Demographic time-bomb ticking under Europe

2005

Europe faces a demographic time-bomb with plunging birth rates and an ageing population posing a real threat to economic prosperity over the next 20 years.

A European Commission's Green Paper on Demographic Change says that from now until 2030 the EU will lose 20.8 million (6.8 per cent) people of working age.

By 2030, Europe will have 18 million fewer children and young people than today while there will be two people of working age for every one aged over 65.

According to European employment and social affairs commissioner, Vladimir Spidla, the looming crisis raises issues that are much broader than older workers and pension reform.

"This development will affect almost every aspect of our lives, for example the way businesses operate and work is being organised, our urban planning, the design of flats, public transport, voting behaviour and the infrastructure of shopping possibilities in our cities," he said

"All age groups will be affected as people live longer and enjoy better health, the birth rate falls and our workforce shrinks. It is time to act now. This debate on European level is a first step."

By 2030, the report finds, the number of "older workers" (aged 55 to 64) will have risen by 24 million as the baby-boomer generation become senior citizens and the EU will have 34.7 million citizens aged over 80 (compared to 18.8 million today).

Average life expectancy has also risen five years since 1960 for women and nearly four years for men. The number of people aged 80+ will also grow 180 per cent by 2050.

At the same time, the EU's fertility rate fell to 1.48 in 2003, below the level needed to replace the population (2.1 children per woman).

As a result, the EU's population will fall from 469.5 million in 2025 to 468.7 million in 2030, with Britain and France the only two large states that will experience a rise in population over the next half-century.

In contrast, the US population will increase by more than 25 per cent between 2000 and 2025.

Pointing out that modern Europe has never experienced economic growth without rising birth rates, the report suggests that "ever larger migrant flows may be needed to meet the need for labour and safeguard Europe's prosperity" – a direct challenge to the growing tide of immigration restrictions proposed by EU member states.

Meanwhile, the number of people 65+ will rise by 52 per cent (40 million) between 2005 and 2030, while the age group of 15-64 will decrease by almost seven per cent (20,8 million).

As a result, the ratio of dependent young and old people to people of working age will increase from 49 per cent in 2005 to 66 per cent in 2030.

To offset the loss of working-age people, Europe would need an employment rate of over 70 per cent.

But as the report also points out, Europe's low birth rate is largely the result of constraints on families’ choices - late access to employment, job instability, expensive housing and lack of incentives (family benefits, parental leave, child care, equal pay).

Incentives of this kind can have a positive impact on the birth rate and increase employment, especially female employment, as certain countries have shown, it says

But ingrained attitudes are proving hard to change. More than eight out of 10 men surveyed by Eurobarometer in 2004 said that they had not taken parental leave or did not intend to do so, even when informed of their rights, for example.

"Politics alone cannot solve the problem”, said Commissioner Spidla, “they have to go hand in hand with a picture in society that does not stamp women who re-enter the labour market after maternity leave as “bad mothers” and men that take care of children as “softies”.”