Policy Challenges of Population Aging: The Netherlands

Frans Willekens, Netherlands Interdisciplinary Demographic Institute (NIDI)

The paper presents and discusses the major challenges policy makers in the Netherlands face as a result of an ageing population. The social security challenge depends only indirectly on the proportion over 65, the old-age dependency ratio, or the life expectancy at 65; it depends directly on how people live and organize their lives. I argue that the public debate and the reforms should emphasize and promote life cycle risk management. Modern life cycle risk management is not restricted to payments and benefits (financial capital), but encompasses physical capital (e.g. home equity), business capital, human capital (education and health) and social capital (social support networks). It distinguishes several life contingencies and involves all domains of life. In the paper, the life cycle risk management perspective is operationalized by following two fictitious individuals growing up and growing old in the Dutch welfare state.