Demography, ageing and pensions

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Demography, ageing and pensions

• Can Europe afford to grow old?

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What presentation is about?

• The challenges of European demography
• A new solidarity between the generations
• What European Union already done and what should
  its role be?

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Europe is facing demographic change

• In 2003, the natural population increase in
  Europe was just 0.04 per annum.
• The fertility rate has fallen below 1.5 children
  per woman in many Member States.
• The region's old-age dependency ratio is
  projected to double to 54 percent by 2050.
• Between 2004 and 2050, the number of young
  persons in the EU will drop by 18 percent. The
  working-age population will fall by 48 million,
  or 16 percent, whereas the elderly population
  aged 65 will rise sharply, by 58 million, and
  the fastest-growing segment of the population
  will be the very old (aged 80).

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Ageing of Europe

• The aging of Europe is a social phenomenon in
  Europe characterized by a decrease in fertility,
  an increase in mortality, and a higher life
  expectancy. The ageing of Europe specifically
  refers to the increase in the percentage of
  Europe's elderly population relative to its
  workforce.

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Reasons of ageing

• Continuing increases in longevity as a result
  of considerable progress made in
• health care and quality of life in Europe.
• The continuing growth in the number of workers
  over 60.
• Continuing low birth rates.

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The challenges of European demography

• The Union no longer has a demographic motor.
• Immigration.
• The situation in the candidate countries
  accentuates the demographic contrasts.

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Underlying projections

• fertility rates in all EU countries are, and are
  projected to remain, below the natural population
  replacement rate.
• the recent decline in fertility rates followed
  the postwar baby boom, and the impending
  retirement of these cohorts will lead to a
  transitory increase in the old-age dependency
  ratio.
• life expectancy at birth is projected to rise by
  a further six years for males and five years for
  females by 2050, with most gains resulting from
  longer life spans.
• large net migration inflows are projected up to
  2050 although cumulating to close to 40 million
  people, they will not offset low fertility and
  growing life expectancy.

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Growth and labor

• The employment rate is projected to rise from 63
  of the potential labor force in 2004 to 67 by
  2010 and to 70 by 2020.
• The employment rate of older workers (ages 55 to
  64) is projected to increase substantially,
  reversing the trend toward earlier retirement and
  reflecting the positive effects of recent pension
  reforms.

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EU activities in solving problem

• Commission staffworking paper The Stockholm and
  Barcelona targets increasing employment of older
  workers and delaying the exit from the labour
  market.
• The joint employment report 2000, 2002
• European Employment strategy 2003-2010
• Lisbon strategy
• Communication The demographic future of Europe
  from challenge to opportunity
• Commission paper Faced with demographic change,
  a new solidarity between generations

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A new solidarity between the generations
(Commission's green paper)

• Better integration of young people
  (non-discrimination ground for job seeker, more
  flexible education)
• A global approach to the working life
  cycle(flexible organization of working time,
  change peoples behavior with regard to older
  people)
• A new place for elderly people(mobility)
• Improvement of health profile of todays younger
• generations

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What should the European Unions role be?

• Promoting demographic renewal in Europe
• Promoting employment in Europe more jobs and
  longer working lives of better quality
• A more productive and dynamic Europe
• Receiving and integrating migrants in Europe
• Sustainable public finances in Europe
  guaranteeing adequate social security and equity
  between the generations.

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How should policies change?

• the projections support the current thrust of the
  EU's economic policy strategy, as defined in the
  Lisbon agenda.
• efficient pension reforms (pension systems should
  be designed to be sustainable in the face of
  uncertain economic and demographic developments).
• more complex policy challenges in the area of
  health care and long-term care.
• uncertainty in demographic and budgetary
  projections should be addressed more
  systematically.

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Sources

• European Commission, Green Paper on Confronting
  demographic change a new solidarity between
• the generations, 2005
• http//ec.europa.eu/employment_social/news/2005/ma
  r/comm2005-94_en.pdf
• European Commission, Communication on The
  demographic future of Europe from challenge to
• opportunity, 2006
• http//ec.europa.eu/employment_social/news/2006/oc
  t/demography_en.pdf
• European Parliament, Resolution on Demographic
  challenges and solidarity between the
  generations,
• 2006
• http//www.europarl.europa.eu/sides/getDoc.do?pubR
  ef-//EP//NONSGMLTAP6-TA-2006-
• 01150DOCPDFV0//ENlanguageEN
• The World Bank, Averting the Old-Age Crisis
  Policies to Protect the Olda n Promote Growth,
  The
• World Bank, 1994
• http//wwwwds.worldbank.org/external/default/WDSCo
  ntentServer/WDSP/IB/1994/09/01/000009265_397070213
  
• 4916/Rendered/PDF/multi_page.pdf
• Cichon, M., The Ageing Debate in Social Security
  Barking Up the Wrong Tree?, Leo Wildman
• Symposium, 1995
• http//www.ilo.org/public/english/protection/secso
  c/downloads/publ/ageing.pdf
• Holzmann, R. et all., Pension Reform in Europe
  Process and Progress, The World Bank, 2003
• http//www1.worldbank.org/sp/doc/PensionReformEuro
  pe.pdf