Demographic change and its impact on economies and local areas
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1. The working age population in the EU and US is projected to decline as a percentage of the total population between 2000-2039, with Europe experiencing particularly rapid population aging. 2. Many EU regions will see the number of people aged 20-64 per 10,000 aged 65+ fall below 200 by 2030, indicating an increasing elderly dependency ratio. 3. If EU employment is to grow 1% annually as targeted by Europe 2020 goals, growth will turn negative around 2030 due to declining working age population unless productivity increases are achieved. This will further pressure productivity and economic growth.
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Demographic change and its impact on economies and local areas
- 1. Demographic change and its impact on economies and local areas Jörg PESCHNER European Commission, DG EMPL OECD LEED Webinar Local economic resilience and adaptability to long-term challenges 19 January 2016
- 2. • Working-age population here: age group 15-64 % of total population 2000=100 80 85 90 95 100 105 110 115 120 125 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 USA EU28 58 60 62 64 66 68 70 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 USA EU28 Sources: UN World Population Prospects 2012 (medium variant) for the US, Eurostat Europop 2013 population projection (main scenario) for the EU .. will not be the only place where ageing will take place.. .. but ageing pattern will be particular in Europe. Europe…
- 3. Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+ Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware
- 4. Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+
- 5. Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+
- 6. Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+
- 7. Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+
- 8. Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+
- 9. Source:LFSdata,owncalculations basedonDGEMPL‘sregionalprojectionsoftware Fast population ageing: Number of people aged 20 to 64 per 10.000 aged 65+
- 10. Source: Own calculations based on Eurostat EU LFS and Eurostat Europop 2013 population projection 186 206 226 246 266 286 306 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 millions 60.0 65.0 70.0 75.0 80.0 85.0 90.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 % of Working Age Population (20-64 years) Potential employment paths 2021 2032 2032: 88% EU28 „Europe 2020“: +1% p.a. „Europe 2020“: 75% by 2020 Workforce development, age group 20-64 years Working-age population Active population Employment
- 11. Conclusion (1) Pursuing a 'Europe 2020'-compatible 1%- employment growth path, EU's employment growth would turn negative around 2030 at the latest. Impact on Europe's growth potential?
- 12. -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 000 002 004 006 008 010 012 014 016 018 020 022 024 026 028 030 032 034 036 038 040 annual growth in %avg 2000- 2008 avg 2008- 2013 Potential employment growth paths Necessary productivity Growth, LOW scenario Employment growth, LOW scenario EU28 Source: Own calculation based on Eurostat EU LFS, Eurostat Europop2013 population projections and National Accounts "sustainable" GDP-growth Productivity growth Employment growth HIGH scenario
- 13. Conclusions 1. Pursuing a 'Europe 2020'-compatible 1%-employment growth path, EU's employment growth would turn negative around 2030 at the latest. 2. Pressure on productivity growth will multiply. → Invest in skills and education → Tap more efficiently into all human resources (increase employment rate). → Think about being more open to third country migration
- 14. Growth potential of EU human resources and policy implications for future economic growth European Commission, Working Paper 3/2013 by J. Peschner and C. Fotakis Demography Report (Short Analytical Web Note 3/2015, European Commission, DG Eurostat, DG EMPL) Demographic change, human resources constraints and economic growth European Commission, Working Paper 1/2015 by C. Fotakis and J. Peschner [email protected] Thank you!