A multi-dimensional measure of population ageing accounting for Quantum and Quality in life years: An application of selected countries in Europe and Asia

Abstract Population ageing measured through a fixed old-age threshold like 60+ or 65+ ignores the other important dimensions of ageing. There has been changes among the older persons in multiple dimensions that corresponds to quantity of life years lived as well as the quality of life. The existing multi-dimensional measures also consider the characteristics within a fixed old-age threshold framework which does not account for significant improvements in life expectancy over the years. We propose a new Multidimensional Old Age Threshold (MOAT) measure that accommodates different dimensions of quantity and quality of older persons. We achieve this through a modified framework of the Characteristic Approach. Our measure incorporates a forward-looking approach to measure ageing and specifies an old-age threshold for different countries after accounting for different dimensions of life expectancy, health and human capital. This method is more suitable for comparison across countries with distinct demographic and health achievements. The empirical application of our method using selected countries from Europe and Asia shows that the relative performance of countries differs in terms of MOAT in comparison to estimates based on existing measures, primarily due to the inclusion of the quality dimensions. Countries that have better performance in life expectancy, health and human capital have higher values of MOAT and a lower ‘burden’ of older persons in a cross-country perspective in comparison to the existing measures.