Europe’s population is getting older and its set to shrink in many countries. One of the keys to sustaining societies and economies will be the integration of immigrants into the workforce, the author of a new study tells Claudia Delpero.
Europe’s population is changing
The European Union’s population is expected to steadily decline from 2026 due to fewer births and immigration no longer compensating for the fall in the birth rate.
However there will be major differences across the different parts of Europe, according to a paper published by Bruegel, an economic policy think tank in Brussels.
Another key trend in Europe’s changing population is that there will be a higher proportion of elderly people in the years to come.
“By 2050, 35 per cent of the EU population is projected to be over 65. This compares to only 21 per cent in 2022, so there is really substantial change coming,” says David Pinkus, Bruegel affiliate fellow and co-author of the research.
“The fastest growing part of the population are those over 85, which brings specific challenges for social policies such as long-term care,” he adds.
Four groups of countries
In their paper, David Pinkus and Nina Ruer analysed the two main factors of population change in Europe, the difference between the number of births and deaths (natural change) and the difference between the number of people moving to European countries and those leaving (immigration and emigration).
They classified EU countries into four groups based on their immigration history. Both Western Europe (including Austria, Germany, France, Belgium, the Netherlands, Luxembourg and Ireland) and Northern Europe (Denmark, Sweden and Finland) switched from emigration to immigration regions in the 1950s.
Southern Europe (Italy, Spain, Portugal, Greece, Cyprus and Malta), historically an emigration region, started to experience significant immigration in the 1990s, but faced a new wave of departures around the 2008 financial crisis.
Eastern Europe (Poland, Czechia, Slovakia, Hungary, Estonia, Latvia, Lithuania, Croatia, Slovenia, Romania and Bulgaria) was closed to migration during the Cold War, and experienced a major emigration wave since joining the EU.
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“At the regional level, natural change is going to be negative in all four country groups, and net migration is set to be positive,” Pinkus told The Local.
“However, in the east and the south the total population change will still be negative. This is due in the east to high negative natural population change and to relatively low net migration… while in the south it’s because of very high negative natural population change but also quite strong positive net migration,” he added.
The demographic outlook in the east especially is “concerning”, the report says, as “rapid population decline will most likely cause workforce shortages and economic stagnation” and this will be coupled with “brain drain and high outward migration of young and skilled individuals”.
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Sweden’s population growth
On a country level, population is projected to grow by 2050 in Austria, Spain, Sweden, Belgium, Cyprus, Ireland, Luxembourg, Malta, the Netherlands, as well as Iceland and Norway.
Only Sweden, Ireland, Luxembourg, and Cyprus (and outside the EU, Norway and Iceland) are expected to have a natural population growth in the period 2023-2050, while net migration is projected to increase in all countries, except for Latvia, Lithuania and Romania.
France and Germany will be close to net zero population growth. All other countries will face population decline.
Ageing population
The European population is also ageing. The share of people aged 85 and above in the EU will more than double, from the current 3 per cent to 6 per cent by 2050 and nearly 8 per cent by 2070. All EU member states will also experience “substantial increases” in the percentage of their population aged 65 and above by 2050.
“This is a great achievement but it also brings challenges because a larger share of elderly compared to the workforce means that there will be more people that will need not only pensions but also long-term care services, and a smaller set of people who can potentially provide these services,” Pinkus said.
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Smaller labour force
At the same time, 22 out of 27 EU countries will see a decline in their working-age population (20 to 64 years old), the report argues.
The under-20 age group will also decline between 2023 and 2050, except in Sweden, Malta and Luxembourg. This could lead to “imbalances in the labour market” that could be compensated by people working longer, higher participation of women in the work force and more immigration, the report says.
Regional disparities within countries are also likely to widen as rural areas will be “more vulnerable to depopulation” due to “limited economic and employment opportunities and inadequate access to essential services such as education, childcare and healthcare.”
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Policy changes
“We have written this paper under the assumption that the goal of maintaining the current labour force is a good one and that population decline would be undesirable” because it will make it difficult to maintain the current structures of European economies and societies, Pinkus said.
This is also the view of most EU governments and the European Commission, the report says. In this regard, the authors recommend that Western and Northern European countries adopt policies to support the integration of immigrants into the labour force and for rural development.
Southern countries should strengthen family-friendly policies and opportunities for young people, as well as improve immigrant integration and regional infrastructure.
Eastern countries should focus on retaining talent, attracting immigrants in sectors with labour shortages and ensuring work-life balance to increase the participation of women and older workers in the labour force.
Pension reforms and attracting more people in the long-term care sector will also be key, Pinkus says.
“The long-term care sector today largely relies on informal care, which means care inside the family very often provided by women. There needs to be more support for informal carers and it will also be important to reduce the reliance on informal care or, as more people need care, women will be particularly disadvantaged”.
