• Europe’s population is ageing rapidly while the proportion of working-age people contracts.
  • Inadequate tax revenue and rising health costs could hamper governments’ ability to pay for the growing demand for social services and pensions.
  • Rather than a calamity, this offers European leaders the chance to embrace inclusive, forward-thinking policies for all citizens.

Europe’s population is maturing. Improved healthcare, better diets and technological advances have helped increasing numbers of older citizens in Europe live well into their golden years.

But in the past two decades, the proportion of people aged 65 and over has increased significantly.

There are now fewer than three adults of working age (20-64) for every European citizen aged 65 years or older, according to Eurostat, the EU’s statistical centre.

This old-age dependency ratio is used to measure the pressure on the working population to support those who are too old or too young to work.

As life outcomes have improved for elderly people (though they were disproportionately affected by the COVID-19 pandemic), fertility rates have fallen. Women that do have children are choosing to have fewer and to become parents later in life.

The pandemic hastened this trend. Women badly affected by pandemic job losses and economic uncertainty delayed starting or enlarging their families.

Last year, France recorded its lowest birth rate since World War II and births in 15 Italian cities fell 22% in December 2020, according to the Italian National Institute of Statistics.

Experts think that if a significant and growing proportion of the EU population is older, this calls for a rethink of policies that traditionally focus on the earlier stages of life.

Governments will need to meet the costs of social services, pensions and quality healthcare.

Where do people live the longest in Europe?

a diagram showing where the ratio of Europe’s oldest people to working age population is highest.
Where the ratio of Europe’s oldest people to working-age population is highest.
Image: Eurostat

In Europe, some of the highest old-age dependency ratios are concentrated in remote, rural or mountainous parts of Germany, Greece, Spain, France, Italy, Portugal and Finland, according to Eurostat.

The highest ratio (78.3%) was recorded in the mountain Evrytania region in central Greece.

This suggests younger people may have left to find employment opportunities elsewhere.

In nearly every European region the old-age dependency ratio is forecast to rise. By January 2050 there will be fewer than two working-age adults for each older person.

How ageing populations affect the economy

The proportion of the population that is more than 80 years old in rich and EU countries is set to double by 2050, according to the Organization for Economic Cooperation and Development (OECD).

An ageing population tends to have more chronic physical and mental health conditions and demand more from its health and social services. Yet if a smaller proportion of people are working, jobs may remain unfilled and there could be less tax revenue to fund public programmes such as healthcare and pensions.

Some governments are encouraging older people to keep working and paying taxes by gradually raising the retirement age. This also gives pension pots longer to mature.

For years the unevenness in population growth has prompted concern that governments will not be able to keep pace with their nations’ spiralling health costs.

Research by the World Health Organization (WHO) suggests this may not be the case. It found that rather than an ageing population, policy choices were the most significant indicator in how radically a country’s healthcare spending rose.

The benefits of maturity

With age comes knowledge. But ageist stereotypes and the uneven quality of healthcare within and across countries deter seniors from taking an active role in society and prevent younger people viewing the state positively.

In addition, the old-age dependency ratio, often used as a warning for the perils of an ageing population, takes no account of the people over 65 years who are economically active, volunteering, and providing care to family members.

Instead of seeing the transition to an older society as negative, a joined-up inclusive approach to policy-making shows potential benefits.

What is the World Economic Forum doing to combat Alzheimer's?

Alzheimer’s Diesease, a result of rapid ageing that causes dementia, is a growing concern. Dementia, the seventh leading cause of death worldwide, cost the world $1.25 trillion in 2018, and affected about 50 million people in 2019. Without major breakthroughs, the number of people affected will triple by 2050, to 152 million.

To catalyse the fight against Alzheimer's, the World Economic Forum is partnering with the Global CEO Initiative (CEOi) to form a coalition of public and private stakeholders – including pharmaceutical manufacturers, biotech companies, governments, international organizations, foundations and research agencies.

The initiative aims to advance pre-clinical research to advance the understanding of the disease, attract more capital by lowering the risks to investment in biomarkers, develop standing clinical trial platforms, and advance healthcare system readiness in the fields of detection, diagnosis, infrastructure and access.

Initiatives such as the WHO’s Decade of Healthy Ageing are bringing together leaders from across the world to explore these and develop policies that work for the elderly and social cohesion.

Its Platform offers best practice resources so that policy makers can cost-effectively adapt initiatives that have worked elsewhere to their specific communities.

The World Economic Forum finds that age inclusion actually makes businesses more successful.

Focusing on lifelong learning, employment opportunities, inclusive cities and integrated health and social care could help the golden years be a time of life that’s celebrated.