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Population change will have an uneven impact in Europe

Thursday, January 20, 2022

Ageing population dynamics will pose different social, economic and political challenges for European governments

Infographic exploring the demographics of selected countries in Europe. As populations age, the share of working population decreases, and countries will see a rise in the old age dependency ratio

Source: UN World Population Prospects

Outlook

Today roughly 20% of the European population is aged over 65; that is projected to rise to 30% by 2070. The share of people over 80 is expected to double from around 6% to 13%. The shift towards an ageing population will pose significant challenges for labour market performance, healthcare capacity, public spending, immigration policy and political stability.

Many countries will increase the retirement age and pursue policies that encourage more legal migration as a policy response to population changes and labour shortages. The demographic crisis will be most acute in the south and east of Europe, where higher rates of emigration and/or lower rates of immigration will weaken productivity and economic growth.

Impacts

  • Ageing populations, in addition to the green and digital transitions, will widen inequality gaps between Eastern and Western Europe.
  • Proposals to increase immigration as a solution to labour shortages will be resisted by populist parties.
  • More countries may begin to incentivise ‘native’ families to have more children in order to slow down population decline.
  • Anti-emigration politics and policies will become a new phenomenon, especially in southern European countries.

See also