Back to cover

World Bank Support to Aging Countries

Chapter 4 | Addressing Population Aging


Focusing on preparedness and thinking cross-sectorally are necessary to help countries plan for population aging.

The World Bank has not been systematic and deliberate in helping countries prepare for population aging. Except for its work on reducing tobacco consumption, the World Bank has not invested extensively in programs to incentivize healthy behaviors. The World Bank is preparing a lifelong learning framework, but it has not integrated it into aging work. There is no activity on financial awareness, access to financial products, or migration. The age-friendly environment is considered a potential area of interest, but it has not generated any activity. The World Bank has not done any work on how to address social norms in relation to aging.

The most innovative work the World Bank has done over the past 10 years is supporting countries to pilot new approaches to long-term care. This work has been prompted by client requests and has provided an opportunity for the World Bank to build internal capacity and visibility.

The World Bank is experiencing challenges in thinking cross-sectorally, as is required by a complex and cross-sectoral issue like population aging. This inability increases the risk that sectoral work is not responsive to issues that pertain to other sectors, thus potentially undermining them or not helping them.

Addressing internal constraints by improving coordination across Global Practices, strengthening resources and expertise available to work on population aging, and improving access to and use of knowledge—especially the knowledge generated through reimbursable advisory services—can help the institution increase cross-fertilization, coherence, and innovation.

This chapter discusses how the World Bank assists its clients in addressing and anticipating the consequences of population aging. It analyzes the type and characteristics of the activities in which the World Bank engages clients, the areas where the World Bank has made inroads over the past few years, and areas where progress has been slow. The chapter also reviews the explanations of what may have kept the institution from making headway toward advancing its work on aging. This chapter addresses evaluation question 2, on the comprehensiveness, timeliness, and coherence of World Bank support to countries.

The World Bank has a strong tradition of supporting countries to strengthen and reform their pension and health systems. The bulk of the operational work on aging is in the areas of health, pensions, and social protection more generally (see appendix F for a description of the distribution of the World Bank portfolio in aging countries). Most of these activities happen across countries, irrespective of their aging status. The evaluation goal was not to assess this work but rather to focus on the approaches that can help countries to plan for population aging and create opportunities to ensure the health and well-being of an aging population.1

Focusing on preparedness and thinking cross-sectorally is what characterizes a systemic response to population aging. The two aspects are intertwined. Timely policy solutions, those that are adopted when population aging is not yet very advanced, provide more options to countries to set up and reform their systems rather than being forced to make painful adjustments at the margin—and these are typically multisector solutions.

The evaluation found that the World Bank has not been systematic and deliberate in helping countries prepare for population aging, that is, creating the conditions for a healthier and more productive society. The World Bank has successfully worked with countries to pilot new approaches to long-term care, the area where the World Bank has shown most innovation over the past 10 years. On other fronts, the World Bank record is mixed or absent.

The World Bank’s approach to finding solutions in response to population aging is not sufficiently comprehensive and informed by cross-sectoral thinking. To address a systemic issue like population aging, sectoral solutions need to consider the complex relationships that exist across sectors to avoid undermining efforts and to maximize complementarities. This is even more relevant in the case of early interventions, when the longer horizon allows for planning at the system level.

The two aspects—preparedness and cross-sectoral thinking—are discussed in the following sections, providing examples of where the World Bank has been innovative and where instead there has been little focus.

Focusing on Better Preparedness

Attention to Health Promotion

Investing in better health and disease prevention to extend the number of years people live free of illness and disability is the best approach to promoting healthier and more productive lives, as noted in the reviewed World Bank aging reports. The increasing prevalence of NCDs in aging populations has had adverse implications for overall productivity. The economic costs of NCDs are well-documented. Bloom et al. (2014) projected that cardiovascular disease, cancer, chronic respiratory disease, diabetes, and mental health disorders would cost $27.6 trillion in China and India over 2012–30—a cost that can be avoided through prevention.2 For example, Heijdra and Reijnders (2012) show that when boosts to longevity take place in a context of increased “economic longevity” (that is, longevity that allows individuals to stay longer in the labor market) the resulting increases in human and physical capital are enough to totally counteract the negative effects of aging on economic output. Reducing exposure to NCD-related risk factors through stronger health promotion and public health interventions is therefore key in aging countries to prevent an otherwise inevitable shrinking of their workforce.

The World Bank’s analytical work has been influential in informing policies to reduce tobacco consumption in many countries. The World Bank contributed to building the evidence base needed to demonstrate that tobacco taxation reduces tobacco consumption, which in turn has other potential benefits, including greater labor productivity and increased life expectancy. The World Bank provided critical evidence in the form of technical assistance for tax policy assessments, including modeling work to estimate the impact of tobacco tax reforms on prices, consumption, and domestic revenue mobilization under different policy scenarios; it also provided capacity building and facilitated learning across countries. The World Bank’s work informed policy discussions in aging countries (Azerbaijan, Belarus, Bosnia and Herzegovina, Kazakhstan, Moldova, North Macedonia, Russia, Trinidad and Tobago, Ukraine, Uzbekistan, Vietnam, and the members of the Organisation of Eastern Caribbean States). It was also influential in younger countries with high levels of tobacco consumption, such as Indonesia.

The World Bank also supported tobacco taxation policy reforms through prior actions for fiscal development policy loans in several aging countries between 2015 and 2019. Examples come from Armenia, Colombia, Moldova, Mongolia, and Montenegro. In Colombia, for instance, these prior actions contributed to increased revenues from tobacco taxes through specific excises. Revenues were earmarked mostly for health expenditures, thus increasing the available resources for the government’s health spending.

The World Bank has recently launched a global study on obesity prevention and control and increasingly receives requests from countries for support on implementing sugar-sweetened beverage taxes. The global study lays out the rationale to address overweight and obesity, pointing to its negative economic and health impacts, especially for poor people and people who live in low- or middle-income countries. It also presents evidence-based opportunities for fiscal and regulatory policy reforms and investments across several sectors that could prevent overweight and obesity. One such policy is the introduction of sugar-sweetened beverage taxes, for which several countries have recently requested World Bank assistance (Colombia, Kazakhstan, Kerala state in India, the Philippines, and Saudi Arabia; the last three countries are not yet in a full-blown aging stage). Support has been provided by outsourcing to consultants so far. The World Bank has only recently focused on creating internal capacity to support the design and implementation of such taxes, relying on the expertise created through tobacco taxation. However, the World Bank was not a pioneer in this field, as these taxes have been introduced in at least 45 countries worldwide since early 2000. This isolated effort contrasts with the long-standing commitment of the World Bank to support client countries in designing and implementing policies and programs to reduce child malnutrition. Similarly, little (or nothing) has been done to promote the reduction of alcohol consumption, another important risk factor for NCDs.

Large-scale, communitywide interventions to promote healthy behavior are not usually included in World Bank support to countries. IEG found two cases in the review of the portfolio for this evaluation. The World Bank helped the Ministry of Health in Turkey implement its strategic plan for 2010–14, which included goals for NCD control. World Bank–supported activities included a surveillance study on childhood obesity, the development of national guidelines on physical activity, and the regulation of school cafeterias to promote healthy food consumption in primary and secondary schools. In Uruguay, the Noncommunicable Diseases Prevention and Promotion Project proposed a multidimensional approach to prevent NCDs, extending beyond the role of ministries of health and health services to the community level, including schools. The approach was not articulated in the project development objective or the design and focused mostly on secondary prevention under the control of the Ministry of Health, with limited attention on the social determinants of health and behavior change activities. Although strategies to influence the behavior of the population with respect to NCD risk factors were implemented in schools and at the community level, their emphasis and scale were limited, and their continuity and sustainability relied mostly on the interest of individuals and municipalities (World Bank 2019f).

Planning for Increasing Care Needs

Aging countries will need to invest in provision of long-term care, given the higher prevalence of functional dependency at old ages. Low- and middle-income countries show higher rates of functional dependency at old ages than high-income countries (WHO 2015). According to WHO estimates, in China 35 percent of people ages 75 or older need some type of assistance for at least one basic activity of daily living; this figure reaches 45 percent in South Africa, more than 60 percent in Mexico, and about 80 percent in India and Russia. Yet less than 20 percent of people ages 75 or older have difficulties with basic activities in Denmark, the Netherlands, and Switzerland. IADB estimates that in the Latin America and the Caribbean Region the number of people with difficulties performing activities of daily living could triple by 2050 (Aranco et al. 2018). Similarly, in Thailand the proportion of older people with difficulties performing these activities could more than double by 2050 (Loichinger and Pothisiri 2018).

Long-term care is a new line of work in which the World Bank has been increasing its engagement with countries and building expertise and reputation. Over the past 10 years, the World Bank has supported countries in assessing their future long-term care needs and offered policy recommendations to address these. Most of this support involved reviewing existing long-term care systems in high-income countries in terms of coverage, benefits, funding, and quality. It also included analysis of the demand and supply of long-term care services, financing, and institutional arrangements (detailed reports are available for Chile, China, Estonia, Poland, and—more recently—Saudi Arabia). In China, the study recommended a balanced mix of services across home, community, and institutional settings, and expanding home and community care. It also recommended policy and institutional reforms to build the stewardship role of the state in long-term care. The report found that, although continued government support is needed for vulnerable older adults, the most effective and sustainable approach to developing the sector would be to leverage resources and complementary capacities in the private sector (Glinskaya and Feng 2018).

The World Bank has used a variety of instruments to develop its work on long-term care. In addition to analytical work, the World Bank has approved two projects in China,3 and it used reimbursable technical assistance in the Europe and Central Asia Region (Estonia, Latvia, and Romania) and in Chile and the Seychelles.4 In Chile, three subsequent RAS helped the government design, implement, and evaluate the Chile Cuida pilot phase, to establish a national system of long-term care. One of the most praised aspects of the design supported by the World Bank, as evidenced in IEG field interviews, was the decentralized, bottom-up approach. This consisted of identifying, expanding, and adapting the services and programs already present in each community. The approach focused on improving the coordination across municipalities and institutionalizing initiatives that were already happening at the municipal level in an uncoordinated and fragmented fashion. Although not fully successful in achieving strong coordination between municipalities and central governments, leveraging the existing local initiatives (some of which were quite creative) was a very innovative approach.

Provision of long-term care, however, is a complex undertaking that requires strategic planning and a cultural change; it will likely challenge the World Bank to test alternative approaches. Because publicly funded provision of care for older people is extremely expensive, governments normally consider long-term care needs as a private issue to be addressed by the families in kind or through personal insurance. At the same time, direct and opportunity costs of long-term care are very high for families too, so private care is accessible only to the better-off. Part of the difficulty in finding a public solution to this issue is that long-term care is analyzed from a short-term perspective that neglects the many contributions that older people often provide, for example informal childcare, which allows many parents to work. These private and public benefits are not accounted for in the market, even if governments save on childcare and benefit from increased participation in employment (and higher tax revenues). Working with governments to mobilize private sector involvement with a strong government regulation (as in China), to support greater use of community-based solutions (as in Chile), or to promote other subsidized solutions could be the next challenge for the World Bank.

Supporting Productive Aging

The work on lifelong learning is still at the incipient stage and only partially integrated into the aging work. Several World Bank reports recognize that lifelong learning is critical to increasing labor productivity and improving the employability of older workers (Dávalos et al. 2017 for Moldova; World Bank 2008 for Sri Lanka; World Bank 2011a for Georgia; World Bank 2015m for Central Europe and the Baltics; World Bank 2016d for Vietnam), but these do not go beyond a simple acknowledgment of the issue. One report for Latvia presents a deeper discussion, corroborated by original analysis of two Eurostat surveys, the Adult Education Survey and the Continuing Vocational Training Survey (World Bank 2015a). This report analyzes the extent of adult education and training of older workers; the barriers to access; the policy options, such as improving information flows and coordination among the various actors (firms, industry associations, trade unions, training providers, and government at different levels); facilitating financing; and setting regulation. It also discusses several trade-offs that the policy maker needs to reconcile (for example, whether to focus on current or future older workers, on those currently employed or out of work, and so on). Not surprisingly, the World Bank’s limited work in this area has happened in Eastern European countries, as the EU has been pushing countries to adopt policies to address the educational challenges of an aging population through directives and funding (such as the Grundtvig program and Erasmus+; Council of the European Union 2011, 2018). At the same time, the Education Global Practice in the World Bank has been developing a lifelong learning framework to help countries create platforms for accessing training when and where it is needed and in the form and intensity required (World Bank 2019c). So far, this framework—which has been fine-tuned based on qualitative analysis of workplace training conducted in Romania and Serbia—has not been integrated into aging. This nascent framework could be linked more explicitly to the aging agenda.

Migration to aging countries may be a solution to a shrinking labor force but a politically and socially difficult one. The GMR and various knowledge products acknowledge that migration can help increase labor force participation rates in aging countries but also recognize the challenges. Immigration from younger to older countries helps, but it can generate social problems (see Flochel et al. 2014). However, in some Regions that are uniformly aging, such as Europe and Central Asia, several countries experience outmigration, which makes the situation worse. For example, in Moldova, the inflow of remittances does not compensate for the negative impact of working-age adults leaving the country. Remittances can discourage the older adults left behind from taking up jobs, a disincentive compounded by the fact that older people may be left with extra care responsibilities (Dávalos et al. 2017). Apart from diagnostic work and some CPFs (for example, in Romania) touching on the issue, the World Bank does not have insights on how to manage migration to support the labor force of aging countries or to avoid aging countries losing valuable prime-age workers. A recent briefing to the Board of Executive Directors does not provide clarity on this point (World Bank 2019d). It is therefore not surprising that there are only a few projects supporting migration aimed at (i) integrating immigrants into the local economy and social services (Colombia); and (ii) promoting outmigration from countries with excess idle labor force to countries where demographic changes have shrunk the labor force (Morocco and Tunisia).

Higher female labor force participation is highlighted as a solution for the dwindling labor force of aging countries in almost every report reviewed, but there are very few examples of actual policy advice to support countries achieving this goal. Provision of childcare is the main policy measure proposed in World Bank projects in aging countries. The evaluation identified just seven projects supporting childcare services in late- and postdividend countries aimed at improving labor market or economic outcomes for women (during fiscal years 2005–19). Just two projects (both in China) aimed to support the provision of long-term care. The evaluation did not find support for policies such as establishing equal pay or pay transparency legislation, or tax policies to incentivize female employment.

Increasing Financial Awareness and Access to Financial Products

As pension systems have become progressively less generous, the importance of individual pension awareness and financial education has increased. The World Bank has limited experience in this area. Pension awareness is needed to align the workers’ future pension entitlements with their needs and preferences. Financial education and information on pension entitlements are essential to determining whether a pension level is adequate for the desired standard of living (Debets et al. 2018). IEG found only nine projects in the portfolio aimed at increasing access to and usage of a range of appropriate and affordable financial services, including savings, insurance, payments, and credit. Activities also included consumer protection and financial capability (or literacy).

Limited work has been done in terms of promoting or developing financial products to increase or integrate retirement savings. The NTA model stresses the importance of accumulation and decumulation of individual savings over the life cycle. This assumes the availability of financial products to withdraw housing assets, an important saving vehicle. A recent paper analyzing the potential of reverse mortgages in China shows that the interest among potential buyers in such a product reaches 90 percent if the product is explained clearly (Hanewald et al. 2019). The World Bank has recently produced a paper on this issue, expressing a more skeptical position on reverse mortgages (Knaack, Miller, and Stewart 2020). The 2017 edition of the Good Practices for Financial Consumer Protection added a chapter on private pensions, discussing principles of consumer protection and good practices in this complex field (World Bank 2017b). The evaluation did not find any further work being done at this time.

Ensuring Accessibility

The World Bank is currently exploring the viability of a line of work on “accessibility” and “aging-friendly cities.” In an age-friendly city, policies, services, and structures are designed to support and enable older people to age actively—that is, to live in security, enjoy good health, and continue to participate fully in society (WHO 2007). Supportive and enabling environments include places to rest; access to green spaces; well-designed and safe streets and pavements; and accessible pedestrian crossings, walkways, and cycling paths. The work on friendly cities is still very much at the interlocutory stage, and there are virtually no examples of tangible activities. The viability of this work, led by the Urban, Disaster Risk, Resilience, and Land Global Practice, is still being assessed. IEG identified one example in Colombia of a project aimed at encouraging healthier habits by promoting urban cycling. A background paper commissioned for this evaluation identified several entry points for the World Bank to consider (Orloff and Vergara 2021).

Changing Behaviors and Social Norms

The World Bank’s diagnostic work often recognizes the importance of behavioral responses to counteract the potential negative impacts of population aging, yet behavior changes are hypothesized but not tested. One of the main takeaways of Golden Aging is that changes in behaviors are critical to determining the impacts of population aging on the economy and society (Bussolo, Koettl, and Sinnott 2015). Individuals, for example, may anticipate longer life expectancy and work longer and save more for retirement. Firms may adjust their production processes to an older workforce to minimize loss of productivity or even take advantage of skills that sharpen with age. Live Long and Prosper also stresses the importance of behavioral changes for countries to adapt to population aging and recognizes that these may challenge social norms and citizens’ expectations of each other and the state (World Bank 2016b). There are, for example, very few empirical studies on workers’ retirement patterns and how they depend on individual, household, and social conditions.5 There are no studies on savings behavior, its determinants, and how it responds to social security reforms. Risky behaviors for health, such as smoking and alcohol consumption, are frequently mentioned, but no World Bank report presents an analysis of how individuals respond to circumstances and incentives.6 The few studies that include an analysis of micro data have important limitations, the most obvious being that they are based on cross-sectional and not panel data.

Aggregate data and scenario analysis are usually used to analyze changes in behavior. For example, changes in fertility rates may be analyzed using aggregate data pertaining to a single cohort of women (World Bank 2015m). However, realized fertility, labor force participation, retirement patterns, and so on, are the result of supply- and demand-side constraints; hence, understanding individual behavior is fundamental. Often both analytical reports and operations assume, for example, that a pension reform that increases the retirement age will automatically be complied with, without analyzing which other incentives individuals respond to when they decide to exit the labor market.

Attention to the implications of population aging for the social contract is also, surprisingly, a rare exception. The Uruguay SCD is such an exception, explicitly raising this issue (World Bank 2015l). The SCD reflects on the threats to Uruguay’s progressive social contract arising from two channels. First, it recognizes that pursuing a growth model based on high skills, productivity, and innovation can be at odds with the high value society places on poverty reduction, equity, and decent labor conditions. Second, it recognizes that sustaining a social contract built on a strong social welfare system like the current one can become onerous in the context of population aging, especially as resources will need to be directed to the younger generations to counter the high prevalence of child poverty and the low social mobility due to youth exclusion and poor educational outcomes.

Although World Bank reports do not mention ageism, a few do raise the issue of age discrimination in employment. Some World Bank reports discuss the factors constraining firm-level demand for employing an aging workforce and the elements that may limit the employability of older workers (Flochel et al. 2014 for East Asia and Pacific). Some review the approach to the right not to be discriminated against (Dávalos et al. 2017 for Moldova) or identify potential policies to support the employment of older workers (World Bank 2015a for Latvia). The evaluation was not able to locate any activity (either project or technical advice) supporting governments in addressing age discrimination.

Thinking Cross-Sectorally

The GMR and the aging reports show that population aging has consequences for the whole economy and society, yet the World Bank does not regularly use a cross-sectoral angle to inform its sectoral work and to identify potential weaknesses and unintended impacts. Although the aging reports analyze the implications of population aging using a broad, cross-sectoral framework, sectoral work frequently ignores relevant cross-sectoral relationships, even when a more comprehensive background diagnostic could have identified gaps and potential contradictions or found evidenced synergies with other activities. For example, a rich literature exists on the economic determinants of the retirement decisions of men and women, including public and private pensions, wealth and savings, health and health insurance, and labor demand (for an overview, see Coile 2015). This literature is not only limited to economics, but spans multiple disciplines (for a systematic review, see Scharn et al. 2018). Yet most of the World Bank’s analytical work on pensions has traditionally focused on the type and structure of the pension system and its parameters (such as the contribution rate for the worker or the employer), without contextualizing the analysis and framing its policy recommendations within a more comprehensive diagnostic that includes how the labor market operates and how individual decisions are made.

A fragmented approach that misses critical connections across issues can lead to misguided conclusions and advice. A good example is given by the World Bank’s difficulties in providing viable solutions for long-term care that are compatible with promoting (good-quality) female employment. The long-term care sector is frequently seen by World Bank teams as offering great opportunities for female employment, without regard for the occupational segregation, high level of informality, and low wages typical of that sector—and the risk of reiterating traditional gender roles (OECD 2020; UN Women 2017). Addressing aging challenges, increasing the quantity and quality of jobs for women, and providing care services to facilitate female employment are all gender priorities, which need to be reconciled. The two issues (long-term care provision and support to female employment), however, are often dealt with in isolation, both conceptually and operationally, as World Bank teams working on long-term care do not regularly include gender experts or labor specialists and the Gender Group in the World Bank has not included care (especially long-term care) among its priorities in the implementation of the gender strategy.7

Options for pension reform do not convincingly address the gender pension gap. This gap originates from gender wage gaps in the labor market, the double burden of work for women, women’s longer life expectancy, and their living arrangements. Pension reforms that aim at making the system more financially sustainable—for example, by moving from a pay-as-you-go to a defined contribution system or by strengthening the privately funded voluntary pillar—tend to penalize women, who have more irregular working patterns, earn lower wages, and contribute less to the system (Chłon-Dominczak et al. 2019). Pension reforms typically increase women’s retirement age (aligning it with men’s retirement age), a measure aimed at lengthening the working and contributory lives of women and improving the financial sustainability of the system. However, this measure is generally insufficient to ensure both adequacy of the pension for women and equity. To explore options for reforms that work for women, it is important to understand how the labor market, the provision of care, the specific vulnerabilities of women (including the risk of widowhood, disability, and divorce and its legal consequences) and the pension system combined produce inequalities and potentially poverty in old age. This type of analysis, however, is rarely found as a background to pension reforms. The only example the evaluation was able to locate was a study produced to inform the debate about the Vietnam Labor Code revision of 2009, a study still very much centered on increasing the retirement age of women (World Bank 2009b).

The persistence of informality in a rapidly aging world requires making social protection systems more coherent with the functioning of the labor market. As highlighted by the World Development Report 2019, informality has remained high and stable in most developing countries, which has challenged the traditional pension systems designed for a formal labor force (World Bank 2019h). The World Bank’s most recent Jobs and Social Protection white paper, Protecting All (Packard et al. 2019), proposes a new social contract based on social protection systems that are less dependent on a person’s work situation and blur the distinction between contributory social insurance and noncontributory social assistance. It is too early to observe how this approach will influence World Bank advice to client countries.

World Bank pension work is increasingly called to focus on noncontributory pensions,8 which requires concerted action by labor market, poverty, and social protection teams. A few SCDs, for example, recognize that pension reforms aimed at making the system fiscally sustainable, increasing pension adequacy, and providing incentives to longer working lives should go hand in hand with social assistance reforms to protect those who are not covered by pension insurance because of rapid aging and persistently high incidence of informality (for example, the Mongolia SCD; Vietnam SCD). Similarly, knowledge products such as Schwarz et al. (2014) present a comprehensive discussion on how to introduce noncontributory social pensions and use social assistance to pursue the goal of poverty alleviation in old agestriking a difficult balance among sustainability of the pension system, adequacy of pensions, and incentives to labor market participation.

Most of the World Bank work and advice on ways to increase efficiency in health spending provides another example of the need for cross-sectoral thinking. A common source of inefficiency in aging countries is the use of acute hospital beds in lieu of long-term care, so that much hospital infrastructure is being used to provide inappropriate and expensive care for older patients. As a result, World Bank teams promoted hospital reforms aimed at rationalizing (downsizing) the hospital network to increase the system’s efficiency. But, other than the occasional mention of the intent of “reprofiling” the excess hospital capacity that will be made available, there is no explicit provision or plan to address the long-term needs of older people. IEG observed this disconnect in the review of the operational and diagnostic work and in its fieldwork in Ukraine and, to a lesser extent, Romania. This and the previous examples show that although selectivity is an important criterion for the World Bank’s operational engagement, it can be better informed by comprehensive diagnostic work that explores the relationships—and the potential synergies and trade-offs—among issues with the aim to avoid unintended negative consequences and maximize positive impacts.

There are encouraging examples of a more interconnected approach. The Human Development sector in the Europe and Central Asia Region, for instance, at the request of and with funding from the CMUs, is building a framework that explicitly describes the links among health care, social care, skills, and jobs. The East Asia and Pacific and the South Asia Regions joined efforts to prepare a proposal to develop a diagnostic tool to support World Bank dialogue on long-term care and standardize the diagnostics in this area to help countries prioritize interventions to improve long-term care systems. The proposal also includes the organization of a South-South regional workshop to facilitate the exchange of experiences among client governments. These are encouraging initiatives, but still very much with a Human Development focus. Other institutions are engaging in a similar exercise. IADB, for instance, originally looked at aging as a long-term care issue but later moved to integrate health, labor markets, macro and fiscal policy, pensions, and the “silver” economy (private sector).

The World Bank’s analytical work on aging in Russia is a good example of an approach that is multisectoral and forward looking. The aging framework is not centered on the needs of older people, or on the fiscal burden of pensions, but rather on strengthening the size, health, and skill set of the labor force. The priorities to be addressed are about anticipating future challenges by reducing the NCD burden on the working-age population, providing adult workers with the education and training they need in a changing labor market, promoting better human resource policies to manage age in the workplace, and retaining women and older workers in the labor force.

The COVID-19 pandemic has drawn attention to the specific challenges faced by older people in the face of the pandemic, highlighting in particular the cross-sectoral nature of these challenges. COVID-19 has shown that not only are older people especially at risk of contracting the virus but also the degree and type of vulnerability depends on multiple factors, including gender, health status, and socioeconomic conditions (box 4.1 and appendix G). Understanding how these vulnerabilities interact and differently affect older and younger people is essential to designing appropriate policy responses.

Box 4.1. COVID-19 and the Aging Population

Older people are disproportionately vulnerable to coronavirus (COVID-19). They are most at risk of contracting the COVID-19 and of severe illness and death. Preexisting chronic illnesses common among older adults, especially high blood pressure, obesity, and diabetes, increase COVID-19 risks. The presentation of COVID-19 symptoms may vary by age, with older patients exhibiting a different array of symptoms from the standard fever, dry cough, and shortness of breath. Health systems must adapt and prepare for greater care needs with consideration of their population’s age structure and chronic disease profile.

The distancing and isolation measures imposed in response to the pandemic have unique impacts on older adults. Loneliness and other mental health issues are common among older people and may be exacerbated by confinement, disruption of regular routine, and separation from social support networks. Isolation and fear of infection may also make older people less likely to access medical care for other physical conditions. Food security and access to essential medications are of particular concern. Older people may face challenges obtaining accurate information about ways to protect themselves from COVID-19 and accessing relevant services. Health and social support systems must anticipate these needs and respond.

COVID-19 presents a unique array of challenges to those who provide care for older adults, especially in residential care facilities. Many care homes have become incubators for COVID-19 infection. Their residents may present heightened physical, psychological, and social care needs during the pandemic. Acquiring and maintaining adequate equipment, staffing, and infection control procedures for long-term care facilities is of paramount importance. The World Bank is entering into the long-term care business and must be attentive to issues of service quality, stewardship, elder abuse, and the regulatory role of governments.

Older adults are particularly vulnerable to the economic impacts of the COVID-19 pandemic. Their retirement savings have fewer years to recover from financial shocks than those of younger counterparts. Older workers who lose their jobs may have more difficulty finding alternative employment or accessing emergency financial protection schemes. The pandemic’s unprecedented stress on local and national economies may affect the sustainability of public pension plans. It is important to protect all workers, with explicit attention to the disproportionate vulnerabilities of older people.

The pandemic magnifies existing inequalities related to gender. Older women may be experiencing lower mortality rates directly from COVID-19, but they are more exposed along other dimensions. They are more likely than older men to live alone or in a care home. Caregiving is overwhelmingly done by women—and many caregivers are themselves older people—most often working in low-paid, informal, or nonpaid capacities. The pandemic has disproportionately affected female-dominated service sector industries, producing a gender imbalance in job loss. Overall, COVID-19 may stall or reverse hard-won progress on gender roles. The consequences may reverberate across women’s entire lifetimes, into their older years. It is important for the World Bank’s work to be attentive to the gender dimension of distributional impacts in the context of aging.

There are significant gaps in available data on aging adults’ experiences during the pandemic and the multiple, intersectional impacts of the pandemic on aging populations. The impact of COVID-19 on older people’s physical and psychological health, delivery of geriatric health care and social services, and survivors’ long-term health is far from well understood. The pandemic highlights the importance of data for better preparedness. Data gaps complicate country responses and planning. Data on the pandemic’s social and economic effects and behavioral data on older populations’ compliance and coping with physical distancing requirements should be disaggregated by age so that specific impacts and patterns related to older adults can be discovered and analyzed.

Source: Independent Evaluation Group.

Constraints and Enabling Factors

This section reviews the challenges that the World Bank faces in supporting countries in a more timely, comprehensive, and coherent way. Some issues touched on in chapter 3 (such as client demand and the short-term horizon of governments) are relevant here too. Others reviewed here relate to internal coordination, use of resources, and knowledge management.

Coordination across Global Practices

There is no formal owner of the aging agenda, which results in poor coordination and collaboration across sectors. Population aging is a systemic issue that often requires sectoral but coordinated solutions that pertain to several Global Practices. Currently, the bulk of the work is localized in Human Development, but Equitable Growth, Finance, and Institutions also houses part of it; there is almost no participation by Sustainable Development. In the absence of a formally appointed or recognized leader within the institution, nobody is spearheading the agenda at the corporate level or systematically promoting internal collaboration.

Opportunities for collaboration are recognized as important, but few initiatives exist and often rely on external partnerships. An attempt to create a Community of Practice to increase internal coordination was not successful. Based on IEG’s interviews, several staff in different sectors were interested in participating, but an agreement could not be reached about which group should have led the agenda and whether the focus should have been more macro (Macroeconomics, Trade, and Investment) or micro (Human Development). Limited or no incentives for collaboration and the absence of a recognized champion have so far prevented establishing the Community of Practice or other forms of institutional coordination.9 The tobacco control work discussed earlier in this chapter is an example of good collaboration across Global Practices and Practice Groups. It involved Health, Nutrition, and Population and Equitable Growth, Finance, and Institutions and brought together expertise from public health, macroeconomics, tax policy, tax administration, and trade and competitiveness. In several instances, it also benefited from good collaboration with the IMF. The work was championed and spearheaded by a senior health staff member and was possible thanks to dedicated funding from Bloomberg Philanthropies and the Bill & Melinda Gates Foundation. At the analytical level, global, country, and regional aging reports are the result of team collaboration across Global Practices and in some cases even with external partners (the IMF in the case of the GMR; the Economic Commission for Latin America and the Caribbean in the case of the Chile and Uruguay aging reports). In Belarus, the ongoing ASA on long-term care for older people is led by Health, Nutrition, and Population but integrates inputs from Jobs and Social Protection and from Macroeconomics, Trade, and Investment to produce recommendations that align with the Ministry of Social Welfare’s agenda and Belarus’s public expenditure priorities.

World Bank Resources for Aging Countries

The World Bank has a limited pool of experts working on aging-related issues and in aging countries. Based on interviews and the extensive desk reviews conducted for this evaluation, IEG found that the World Bank has a very limited pool of public health specialists and no gerontological expertise; very few staff have knowledge of long-term care or lifelong learning issues; and, although there is a reliable but small group of pension experts, no hires occurred over the past few years. Over time, the World Bank has lost experienced demographers, who have not been replaced. Although part of the work can be outsourced to consultants with specialized expertise, this solution cannot replace investing in building the core capacity of internal staff. IEG noticed—and interviewees pointed out—that the production of knowledge products is often driven by staffing (having the right person in the right place at the right time) rather than considerations regarding the country aging context, as the review of country reports suggests.

Issues arise from limited internal expertise. Relying on a limited group of internal staff with expertise on aging may be a problem because (i) expectations from the clients are high; (ii) more countries are going to face aging challenges in the future; and (iii) the complexity of the aging agenda requires strong cross-sectoral collaboration and coordination. Clients in aging countries expect the highest quality from World Bank technical assistance (especially when they pay for it at higher rates through RAS) and expect the advice received from World Bank staff to reflect the global reputation of the World Bank in ASA. World Bank staff need therefore to be up to date with the global knowledge on the topic and, at the same time, have in-depth country knowledge to adapt the global knowledge to the specific context.

World Bank resources available to aging countries are not commensurate with the sophisticated requests and needs of this type of client. Almost all aging countries are upper-middle-income countries (and even high-income in some cases) for which (i) the World Bank has much fewer resources to generate global knowledge and deploy innovative solutions than it does for International Development Association countries; and (ii) World Bank financing is less competitive than it used to be, and RAS is expensive. As a result, stakeholders in countries complained that the World Bank is not investing enough in this area and that some of the issues countries are interested in are not innovative enough for the World Bank.10 During field visits, this issue was raised by government officials, stakeholders in academia, and think tanks, who contrasted the current (insufficient, in their view) engagement of the World Bank with the leadership it used to have in pensions.

Knowledge Sharing and Knowledge Management

Identifying and locating knowledge products on aging for this evaluation was extremely challenging. IEG experienced firsthand the poor organization of the internal body of knowledge on aging as it undertook the task of gathering the main reports on this topic (see box 1.2 in chapter 1). There is no repository, tagging, or annotated reference list. An earlier attempt by the World Bank to conduct a stocktaking exercise for the Aging Community of Practice ran into similar difficulties, and an inventory of products was never validated or updated. The population and demographic code is either unreliable or not used.

Transmission of knowledge often happens regarding individual tasks and through informal (personal) channels. Specific tasks, products, and activities may benefit from exchange of information, often prompted by personal connections but not through more systematic and institutionalized channels (such as a Community of Practice or other more structured networks). Exchange of information is frequently confined to the specific Global Practice, and even so it is not guaranteed. There is no Global Solutions Group associated with aging, although some existing ones are relevant for this agenda (for example, Data for Decision Making; Fiscal and Social Policies for Poverty Reduction and Shared Prosperity; Healthy Societies; Jobs, Population and Development; Skills).

Client countries and other external stakeholders are sometimes unaware of the World Bank’s work on aging. IEG interviews with stakeholders in academia, think tanks, and other international organizations and with client counterparts during country visits suggest that, although counterparts appreciate the quality of the World Bank’s analytical work on aging, they are frequently unaware of important work in this area. Experts in this area in other organizations have lamented the absence of regular communication from the World Bank regarding new releases of reports or important initiatives. Some lines of work—especially in consolidated areas such as pensions—are exceptions. PROST, the well-known pension reform simulator first released by the World Bank 20 years ago, is still in high demand and supports partnerships and policy dialogue. Another vehicle for country engagement is the annual Pension Core Course, designed for policy makers, regulators and public pension or social security fund managers globally.

A relevant body of knowledge on aging is generated through RAS but has limited disclosure and dissemination—a further limitation to knowledge sharing. Several examples identified by IEG suggest that knowledge generated through RAS is not shared among or internalized by World Bank staff. The exceptions are cases in which (i) knowledge has been shared through the formal quality review process, when reviewers are staff working on similar topics in other countries or regions (for example, the Guizhou project in China), or (ii) knowledge generated through RAS was integrated into broader analytical work (for example, pensions in Trinidad and Tobago). Frequently, IEG found duplications or important omissions instead of examples of existing knowledge being used to push the analysis further. In some cases, knowledge produced through RAS is confidential, but not always. The lack of any guidance regarding what to do with knowledge generated through RAS means that internal dissemination is up to the individual staff responsible for the RAS.

The misconception that aging is an issue relevant only to high-income countries further limits knowledge exchange. The general feeling is that, as aging countries are middle- to high-income countries, there are fewer institutional incentives to promote knowledge sharing. More and more countries will be facing aging challenges, and South-South and North-South learning will become increasingly important. Investing in building global knowledge (which currently largely comes from more advanced economies); transmitting it to a larger number of client countries; and learning from pilots, experiments, and reforms implemented in client countries will be an increasingly critical task for this agenda. This issue was raised repeatedly during field visits by government officials, stakeholders in academia, and think tanks, who expect a stronger role of the World Bank in knowledge brokering in this area, especially given the quality of its analytical work.

  1. As discussed in the Approach Paper (World Bank 2019g), this evaluation used the country as the unit of analysis. An evaluation of World Bank support to pension reforms for 1984–2005 was completed in 2006 (World Bank 2006).
  2. This figure will likely need to be reassessed in light of the coronavirus ( COVID-19 pandemic).
  3. The Anhui Aged Care System Demonstration Project (P154716, $118 million, approved in fiscal year 2018) supports the developing and managing of a diversified, three-tiered aged-care service delivery system for older people, targeting those with limited functional ability; and a Program-for-Results (P162349, $220 million, approved in fiscal year 2019) for Guizhou province aims to provide equitable access to a basic package of aged-care services and to strengthen the quality and efficiency of the aged-care system.
  4. Operation numbers: Chile (P159331), Estonia (P158968), Latvia (P149711), Romania (P147650), the Seychelles (P157794).
  5. An exception is World Bank (2015l), which presents a microeconometric analysis of individual employment and retirement behavior as a function of receiving a pension eligibility.
  6. The Latvia report presents an interesting microeconometric analysis of the relationship among a number of individual and household variables (including health status, depression, education, citizenship, ethnicity, employment of the partner, household income) and participation in employment after age 50 (World Bank 2015a). A Sri Lanka discussion paper includes a microanalysis of women’s probability of ever giving birth and the socioeconomic and cultural factors influencing fertility (World Bank 2012a).
  7. The recently approved Rapid Social Response proposal for Elder Care and Female Employment in Asia—Addressing Aging Needs from a Gender Perspective (P173533) is emblematic in that it is built on the untested hypothesis that female employment in care occupations is a great opportunity for women.
  8. The Independent Evaluation Group (IEG) Pensions evaluation found that the World Bank did not always prioritize the need to expand safety nets to those outside the formal system nor fully analyze noncontributory options (World Bank 2006).
  9. Some interviewees indicated that a mailing list exists to exchange knowledge and information, but IEG did not find it to be active.
  10. In the words of a government official interviewed for this evaluation, “Isn’t reforming the social protection system innovative enough? Even if this is our main priority now?”