Written by David Eatock,
Demography matters. The economy, labour market, healthcare, pensions, the environment, intergenerational fairness and election results – they are all driven by demography. The European Union (EU) has seen its population grow substantially – by around a quarter since 1960 – and it currently stands at over 500 million people. However, the world population has grown faster, more than doubling over the same timeframe and reaching nearly 7.4 billion today. And whilst the EU population is now growing only slowly and is even expected to decline in the longer term, the world population continues to grow strongly. Indeed, it is projected to pass 10 billion in 2055. And despite its growth being expected to slow, the world population is nonetheless forecast to be over 11 billion people in 2100. So, the EU represents an ever-shrinking proportion of the world population, at just 6.9 % today (down from 13.5 % in 1960), and is projected to fall further to just 4.1 % by the end of this century.
In common with many other developed (and developing) parts of the world, the EU population is also ageing, as life expectancy increases and fertility rates drop compared to the past. At the EU level, both men and women have seen their average life expectancy increase by over 10 years between the early 1960s and today, although women continue to live longer than men on average. Meanwhile, the numbers of children being born has fallen from an EU‑28 average of around 2.5 children per woman in 1960, to a little under 1.6 today. This is far below the 2.1 births per woman considered necessary in developed countries to maintain the population in the long term, in the absence of migration. Indeed, migration has become increasingly important for expanding or maintaining the EU population. In both 2015 and 2017, the natural population change (live births minus deaths) was slightly negative, and net inward migration was therefore key to the population growth seen in those years.
Combined, these trends result in a dramatically ageing EU-28, whose working population (aged 15 to 64) shrank for the first time in 2010 and is expected to decline every year to 2060. In contrast, the proportion of people aged 80 or over in the EU-28 population is expected to more than double by 2050, reaching 11.4 %. In 2006, there were four people of working age (15-64) for each person aged 65 or over; by 2050, this ratio is projected to be just two people. This outlook is essentially set in the shorter term, at least, meaning the focus is on smoothing the transition to an older population and adapting to its needs.
Whilst the starting point, speed and scale of ageing varies between the Member States depending on their different fertility rates, life expectancy and migration levels, all will see further ageing in the coming years. Free movement, as well as external migration, will also play a role, in both the population size and age profile of countries, and regions within them. The ‘in-focus’ section of this edition looks at pension systems and how they are being impacted by demographic change. It highlights that national reforms have largely successfully addressed issues around the sustainability of pension systems in the face of ageing populations. However, concerns remain about the adequacy of pensions for certain groups, including some women and older pensioners, and in particular the situation of future pensioners. For the latter, much will depend on the success of efforts to encourage and enable longer working lives, balancing longer life expectancy.
Read the complete ‘In-depth Analysis’ on ‘Demographic outlook for the European Union 2019‘ in the Think Tank pages of the European Parliament.