SD Example 2

Aging Population & Healthcare Demand

Population flows through age cohorts (young → working → elderly). Frailty onset increases healthcare costs nonlinearly.

STOCK-FLOW WITH COHORT TRANSITIONS Young 3M persons Working 5M persons Elderly Ind. 1.2M persons Elderly Frail 300K persons ∼ maturation retirement frailty death_Y death_W death_EI death_EF DR dependency ratio HD healthcare demand $3K/yr $20K/yr R1 Feedback Loop R1 (Reinforcing): Healthcare demand ↑ → spending ↑ → tax burden ↑ → reduce fertility ↓ → fewer working-age → dependency_ratio ↑ → demand ↑ [closes loop] B1 Feedback Loop B1 (Balancing): Larger elderly population → more deaths → limits elderly stock growth Time constant: life expectancy ~80 years. Slow feedback (decades).

STOCKS

Age Cohorts

  • Young — aged 0–20
  • Working — aged 20–65
  • Elderly_Ind — aged 65–80, independent
  • Elderly_Frail — aged 80+, need care

FLOWS

Cohort Transitions

  • births = Working × fertility_rate
  • maturation = Young / 20 years
  • retirement = Working / 45 years
  • frailty_onset = Elderly_Ind × 6% (focal cost driver)

AUXILIARIES

Key Converters

dependency_ratio = (Young + Elderly_Ind + Elderly_Frail) / Working

healthcare_demand = Elderly_Ind×$3k + Elderly_Frail×$20k

PATTERN

Structural Deficit

When dependency_ratio > 0.7, healthcare demand exceeds tax-funded capacity. Japan: 0.69 (2020), structural deficit emerging.