Mismanagement of societal aging is an important threat to health care, social security, and the economy of many nations. A System Dynamics simulation model related to societal aging in the Netherlands and its implications for the Dutch welfare system is used here to generate exploratory scenarios and to test policy robustness across many scenarios. Key concerns derived from this research are (i) the existence of plausible scenarios with severe labor scarcity, especially in health care, (ii) unsustainable evolutions of health care costs, and (iii) insufficient labor productivity, especially in health care. The authors' analysis shows that labor productivity may be cause of, and cure for, many of undesirable evolutions. The authors conclude that there is a need for: (i) sufficient increases in labor productivity, especially in health care, without pinching the necessary workers in care, and (ii) sufficiently raising the retirement age as well as raising the willingness to work longer and to employ older people. These conclusions are derived from the systematic data analysis documented in the appendix.
Labor productivity slowdown and technical progress in the Netherlands
