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The European Union (EU) will, in the coming decades, face a number of challenges associated with an ageing society. There are three main factors that explain this trend: persistently low fertility rates, increasing life expectancy, and a baby-boom generation that is reaching retirement age. These likely changes in population have led to a debate on how countries will cope with population ageing and the impact it will have on, among others, labour markets, pensions and provisions for healthcare, housing, or social services.
In order to address these challenges, the European Commission released a Green paper in March 2005 (COM(2005) 94) titled ‘Confronting demographic change: a new solidarity between the generations’, which recognised that there will be increasing demands to support a growing number of dependent elderly people (many living alone), while a rising proportion of young adults will likely continue living with their parents well into their twenties. The Directorate-General for Employment, Social Affairs and Equal Opportunities released a Communication titled ‘Dealing with the impact of an ageing population in the EU (2009 ageing report)’. This drew on work conducted by the Directorate-General for Economic and Financial Affairs analysing the impact of ageing populations on public expenditures, through a set of projections (for categories such as pensions, healthcare or long-term care), in order to assess the long-term sustainability of public finances based on a ‘no-policy change’ scenario. In July 2010 the European Commission adopted a Green paper (COM(2010) 365)) titled ‘towards adequate, sustainable and safe European pension systems’. This recognised that pension systems are under pressure from demographic ageing as a result of increases in longevity and declining birth rates and that the financial and economic crisis has made the situation more difficult and the need to address this issue more urgent. The Green paper seeks views on whether, and how, the pension framework within the EU should be adjusted to support Member States in ensuring they provide adequate and sustainable pensions for EU citizens.
Together with improved labour mobility within the EU, migration could play a significant role in alleviating the effects of population ageing and help Europe deal with labour and skills shortages. The EU's efforts to address the social and employment aspects of migration form part of a policy approach designed to manage legal migration, promote integration and fight illegal immigration.