In recent decades, elderly populations in most developed countries have increased considerably,
both in absolute and relative terms. This growth of the elderly share of the population
is mainly attributable to two demographic transitions: the (simultaneous) increase in
longevity and decrease in fertility. Additionally, for some European countries a third cause
of population aging can be distinguished: the aging of the baby boom generation. The extent
to which this third demographic transition contributes to population aging largely depends
on the country under consideration. In the Netherlands, the baby boom was larger and
lasted for a longer time. The aging of the Dutch population is therefore expected to reach its
peak at 2040, later than other western countries. The Dutch population aged 65 and older
increased from 770,500 in 1950 to 2,538,300 in 2010 which amounts to an increase of 329
percent. In relative terms, the proportion of the population aged 65 and above doubled, from
7.6 percent to 15.3 percent. However, population aging not only reflects an increasing share
of the 65+ population, but also changes in the age distribution within this elderly cohort.
The share of the very old has also gradually increased; the population aged 80 and above
comprised 12.9 percent of the 65+ population in 1950, but 25.5 in 2010, and is expected to
continue to rise to 33.3 in 2040 (Statistics Netherlands, 2011). As the first baby boomers have
reached the age of 65 in 2010, population aging will accelerate the coming three decades.
Population aging will definitely have a large impact on society in general and on social security
systems in particular. It challenges the financial sustainability of current pension and
health care systems. The extent to which population aging threatens this modern welfare
state largely depends on the underlying trend in ill-health, e.g. whether it is accompanied
by a compression or expansion of ill-health (Fries, 1980; Olshansky et al., 1991). A compression
of ill-health is likely to alleviate the societal consequences of population aging. It will
not only have enormous benefits for population health, but may help increasing the labor
force participation among the elderly and to reduce health care expenditures (HCE). The
objectives of this thesis are restricted to improved understanding of the relative impact of
population aging on the level of HCE.
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