Facing the demographic changes: A European overview

In the coming decades Denmark, like the rest of Europe, will be faced with the consequences of the constantly changing composition of age structure in the population – driven by low birth-rates and increasing life expectancy – as well as of a diversification in lifestyles and hence in the definition of the concept of family.

These rather profound changes in the composition of the population will have powerful impacts on the future of all European societies and economies, and will require reflection as to how trade unions can contribute to ensuring that welfare states remain financially sustainable in the future and provide adequate as well as appropriate benefits and services. Furthermore – though this is an aspect not examined in detail in this background document – trade unions will also have a major role to play in managing the challenge represented by the shrinking working-age population that will face Europe as from 2010. In other words, the demographic changes will put something of a strain on the financing of the welfare states as we know them today and will require a reassessment of the role of social protection in providing benefits and services.

The magnitude and impact of the changing demographics vary greatly across the European Union, depending on a host of different factors such as birth rates, longevity, size of baby boom, the method of financing, as well as levels of expenditure, social security and employment, and economic and productivity growth. Although choices made today will not have a major impact on population composition until more than a generation has passed, they will have a direct impact on the wellbeing of the population in the short, medium and long run. In a European, or even global, context Denmark appears to be well equipped to face the demographic challenges, in the sense that the birth rate is fairly high, employment levels are also high and social security expenditure is under control and geared up to face the demographic challenges. However, as is always the case, adjustments are bound to be required and to take place in future, as society evolves and moves ahead.

This report – which is a part of the joint LO and FTF project carried out by the ETUIREHS on the ‘Lisbon Strategy and employment policies under revision: prospects and proposals’ – sets out and discusses the main challenges for the European Union member states stemming from the demographic changes. For the trade unions the challenge in this respect is to ensure that the requisite adjustments and improvements are carried out in an integrated manner, taking a life-course approach to employment as well as social protection and thereby allowing for a more fluid interchange between education, work, family responsibilities and retirement, while guaranteeing that social cohesion is maintained and improved. Two very important issues in this whole configuration, namely migration and youth, are mentioned only in passing in this report.

The report is structured as follows. Section 1 gives a brief overview of the main changes in the demographic landscape. The challenges in terms of social cohesion are discussed in Section 2. The challenges and opportunities with regard to welfare state and labour market reforms are described in Section 3, while conclusions can be found in Section 4.