Posted Jul 20, 2022, 6:30 AM
The shock of the aging of the population “is not insurmountable” for the French social protection system and will be “probably less violent” than in other European countries, estimates France Strategy in a note to be published this Wednesday.
While Elisabeth Borne reiterated in early July the government’s determination to move forward on an “essential” pension reform, the institution responsible for informing the government’s choices measured the effects of the demographic shock on the entire protection system. social – and not just on pensions.
The autonomous institution claims an “original method”. Rather than carrying out a classic forecasting exercise, France Strategy worked to determine what the balance of the social accounts would have been in 2019 if the French population had been, that year, as old as expected in 2040. expenditure and income by age remain unchanged.
Result: social protection revenue would have shrunk by 20 billion euros and its expenditure would have swelled by 100 billion (compared to some 700 billion in expenditure in 2019). Ultimately, the social accounts deficit would be around 110 billion euros. In other words, the aging of the population “will put massive pressure on the social accounts for the next twenty years”.
glass half full
“The extent of this pressure can be frightening,” recognizes France Strategy. However, the institution placed with the head of government proposes to see the glass half full.
Because this pressure is only “slightly higher” than that known during the last two decades. “The effort that has been made on recipes over the past ten years, it is not sure that we can reproduce it”, recognizes Pierre-Yves Cusset, the author of the study. Similarly, cutting health care spending after the pandemic has exposed the flaws in the system is going to be complicated.
However, so far social protection has adapted against all odds, prefers to retain France Strategy. And to cite, for example, the various reforms of the pension system with later retirements, changes to the method of calculating pensions and a contribution from those over 60 to the financing of social protection via the Contribution Generalized Social Security (CSG).
“Three quarters of the impact”
In addition, “the pressure induced by the aging of the population should be less violent in France than in many of our neighbors”, underlines the note. “It’s a point that surprised quite a bit,” notes Pierre-Yves Cusset.
The explanation is to be found in the weight of working people in the total population. It is relatively high in other countries neighboring France. However, it can count on the arrival of a larger young generation. On the contrary, for neighboring countries which sometimes experience a sharp drop in fertility, “the hardest part is yet to come”.
France Strategy estimates that the reforms decided in the past in terms of pensions “should make it possible to absorb at least three quarters of the expected impact of aging by 2040, subject to a minimum of growth”.
It will still be necessary to fill the remaining financing gap. Even finding ways to better cover certain risks such as dependency. The note from France Strategy does not venture to imagine what would happen to the social accounts in the event of a new pandemic.