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Valuing Productive Non-market Activities of Older Adults in Europe and the US

Author

Listed:
  • David E. Bloom

    (Harvard T.H. Chan School of Public Health)

  • Alex Khoury

    (Harvard T.H. Chan School of Public Health)

  • Eda Algur

    (Harvard T.H. Chan School of Public Health)

  • J. P. Sevilla

    (Harvard T.H. Chan School of Public Health)

Abstract

We measure the economic contribution of older adults (i.e., adults age 60+) in Europe and the US by examining participation in and calculating value generated by market activities and productive non-market activities (PNMA). We find that the estimated value of market and non-market contributions of older adults in the sample countries in Europe and the US sum to the equivalent of 7.3% of gross domestic product, while older adults make up 24% and 21% of the European and US population, respectively. In addition, notable variation exists in the composition of older adults’ economic contributions by age group, national setting, and gender—with a significant proportion of overall value generated from PNMA when monetized in relation to market activities. Regarding retirement policy, we find at the country level that the value generated from increased employment may be offset by the loss of value from decreased PNMA and that the impact of retirement policy on overall productivity depends on the ratio of market to non-market productivity in a country. Finally, we find that severe but common health shocks such as heart attacks, strokes, and the onset of cancer affect both market activities and PNMA appreciably across countries and genders, with an overall greater reduction in market activities by males and in PNMA by females. Taken together, we show that PNMA comprises a substantial share of older adults’ productive contributions and argue that it should be considered in policy discussions regarding retirement age, pension taxes, and healthy aging.

Suggested Citation

  • David E. Bloom & Alex Khoury & Eda Algur & J. P. Sevilla, 2020. "Valuing Productive Non-market Activities of Older Adults in Europe and the US," De Economist, Springer, vol. 168(2), pages 153-181, June.
    • Handle: RePEc:kap:decono:v:168:y:2020:i:2:d:10.1007_s10645-020-09362-1
    DOI: 10.1007/s10645-020-09362-1
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    References listed on IDEAS

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    Cited by:

    1. Wong, John E.L. & Fried, Linda P. & Dzau, Victor J., 2023. "The Global Roadmap for Healthy Longevity: United States of America National Academy of Medicine Consensus Study Report, 2022," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    2. Chen, Simiao & Prettner, Klaus & Kuhn, Michael & Bloom, David E., 2021. "The economic burden of COVID-19 in the United States: Estimates and projections under an infection-based herd immunity approach," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).
    3. Brian Beach & Karen Clay & Martin Saavedra, 2022. "The 1918 Influenza Pandemic and Its Lessons for COVID-19," Journal of Economic Literature, American Economic Association, vol. 60(1), pages 41-84, March.
    4. Ferranna, Maddalena & Sevilla, J.P. & Zucker, Leo & Bloom, David E., 2022. "Patterns of Time Use among Older People," IZA Discussion Papers 15227, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Older adults; Non-market activity; Productivity; Retirement policy; Europe; US;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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