SustAgeable: Economic and social sustainability across time and space in an ageing society

01.10.2021 -

Research group

We are implementing the SustAgeable project in a consortium that includes
• Finnish Institute for health and welfare (THL)
• VATT Institute for Economic Research
• Finnish Centre for Pensions (ETK)
• University of Eastern Finland (UEF)
• University of Helsinki
• Labore
The research is funded by the Strategic Research Council which operates in connection with the Academy of Finland. The consortium is led by Maria Vaalavuo and Ismo Linnosmaa is in the lead of work package 5.

Ageing, expenditures, and cost-containment in health and long-term care (SustAgeable work package 5) investigates factors associated with health and long-term care spending in older population and proposes ways to mitigate cost increases in an equitable manner to promote both economic and social sustainability.

It is expected that population ageing will increase health and long-term expenditures risking the economic sustainability of Finnish national and local governments. Due to population ageing, the GDP share of health care expenditures in Finland is projected to grow from 6.1% to 6.9% from the year 2016 to 2070. The expected growth of long-term care expenditures is even higher, their share is projected to nearly double from 2.2% in 2016 to 4.2% in 2070. Against such expectations, researchers in health economics have challenged the idea that ageing would be factor explaining the growth of health care expenditures. Empirical research on the effects of ageing on per capita health care expenditures has indicated that the effect of patients' age disappears after controlling for patients’ time to death, but some authors find age to be important. Such results are critical for policy design as they are used in setting the level of future health care budgets, which makes the effect of ageing on expenditures a fundamentally important question.