Silver Dividend

Longevity infrastructure that keeps older people employed for longer can have cascading benefits in an economy - silver multiplier shows raising retirement age boosts GDP, health, social inclusion.

As countries age and people work for longer, their presence and engagement are felt across economy. For governments, this could be another source of growth. For this, ageing societies will have to be rebuilt around elderly. This would require significant investments in physical infrastructure and human capital. Done well, that investment will raise output and hold down healthcare costs at same time. We call this silver multiplier - investments whose returns cascade across economy and are captured in many places at once.

Longevity investment currently focuses on biology rather than infrastructure. Investors are piling funding in drug discovery, cellular reprogramming and rejuvenation and even pet longevity. These, while useful, fail to factor in other determinants of living longer.

Ageing societies can put pressure on all components of economic growth because of increased state spending, healthcare costs, loss of human capital and expertise and possible decline in productivity. However, keeping workers engaged for longer, by providing enabling infrastructure to allow them to thrive in society, can have positive impact.

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Silver multiplier - The silver multiplier follows logic similar to Keynesian multiplier, which posits that an initial investment in economy, say, through government spending, can stimulate prolonged growth, resulting in cycle of increased income and consumption. In case of silver multiplier, people should be enabled to work longer by raising age of retirement and investing in urban infrastructure that allows elderly to commute with ease.

Research shows that in US, retirement of a healthy American costs roughly $200,000 in annual GDP. Fiscal benefits are quite significant since an estimated $25,600 is also needed to finance retirement-related transfers for each retiree. Keeping older people engaged can generate immense public health benefits. The WHO Commission on Social Connection, 2025, found that loneliness was linked to 871,000 deaths annually and heightened risk of stroke, heart disease, diabetes and cognitive decline. Social connections, its report said, resulted in improved health and reduced risk of early deaths. Cost of social isolation is high: 2017 study found that in US, Medicare spent on average $1,608 more a year for each older person with limited social connections, its report said, resulted in improved health and reduced risk of early deaths.

Older people working for longer does not necessarily crowd out younger workers. Those aged 55-64 are largest set of entrepreneurs and are likely to have social and financial capital to set up new businesses and, in turn, grow economy and still remain engaged. This is why silver infrastructure attests almost no cost.

People should be enabled to work longer by raising age of retirement and investing in urban infrastructure that allows elderly to commute with ease - Neeraj Sagar & Vibhav Mariwala.

State must play proactive role in shaping future of ageing societies. Rebuild societies - Silver multiplier has had impact, on smaller scale, in countries such as Japan and Finland. Finland had national programme on ageing workers, which ran from 1998 to 2002. This resulted in employment rate of older age groups being higher in Finland than EU average. Approximately 300,000 new jobs created in Finland between 1998 and 2001, with nearly three-fourths of these jobs benefiting those over age of 55. Meanwhile, Japanese town of Kamikatsu has lowest per capita elderly medical costs in Tokushima prefecture, despite having highest rate of ageing - and that is because of a new business that employs locals as farmers. The village has only 1,415 residents and is unlikely to shape macroeconomic outlook for country, however, it provides micro perspective on what states could do to unlock silver multiplier. Silver infrastructure attestsalmost no cost. Capital now, because their returns are scattered across economy and no single balance sheet records them. That is why state must anchor investments in longevity infrastructure. One important measure is classification. In some countries, fiscal rules treat capital spending as investment to be protected and current spending as cost. Spending that keeps older people engaged, from mid-career reskilling to flexible work programmes and accessible transport, is an investment, rather than current spending alone.

Silver Dividend

Cult Current Desk

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