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LTCI Watch: Babies

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China, Italy and some other countries have been trying to address fears about the aging of their baby boomers by using tax incentives and other incentives to encourage families to have more babies.

See also: Italians aren’t making babies like they used to

Of course, babies are great. 

Some readers, especially those who are fond of Ayn Rand, might say that a government has no business helping families deal with ordinary living costs, period, and that any effort to do so is likely to backfire, by encouraging malingering, leading families to have children they can’t afford to rear, and reducing the resources employers have to hire and pay workers.

Others might say that the government should certainly help struggling families pay to care for their children, in part because, whatever ability the parents or other players in the economy have to make economic decisions, the children themselves have little or no ability to earn income or make purchasing decisions for themselves.

I think those arguments are related to but separate from the arguments about whether governments should encourage citizens to have more babies to help them deal with the effects of the aging of their baby boomers on the national labor supply, tax revenue, and the supply of long-term care (LTC) workers.

There’s a big difference between helping children who are already here and giving families artificial incentives to have more.

For now, at least, the world has obvious limits on natural resources. Any readers of this article who are sitting in California are lucky to be able to get a glass of drinking water out of the tap. If you’re in Colorado, you’re lucky if you can take a deep breath without inhaling forest fire soot. 

Japan, one country with a shrinking population, has to bring nuclear power plants damaged by the 2011 Fukushima earthquake back online because it has no other practical way for its population to have access to a developed-world level of electricity.

The economics of dealing with an aging population might be tricky, but they’re a lot simpler than dealing with a lack of drinkable water.

If a country with a rapidly dwindling population sees that government programs or taxes are keeping families from having children, of course, that country ought to consider changing those policies.

The countries that simply see people over age 65 making up a bigger share of a gradually shrinking population ought to start with other strategies.

1. They should eliminate government-created barriers, psychological barriers and education-access obstacles that keep older people from working.

The main reason that the “Silver Tsunami” looks so frightening today is that public policymakers and private retirement plan designers came up with the rules and customs that shape the labor market today at a time when the average lifespan was much shorter, and when the length of time that older people spent facing severe disabilities was, apparently, somewhat longer.

See also: OECD: Retirement Age Must Be Raised Worldwide

In the United States, the government itself has hurt older workers’ ability to keep their jobs by setting benefits program rules that can make paying for health and retirement benefits for older workers more expensive, more complicated, or both more expensive and more complicated.

And the U.S. government, in particular, doesn’t seem to be doing much to promote the idea that hiring and retaining older workers makes sense.

If older workers could even have a realistic expectation of being able to earn 75 percent of their peak annual compensation as long as they want to work, and are able to work, that might eliminate post-retirement income problems and generate extra cash workers could spend on long-term care insurance (LTCI) and invest in LTC-oriented savings products.

If some of the extra older workers work in elder care, or free up younger workers with stronger backs to do so, that could also help ease any LTC labor gaps.

2. They should invest in elder support technology.

In the United States, many older people who have hearing problems lack relatives or others who are even technically proficient enough to install doorbells that flash.

Older people with mobility problems may not even have simple tablet-based systems that can help them turn on their lights and change TV channels.

Instead of giving cash-strapped young families tax credits they can use to have babies that they may not really be able to afford, why not use the money train and pay some of the many workers left marooned by age discrimination to serve as support technology and home modification specialists for frail older people and younger people with disabilities?

See also: Japan rehab facilities add exoskeleton robots

That might ease basic LTC needs gaps a lot more reliably, starting today, than producing babies who might, or might not, earn enough to pay significant taxes into government elder support programs starting in the 2040s.

3. They should invest in aging and dementia-prevention research.

One great way to reduce both the need for LTC services and the effects of aging on older workers’ productivity would be to come up with ways to prevent or cure conditions such as Alzheimer’s disease and Parkinson’s disease.

The introduction of modern genetic sequencing systems seems to be poised to revolutionize how doctors handle those conditions.

Giving research programs in those areas generous support may be much cheaper than broad extra-child tax credit programs and do a lot more to cut elder care spending than birth incentive programs would be to increase government tax revenue in the 2040s or 2050s.

See also: 7 secrets about the science of aging you ought to know


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