Ageing Populations: an Opportunity for Public Policy Reform

The demographic changes occurring in Europe are well documented and impossible to misinterpret. Fewer children are born today than twenty years ago and people live longer and longer. These two trends give rise to a process known as population ageing which, in turn, has socio-economic consequences that are difficult to comprehend. This paper describes the demographic process that causes ageing and addresses its socio-economic consequences.

The final section analyses the socio-economic consequences of ageing in more detail and discusses possible ways of reforming the current welfare model. The socio-economic consequences of ageing have far-reaching implications for a country’s economic performance and can change a particular country’s position in the world economy in multiple ways. Ignoring these problems and avoiding their reform for the future could impede the economic dynamics that give rise to economic growth and productivity. All European countries face the same dilemma. Thus, dealing with ageing-related problems becomes a game of excellence. The country that best manages its ageing-related socio-economic problems has an opportunity to enter the post-ageing period in a stronger state and with a better economic growth potential than those who fail. I focus primarily on the Spanish case, especially as regards examples. However, the problems discussed have wider implications and many of the suggestions are relevant for other European countries as well.