Time is ticking for Europe, as it begins to take its demographic challenge seriously. The European Commission recently appointed Dubravka Šuica from Croatia to the position of Vice-President for Democracy and Demography. Her mission letter outlines her job for the next five years: “ensuring that Europe understands and responds to one of its deepest lying challenges: demographic change”.
Europe now has the world’s oldest population, with the median age hitting 43. From 2021 – just next year – Europe’s population is forecast by the United Nations to start shrinking. Natural increase actually became negative in 1990-2000, but now net migration is no longer able to offset population decline.
The working age population (those aged between 20 and 64 years old) peaked in Europe in 2010, and by 2035 there will be about 50 million fewer people again of working age. That’s a lot less tax being paid and much less industry being generated. The ratio will be two people of working age to support every one person older than 65. That’s a lot of pension money to raise. The Financial Times recently discussed the economic effects of such drastic change, and its charts are worth a look.
Some European countries have it tougher than others. Southern Europe as a whole has a fertility rate of 1.37 births per woman, well below the 2.1 needed to replace the population. Worldwide, Portugal, Greece, Italy and Spain are among the economies with the lowest number of births per woman, and Spain and Italy are expected to lose more than a quarter of their workforce by 2050.
Something is going wrong when people are not having children, but what? Economist Stefano Scarpetta, the director for Employment, Labour and Social Affairs at the OECD, is among those who think that more cheap child-care options need to be on offer so that women can both join the workforce and have babies. But do European women actually want their children to be brought up by “cheap childcare”?
Perhaps a more flexible job market is a better answer to the combined challenges of an ageing population, encouraging women to fulfil some of the necessary roles in the labour market, and collecting enough to support the ageing population.
There needs to be some sort of halfway-house solution for mothers who wish to work, but who also see the roles of bringing up children under their own influence and care, and creating a loving home, as very important too. Society needs to see all the work which happens within a loving home as important and clearly value those women. This too will help to increase fertility.
Equally, those who are ageing may not want full-time jobs; flexible or part-time work could suit them better. A re-think of the diversity of the workforce is happening within many companies – and both mothers and the older people need to be better included within that diversity, and the available skills better appreciated.
That said, it seems unfair to make mothers of young children feel that they should be working outside of their homes if they do not wish to. After all, they are the ones bringing up the generation who will fill a future workplace. If they have the time and support to do their job well, that generation will be good and well-adjusted citizens who will not enter our criminal justice or welfare systems, but be productive members of society.
The ageing are perhaps a different story. Much of Europe needs to re-think the appropriate age of retirement if it is to avoid putting too heavy a burden on young families. I think it is important that a higher age of retirement should not preclude people qualifying for health and disability benefits at a younger age where necessary.
Shannon Roberts is co-editor of Demography is Destiny, MercatorNet’s blog on population issues.