Welfare State
The Impending Gloom

By the year 2015, the 'baby boom' generation born at the end of the Second World War will reach the conventional age of retirement. This large generation will then call upon the state to provide the pensions to which it is entitled. It has often been claimed that financing such pensions may imperil funding for other welfare provisions, including medical services. In Discussion Paper No. 82, Research Fellow Jay Winter predicts that demographic developments may indeed present serious obstacles to the provision of state-funded health care in Britain, as well as in other countries where levels of fertility are currently lower than those necessary for population replacement.

Winter suggests two reasons why these difficulties may arise. First, there is the demographic oddity of the large 'baby boom' generation followed by a significantly smaller one, the 'baby bust' generation, born in the years after 1965 when fertility rates began to decline sharply in all Western countries. Unless there is a resurgence of fertility in the next decade, Winter argues, it is possible that there will not be enough workers contributing to pension funds in order to provide the levels of support to which retired people will feel they are entitled. Such a resurgence of fertility is very unlikely, according to Winter. He also notes that the cost of medical care is likely to increase significantly in the future. Such cost increases, together with current demographic and actuArial,Helvetica,Sans-Serif trends, enable us to predict a crisis in welfare policy within several decades. Will it be education, pensions, or health that will be cut? It seems likely, Winter argues, that such difficult choices will be necessary unless current demographic trends are reversed.


Demographic Change and Medical Care
J M Winter

Discussion Paper No. 82, October 1985 (HR)