The demographic shift in the European Union is set to take place in 2029. In that year, the population of the Old Continent will begin to decline inexorably. This will be the first time since prehistoric times, excluding epidemics or wars. In a report on this upheaval published on Tuesday 14 July, the European Commission considers it futile to try to reverse the trend but necessary, however, to adapt public policies to the considerable impact that this new reality will have not only on economic growth potential but also on the labour market, healthcare, housing and the public finances of Member States.

Currently standing at 450.6 million – almost 100 million more than in 1960 – the population of the EU-27 is set to reach its all-time high of 453 million in three years’ time. It will then begin a slow decline, falling to 445 million by 2050 and dropping below the 400-million mark by 2100, according to the document entitled ‘The Demographic Transformation of the EU’.

This decline is accompanied by structural changes that are profoundly reshaping Europe. The proportion of people aged 65 and over will more than double: from one in five Europeans today, it will rise to one in three by the end of the century. The median age will rise from 44.9 years in 2025 to 51.5 years in 2100. Life expectancy at birth will increase to over 90 years for women and at least 86 years for men by the end of the century, compared with 84.1 years and 78.9 years respectively today. The number of babies will remain low in the long term, as the fertility rate will stay well below the level required for generational replacement, which is 2.1 children per woman of childbearing age. It currently stands, on average, at 1.34 children per woman in the EU.

Invented by Europeans, the welfare state was designed for a relatively young and steadily growing population. It is based on the transfer of wealth from the working population to pensioners, children and the unemployed. The demographic revolution is already intensifying intergenerational tensions, the report warns: pension systems are under severe strain, demand for care for older people is rising, and housing is becoming less affordable for younger generations. These generations will face unprecedented obstacles to entering the labour market and starting a family. The tax burden will weigh increasingly heavily on the working population, particularly in Member States that prioritise labour taxation.

Encouraging immigration: a false hope

Projections from the European statistical office Eurostat predict that the EU’s working-age population (aged 15 to 64 inclusive) will fall by an average of 1.2 million people each year until 2050. And even this figure takes into account continued immigration. But for the Commission’s experts, having more children or boosting immigration are illusory solutions. “Demographic challenges cannot be addressed by measures relating solely to fertility or migration,” the report states.

Experience shows that government measures designed to encourage childbearing (such as extending parental leave, providing childcare for pre-school-age children, or even offering financial incentives) have only very limited effectiveness. The report cites the example of the countries of Northern Europe which, despite a sophisticated welfare state, pioneering gender equality and strong public support for families, are experiencing a fall in birth rates just like other countries.

Similarly, increasing immigration would not be a panacea, quite apart from the issue of its acceptability to the local population. “Positive net migration can slow the rate at which the population is ageing but cannot alter its trajectory,” the document states. For although the migrant population may be relatively young and fertile, within one or two generations its reproductive behaviour aligns with that of the host population. On the other hand, the report suggests changing the structure of migration flows, as highly skilled migrants account for only around 20 per cent of new arrivals in the European Union, compared with 56 per cent in Canada, 41 per cent in Australia and 39 per cent in the United Kingdom. This situation is exacerbated by the fact that 40 per cent of non-EU nationals working in the EU are in jobs below their qualifications.

As a result of the above, economic growth will need to be underpinned by an increase in the productivity of the workforce, the Commission emphasises. This requires increased investment in lifelong education and vocational training, but also measures to encourage people who are not in employment (around 20 per cent of the population aged 15 to 64) to enter the labour market. This mainly concerns women (whose average employment rate is 10 percentage points lower than that of men), people with few qualifications, migrants, the long-term unemployed, as well as the youngest and oldest members of this age group.

A study by Commission experts thus shows that if Sweden’s employment rate – the highest among Member States – were applied across the whole of the EU, the negative effects of an ageing population could be almost entirely offset. In this optimistic scenario, the European workforce would lose only 5.9 million people by 2070, whereas without change, the figure would be five times higher.

In any case, the demographic revolution “is not a temporary disruption, but a permanent transformation of the conditions under which European societies evolve”, warns the Commission. “This reality means that policies must adapt to these fundamental changes rather than seeking to reverse them”.