EurWORK European Observatory of Working Life

EU population is ageing and more diverse

About

Country: 
EU Level
Author: 
Andrea Broughton
Institution: 
Institute for Employment Studies

A report by the European Commission has confirmed that its population is ageing, with the median age expected to rise from 40.6 years in 2009 to 47.9 years by 2060. The Demography Report 2010, issued in March 2011, shows that the working population is also ageing, with the proportion of older workers increasing. The report, which says this trend can bring many benefits for the individual, also reveals there is an increasingly diverse population, with new migration patterns.

The ageing population

Demographic changes and the ageing population in particular are long-standing concerns of EU policymakers, and many of the main themes are reviewed in a Eurofound survey data report (EU0902019D). The Commission’s new report (1.7Mb PDF) on demography confirms some of these trends and adds some predictions, as well as giving some policy pointers for the EU. It identifies two factors that contribute to an ageing population: low fertility rates and higher life expectancy. It notes that although fertility rates have increased slightly to an average of 1.6 births per woman in the EU27, and could rise to a rate of 1.7, this is still below the replacement ratio of 2.1 (the replacement level is the average number of children per woman required to keep the population size constant in the absence of inward or outward migration). In terms of life expectancy, the median age of the population is expected to rise from 40.6 years in 2009 to 47.9 years by 2060. In particular, the report notes that the working population is also ageing, as the proportion of older workers in employment increases.

The study points out that policies which deal with the issue of an ageing population focus on enabling older workers to remain active and productive for longer. It suggests that this can benefit the individual, with more opportunities for:

  • engaging in various periods of education;
  • making working time more flexible when childbearing and career commitments coincide;
  • allowing career breaks to be taken when it becomes necessary to take care of family members;
  • engaging in civil society and having a productive retirement through, for example, volunteering.

Migration

Migration and the ageing population of the EU are linked, in that the migration of young people to the EU can provide some relief to labour markets that need younger workers. Overall, EU27 Member States are host to some 20 million non-EU nationals. A further 10 million EU nationals are living, as internal EU migrants, in another EU Member State, and about five million non-nationals have acquired EU citizenship since 2001. The majority of migrants tend to be young and have arrived in the EU quite recently. India, the USA, China and Morocco are the source countries for the largest number of migrants to the EU. The trend is generally upwards: by 2060, people of all nationalities with at least one foreign-born parent are expected to account for nearly a third of the EU27 population and an even larger percentage of the workforce is expected to be of foreign descent. The report states:

These trends imply that additional efforts are needed to ensure that immigrants have the opportunity to integrate into their host society and, crucially, to enable them to contribute to the labour market by making full use of their education.

In terms of trends, the report notes new forms of mobility, with people moving abroad for shorter periods, mainly from one Member State to another, to seek work, pursue their education or other life opportunities. These migrants tend to be well-educated young adults, towards the higher end of the occupational scale. The report cites a 2011 Eurobarometer survey (4Mb PDF) that found that managers (21%) and the self-employed (18%) are more likely to have worked in another country than other white-collar workers (11%). Increasingly, this form of mobility is based on personal preferences and life choices, and not only on economic opportunities.

Effects of the crisis and future actions

The recent economic crisis in the EU has had a significant effect on the labour market, particularly for young people and immigrants. There has also been a reduction in migrants, largely due to a decrease in migration of non-EU nationals for employment and family reasons. The EU’s new Europe 2020 strategy aims to address these issues, by promoting growth and employment and ensuring the future sustainability of public finances, thus carrying on the work of the Lisbon strategy (2000–2010). The report identifies three main policy areas for the EU in terms of addressing the crisis and moving the economy forward:

  • the promotion of active ageing, in order to allow older people to carry on contributing on the basis of their skills and experience;
  • the integration of migrants and their descendants, noting that the low employment rate of migrants is both socially and financially unaffordable;
  • the reconciliation of paid work and family commitments. Economic growth is hampered because too many people are not able to exploit their high level of skills and education on the labour market. Women are particularly affected because of persistent, gender-related, employment and pay gaps.

Commentary

This report paints a comprehensive picture of the challenges that the EU is facing in terms of the composition of its population, largely in the form of the ageing population and levels of migration. This naturally also has repercussions for the labour market. While the ageing population places restrictions on the labour market in terms of the number of people in work, it also puts a strain on the EU’s social welfare system, which is largely based on pay-as-you-go systems. Young migrants can help the EU’s labour market, but it is vital that social policy ensures that they are adequately integrated into their host country in order to enable them to contribute fully.

Andrea Broughton, Institute for Employment Studies