Demographic Changes in Europe. Dealing with an Aging Workforce

Europe is facing unprecedented demographic change, characterized by a rapidly aging population. At the core of the demographic change are consistently low birthrates (the EU average is of 1.5 children per woman, compared to approximately 2.5 in 1960), increased longevity (today, both sexes live 5 to 10 years longer than in 1960), combined with the results of the baby-boom era. These dynamics have very profound implications on a socio-economic level: examples are increased public spending (due to increased costs for sustaining proper Health Care and Pension Schemes), threatening prospects of scarce labor supply (due to the reduction of the active population) and potentially even very different expense patterns on a macro-economic level (the great number of retirees will start spending the pensions they have accumulated during their working lives).