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

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.