Economics of Aging in Terms of How it Relates to Long-Term Care Facilities - Essay Example

Introduction Economic aging is an exercise that entails thorough research on the health and economic conditions of citizens in a particular territory, as well as the implications to the older people in the long term. Economics of aging lays focus on the demographic trends of the population and the implications of population trend changes on the economy of the area under consideration. From the available information worldwide, it is well documented that the steady low fertility rate will have unavoidable results in the economy in terms of the age difference and so will be the generational gap. As a way of example, China’s one-child policy indicates that twenty years from now, the nation’s aging curve will be steep, meaning that most of its population will be composed of old people compared to youths. Elsewhere in France, fourteen years from today, 2025 demographic trends indicate that four out of ten people will be fifty years or older. Reasons for being priced out Political measures taken to improve the economic conditions of different territories in the world affect some groups of people adversely, especially the aged. As an example the U.S underfunding of long-term Medicare and social security affects people negatively in the long-term. The people have to work harder to cater for the deficit, or alternatively reduce the present standards of living in order to suit future cash requirements on this regard, only few people of the entire population are financially prepared for this challenge (Wise, 1987). Changes undertaken in the financial sectors for the betterment of long-term savings of the working people have great impacts in the future outlook in the future savings. Taking U.S economy as an example, for the last twenty five years, defined benefit pensions, which used to be the primary means of retirement savings has eventually been replaced by personal retirement accounts. This transition has very strong effects with regard to worker participation and the saving rates. It is most probable that participation and saving rate will be more when there is a form of regulation, meaning that an automatic enrollment is adopted and people at a certain bracket qualify for participation in the scheme by default. On the side of the personal retirement accounts, some form of autonomy is given to the contributors, this meaning that the relaxed regulations makes some people weigh the issue of participating or not. In the long-term, some people may be left out of the contributors (Schulz, 2001). The way the contribution scheme is designed also has effects on the number of people participating in the saving for future. Using the above example, complications arising from establishing individual account in the social security system can be illustrated. From a perspective of time saving, many people try to avoid as much as they can tedious and cumbersome processes in getting services from an institution. Continued inflexibility and rigidity of the social security systems may discourage a group of potential contributors, making them stay out of the system. This thus affects the total amounts of contributions from the economy (Clark, 2004). Of great concern to any contributor in an investments group or an informal rotational group is the individual benefits received at the end of a specified period of time. In a social security system, great emphasis is laid in investments returns that will guarantee returns, and thus assuring the people their money after a long period of time. It goes without saying that the workers might be risking to save their money in the social schemes due to uncertainties that might arise in the returns from the scheme’s investment. A poorly organized economic system that cannot guarantee safety of the investor’s money, eventually leads to the contributors lose confidence in it, thus retarding the amount of saving in the long-term (Leavitt, 1983). The political environment in the system also counts in determining the overall contributions within a specified time period. The taxation structure of a nation and the rate of awarding benefits can be altered by the ruling regime in order to strengthen the economy in regard to some economic and political pressures, which may either be internal or external. In this case, to the contributors this amounts to the political risk, which in a way is similar to the market risk when the effects are taken in to consideration. This can raise concerns in the workers’ willingness to contribute since the risk of getting returns is high, and only a daring contributor will be willing to risk his/her contribution (Wise, 1987). On the issue of demographic trends in the labor market, examining closely the behavior of aged workers affects greatly the retirement policy adopted in an economy. Retirement results to productive people in the employment scene be forgone, an option many firms are not willing to take since human resources is scarce. Hence some firms choose to retain their workers past a certain age set for retirement. Other firms have a policy of maintaining a copy of the knowledge accumulated by the senior managers about to retire through electronic means. This information will assist the firm in future activities like mentoring new employees and reducing the wage bill by automating some tasks. Some people become displaced by the policies adopted in face of economic hardships (Aicken, 1996). Taking in to account the preferences of different people in different age brackets, particularly the young and old, the products brought in the market should be framed in such a manner as to suit the elderly as well as the youth. Taking the interests of the old, many prefer business people at different levels should adopt ways which fit exactly in to the requirements of this group, example advising a group of sixty five year people cannot be effective as required if carried out by a fresh marketing graduate. The mode of passing the message about a certain product should be wisely chosen to fit this target group, so as to retain them and their demands in the market place (Brown, 2010). Dynamics in the customer expectations dictates that continuous innovation process be in place to avoid the risk of losing customers, who are fashion-sensitive and maintain a keen eye in the market trends. A dilemma will emerge as the older customers, who prefer the current status of the production may be locked out. To curb any complains pertaining satisfaction of different customers in different age brackets. A keen acumen should be kept on the requirements of different customers and satisfying them effectively (Brown, 2010). Conclusions A organized, effective and coordinated regulatory authority should be put in place to ensure that all what has been invested by the social security systems is in safe place for workers after retirement. This calls for a vigilant political system and sound economic policies which are inclusive, catering the needs of every person in any age bracket. A strong investing culture should be advocated for by the regulatory authorities to ensure that the state of people retiring is not pathetic. References Clark L. Burkhauser R.V. (2004). The economics of an aging society, Australia: Greenwood publishing. Schulz J. (2001). The Economics of Aging 7th Ed, Washington: Greenwood publishing. Schulz J. (2006). Aging Nation, New York: Greenwood publishing Group. Schulz J. (1997). Providing adequate retirement income, Chicago: Green Wood publishing. Leavitt, T. & Schulz J.H. (1983). Pension integration, Australia: Blackwell publishing. Wise, A. & Shoven J. (1987). Issues in pension economics, Chicago: University of Chicago press. Brown, K. &Mc Gill D. (2010). Business economics 9th Ed. Oxford: Oxford printing press. Aicken, W. (1996), Pension funding and valuation, 2nd Ed. New York: ACTEX publications. Curtis V. & Alveris A. (2010), Business and Economics, New York: John Wiley and sons. Shoven, J. &Brown K.N., (2010). Concepts of aging economics, New York: John Wiley and Sons. Read More