Europe’s Coming Demographic Challenge: Unlocking the Value of Health

For nearly a generation, economic growth in Western Europe has lagged conspicuously behind the United States. Europe’s population is aging dramatically; the region’s working-age population will peak in just a few years and decline indefinitely thereafter. If Western Europeans wish to remain economically competitive and enjoy continuing improvements in living standards, they must act now to address this looming demographic challenge.

Fortunately, there is one important demographic realm, critical to both productivity and economic competitiveness, where Western Europe may enjoy a comparative advantage: mortality and health. Today, human capital has replaced natural resources as the driving force behind economic growth, and in this regard, Europe is well-positioned. The present generation of Western Europeans aged fifty to seventy-four is more physically robust and mentally alert than any of their predecessors on the continent—indeed, they are better educated and more highly trained than any cohort before them. The promise of “healthy aging” offers significant opportunities for economic growth and development for Europe in the decades ahead—if governments and citizens are willing to grasp them. Throughout Western Europe, perverse economic and social policies are driving older workers away from the labor force. For the region to capitalize upon the potential of a healthy older workforce, it must reverse this pervasive retreat from paid work at older ages.

Europe’s Coming Demographic Challenge: Unlocking the Value of Health examines the region’s demographic challenges, the curious new phenomenon of the “underworked European,” and policies that stand in the way of the region benefiting from its health advantage