Europe’s population is growing older and declining. By 2050, the European Union’s population will fall by 20 million, while the number of pensioners will soar. According to the Economist, this demographic challenge is daunting and threatens Europe’s fiscal stability.
As the number of workers fall, the numbers dependent on them for pensions and health care spending will rise. For example:
This soaring elderly dependency ratio will test European budgets to the limits. According to the European Commission, adverse demographic change may push up public spending by between 5 to 8 percentage points. But Europe is already over-taxed and cannot expect their populations to pay more.
Another option is to increase the overall employment rate. The authors note:
Source: Old Europe – Demographic change, Economist, September 30, 2004.
For text (subscription required) http://www.religiousconsultation.org/News_Tracker/old_Europe_demographic_change_trouble_with_ageing.htm
For more on International: Social Securityhttp://www.ncpa.org/iss/int/
FMF Policy Bulletin/ 30 November 2004
