive abilities Training effects were durable to 2 years .

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44 Regimens can overcome education effects on adherence Years of Schooling (%) GRAPH A: GREATER EDUCATION = GREATER ADHERENCE GRAPH B: INTENSIVE REGIMENS = GREATER ADHERENCE FOR LESS EDUCATED

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Obese Are More Disabled Age Obese Not Obese Rate per 10,000 Source: Lakdawalla, Bhattacharya, Goldman, Health Affairs, 2004.

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46 Estimated Percentage of People over Age 65 with Probable Alzheimers Disease Age Group Percent Source: Evans D, et al. JAMA, Vol. 262, No. 18, 1989.

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47 Estimated Number of New AD Cases (in thousands) Number Source: Herbert et al. (2001). Alzheimer Dis Assoc Disord, 15(4), 169-173 There are currently 4.5 million Americans with AD. The cost of care is estimated at $100 billion per year.

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48 Projected Number of Persons with Alzheimers Disease Source: Evans, et al. Arch Neurol 2003; 60: 1119-1122. In 2000, there were 4.5 million Americans with AD with a cost of care estimated at $1 billion. By 2050, the number of Americans with AD will increase to 13.2 million.

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50 Progress in Alzheimer's Disease Research 190619901993198419951996199719981999 Dr. Alois Alzheimer describes the disease Amyloid sequenced Familial AD Chromosome 21 Amyloid mutation First Drug approved Cognex Chromosome 19 ApoE4 risk factor Familial AD Chromosome 1 Presenilin 2 Familial AD Chromosome 14 Presenilin 1 Second drug approved Aricept Plaque- making transgenic mouse model Estrogen and anti- inflammatories may slow development of AD Familial Dementia Chromosome 17 tau Mild Cognitive Impairment as AD risk factor Vaccine clears plaques in mouse model Tangle- making transgenic mouse model Discovery of enzyme making amyloid 1975 Deficit of acetylcholin e in AD Brain 27

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Funded AD Prevention and Selected Treatment Trials April 2002

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52 Data for Policy: US Health and Retirement Study (HRS) Meeting policy challenges requires both scientific understanding and data. Need understanding of determinants and consequences of, e.g., retirement decisions HRS is a premier that provides public data for of scientific and policy researchers of economic, health and demographic aspects of retirement and aging. Model for SHARE

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It is important to learn from one another how our policies and programs can promote active aging and advance structural reforms to preserve and strengthen our pension, health and long-term care systems. Our governments will work together to promote active aging through information exchanges and cross- national research. We encourage collaborative biomedical and behavioral research to improve active life expectancy and reduce disability, and have directed our officials to identify gaps in knowledge and explore developing comparable data in our nations to improve our capacity to address the challenges of population aging. Communique:The Denver Summit of the Eight 37

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NAS 2001 Report -- Preparing for an Aging World: A Case for Cross-National Research 1.Development and use of multidisciplinary research designs are crucial to production of data on aging populations that can best inform public policies. 2.Longitudinal research should be done to disentangle and illuminate complex interrelationships among work, health, economic status, and family structure. 3.National and international funding agencies should establish mechanisms that facilitate harmonization (and in some cases standardization) of data collected in different countries. 40

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NAS 2001 Report -- Preparing for an Aging World: A Case for Cross-National Research 4.Cross-national research, organized cooperatively, should be emphasized as a tool to help policy makers: evaluate institutional and programmatic features of policy related to aging in light of international experience, and assess more accurately the impact of potential modifications to existing programs. 5.Countries should aggressively consolidate information from multiple sources to generate linked databases. 41

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56 $ 3,922 $ 4,439 $ 4,940 $ 5,444 $ 6,304 1996 Per-capita Medicare Spending Average age-sex race adjusted per-capita Medicare spending Ratio: High to Low: 1.61

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* * * Israel SE DK IE DE CHAT FR SP IT GR BE NL PL CZ UK Principle 1: A laboratory for cross- national social science & policy analysis Korea Japan USA SV

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200658 SHARE wave 1 SHARE data collection April 2004-July 2005: about 27,000 individuals aged 50+ SHARE data release 1: April 2005 (release 2 in 2006) Wave 2: September 2006 (biannual spacing)

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200659 Purpose and Principles Main aims: General understanding of the impact that the ageing process will have on European societies on the individual and the societal level: description (indicators), stress on causal analysis Principle 1: Get the full picture: Health economic conditions family and social environment: the interactions are important Principle 2: Use European variation in policies, histories, cultures to understand causes and effects of welfare state interventions

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200660 Belgium funders SHARE was financed by several Belgian institutions, other than the European Union and NIA (400 vignettes households): The Science Policy Administration financed the main survey (1,500 households) and the Social Security Administration the Pretest (120 interviews). The Flemish region financed extra 700 household interviews (1st and 2nd wave). Also the Universities of Lige and Antwerp, as well as the Belgium National Bank supported our research (Pilot interviews). But other Belgian institutions support the project as well: the National Office of Pensions, the Scientific Institute of Public Health - Louis Pasteur, the National Institute of Statistics. SHARE users: the National Planning Bureau (in charge of Belgium long-term projections for the Government), and the recently created Federal Center of Expertise in Health Care (also known as Kennis Centrum).

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200661

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200662 Effort-reward ratio > 1.0 (%) Work quality Medium ( 30-40 % ) Low ( > 50% ) Poor ( 40-50% ) High ( > 30% )

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200663 Working conditions and the desire to retire earlier

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Mannheim Research Institute for the Economics of Aging OECD, 27 Feb 200664 Time assistance to older parents >= 35 % 25-34 %