Ageing populations, their fiscal implications and policy responses - No. 1844 - Working paper

Aug 28, 2026

Uploaded by Connor

Ageing populations across most OECD countries raise major long-term challenges as life expectancy increases and fertility rates decline. This working paper assesses the fiscal implications for public finances using the OECD Long-Term Model and related analytical work, outlining how ageing drives rising pension, health, and long-term care spending, and influences revenues and debt dynamics. It proposes a comprehensive policy response combining fiscal and structural reforms to promote healthy ageing, reform pensions, enhance healthcare and long-term care efficiency, broaden tax bases, and raise older-worker and underrepresented-group labour force participation, with supporting fertility and immigration measures.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages60

Reading Time2 h 31 min

AccessFree to download

ABSTRACT

Fiscal implications and long-term assessment

Policy responses and reform directions

OECD Economics Department Working Papers Ageing populations, their fiscal implications and policy responses By: Vassiliki Koutsogeorgopoulou and Hermes Morgavi No. 1844 OECD Economics Department Working Papers Ageing populations, their fiscal implications and policy responses No. 1844 This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD. Working Papers describe preliminary results or research in progress and are published to stimulate discussion on a broad range of issues on which the OECD works. Comments on Working Papers are welcomed, and may be sent to the OECD Economics Department. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Attribution 4.0 International (CC BY 4 .0) This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence ([https://creativecommons.org/licenses/by/4.0/).](https://creativecommons.org/licenses/by/4.0/).)[ ](https://creativecommons.org/licenses/by/4.0/).)[Attribution](Attribution) – you must cite the work. Translations– you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid. Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or ofits Member countries. Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement. You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work. Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France) . The number of arbitrators shall be one. ABSTRACT/RÉSUMÉ Ageing populations, their fiscal implications and policy responses Populations are ageing in most OECD countries, as life expectancy increases and fertility rates decline. Living longer and ageing in better health are undoubtedly major accomplishments. The rapid ageing of societies , however, also poses important challenges. This paper provides a comprehensive assessment of the long-term implications of population ageing for public finances, drawing on the OECD Long-Term Model and previous analytical work. It develops an analytical framework to quantify the fiscal effects of ageing, examining rising pressures on pensions, health, and long-term care spending, as well as potential impacts on public revenues and debt dynamics The paper highlights the need for a comprehensive policy response that combines fiscal and structural reforms, providing policy directions to address the fiscal impact of population ageing through promoting healthy ageing, reforming pension systems, enhancing efficiency in healthcare and long-term care, broadening tax bases, and boosting labour force participation among

FAQs

What are the main fiscal pressures caused by population ageing?

Population ageing increases pressures on pensions, health, and long-term care spending, with effects also seen in public revenues and debt dynamics.

Which analytical tools does the paper use?

The paper draws on the OECD Long-Term Model and previous analytical work to quantify the fiscal effects of ageing.

What policy responses does the paper recommend?

It recommends combining fiscal and structural reforms, including promoting healthy ageing, reforming pension systems, improving healthcare and long-term care efficiency, broadening tax bases, and boosting labour force participation among older workers and under-represented groups.

Aug 28, 2026

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