COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 09.07.1997 
COM(97)361 final 
Demographic Report 1997 
(presented by the Commission) 

Demographic Report 1997 
Part 1 - Impact of demographic change on the labour market 1 
Part 2 - The significance of the regional dimension 12 
Part 3 - Demographic trends in the applicant States 17 
/Q 
Note to the reader : 
All the statistics presented in this report were supplied by the 
Statistical Office of the European Communities. 
lb 
Introduction 
Demography assumes increasing significance as 
slower population growth and ageing, keeps 
tranforming at an accelarating rate the age-
pyramid. The conclusion of the last report1 was 
that, given present trends, the next 30 years could 
see the population aged over 60 grow by 50%, 
while at the same time the number of young people 
(0-19 years) and adults (20-59 years) would fall by 
11% and 6% respectively. 
The effects of this marked transition towards a 
much older population are set to be felt through to 
the middle of the next century. 
The first effects of an ageing population are 
already being felt in the field of social protection, 
particularly on retirement pensions, but also on 
health. This will place great strain on the future 
funding of social protection which is largely 
dependent upon the contributions of the working 
population. The developing trends indicate both a 
fall in the population of working age and an 
increase in the number of older people. As their 
number grow, the role of elderly people in society 
is also going to become increasingly relevant. 
Demography is thus already becoming a crucial 
factor which must be taken into account when 
modernising social protection. 
Demographic change will also impact on the 
characteristics of the population of working age 
who makes up the labour force. What will be the 
demographic changes in this labour force? What 
effect will these changes have on the labour 
market? And will this demographic change require 
specific action? These are the questions which part 
I of this report try to explore. 
The situation at the EU level will also have 
consequences for regional balances in socio­
economic terms. This will be the focus of attention 
in part two of this report. Will demographic 
change help to reduce regional differences or, 
alternatively, will some regions be faced with 
growing imbalances? Locally, how will it be 
possible to bring the labour market into line with 
the pools of available labour? Will the framework 
for action vary from one region to another? 
1 See « The demographic situation in the 
European Union -1995 », European Commission, 
Directorate General V Part three of the report tries to identify the major 
demographic trends in the 12 applicant States2. 
This analysis will aim at providing a better 
understanding of the significance of demography 
for this group of countries which are experiencing 
deep-seated economic change. 
Whether the subject is social protection, 
employment, or structural policy, the demographic 
variable is destined to be an essential factor in 
analysing problems and developing appropriate 
policy. The development of a medium to long-term 
perspective in policy-making is of vital importance 
to the Union. 
The Commission therefore presents the 1997 
Demographic Report as the basis for reflection and 
reaction by policy makers throughout the Union. 
' Malta has been included although, for the time 
being, this country has frozen its membership 
application. 
/ 
PAU 1 1 
impact of demographic change on 
the labour market 
Demographic change and the labour market arc 
linked in many respects, three of which deserve 
particular attention: 
I Demographic change modifies the internai 
characteristics of the labour market. By 
changing the structure and the size of the pools 
of available labour, demography affects the 
basic conditions under which the labour market 
operates; 
2. Demographic change also influences the labour 
market by putting pressures on systems of 
social protection. Imbalances between the 
number of active and non-active people not 
only affect the funding and organisation of 
social protection, but also the functioning of the 
labour market itself; 
3. It is not just the population's age and gender 
structure which affects the active population, 
but also the demography of families and 
households. The propensity to form or dissolve 
couples, have children, child care conditions 
and the living arrangements for young and the 
elderly, are all factors which can have an effect 
on whether or not people take up employment. 
On the other hand, the opportunities offered by 
the labour market influence the lifecycle 
decisions of individuals and households 
The Commission highlighted these three types of 
relationship in its last report on the demographic 
situation, giving an initial quantitative estimate of 
the effects of an ageing population on social 
protection. However, the possible impact of 
demographic change on the labour market is 
equally important. This chapter will seek to outline 
what are likely to be the principal effects of 
demographic change in this area. 
It must also be remembered that these effects are 
no more than a backdrop against which other 
factors inevitably come into play, such as economic 
growth and productivity. Nevertheless, within the 
limits of our approach, the analyses pursued here 
aim and providind an understanding of the impact 
and extent of demographic change and of the 
margins for manoeuvre within the various 
population groups. rv*:?w for shoctttag th*> 20-44 age group 
wfee» drôxiiag the $e£*ê&*iiam ©f wortung a>?? 
In the 1995 report, the group of people aged 
between 20 and $9 years were taken m 
constituting the "papulation of working age". 
Since then, an assessment has been made n t® 
how the balance between active and non-active 
people might shift if the present trend toward® 
longer periods of study and earlier retirement 
were maintained. That «wide it possible to assess 
the ens* of the status qua. However, it should be 
noted that aetftfty pattern;» tend to mmt 
progressively away from the stereotype "yocog-
education, adult-employment, eider-
retirement". This emerging trend renders very 
difficult the choice of the age-groups. 
For the purposes of the present analysis of 
future scenarios, people aged between 20 and 64: 
years were selected as being the most 
Illustrative* First &t all, the present trend of 
entering the labour market after a longer period 
of study is likely to continue - especially 
considering that changes in the nature of 
economic activity will mean that the future 
labour market will require an increasingly 
skilled and qualified workforce. The second 
point is that the active population is already 
feeling the weight of retirement pensions which 
they are reared to fund These trends caO for 
policies aiming at expanding current activity 
levels. 
The choice of this age group offers an additional 
advantage in terms of demographic projections. 
As the study is concerned with the years 1995-
2015, people reaching the age of 20 in 2015 have 
already been bom. The projections are 
therefore unaffected by hypotheses regarding 
future fertility among the 20*^4 age group, an 
element of uncertainty which would have 
reduced the reliability of the forecasts. 
cl 
Figure 1 compares the rate of change for the 
Union's total population to the rate of change 
within the 20-64 age group, with reference to three 
scenarios of demographic change3. 
Three consecutive periods can be identified : 
• over the past 20 years, the population of 
working age has increased at a faster rate than 
the total population; 
• over the next 15 years, the population of 
working age will stabilise at a relatively 
constant level, while the total population will 
still continue to grow; 
• after approximately 15 years, the population of 
working age will start to fall significantly, 
while the total population will slow down with 
a diminishing pace. 
In brief : 
Following a previous period of growth the 
population of working age stabilised m around 
1995; in around 15 years time it will start to fall. 
iffi::.:^i:;p©p^ ; working:: ap^ÉMïIçls r^&Éce; 
the- ; demographic;'; traaisi;;;;^#ii|tt;x:::ilftéï:::LÏ©iâ 
pcsfulaison : will ! tm4 • 'M :&ir^se^|;vfeprieîSx 'M 
social protection: on^the work^ 
' Annex A presents five scenarios in total. 
The three scenarios in question (Young, Baseline 
and Old) plus two more scenarios (High and Low) Figure 1 
Changes in the total population and in the 
population of working age (20-64 years). 
base index of 100 in 1995 for three demographic 
scenarios 
- - - Population of working aga 
Source : Eurostat, observations until 1995, projections 
after that date. 
Within the limits of the demographic approach, the 
measurement of dependency illustrated in figure 2 
can give a good idea of the tension in the sphere of 
social protection arising from demographic trends, 
and its impact on the labour market: 
• Total dependency has fallen over the past 20 
years for two raisons: First, baby-boom 
generations joined the active population, second 
fertility rates have fallen after 1975; 
• Total dependency will start to increase again, 
initially because of smaller inflows of working 
age population and later, after 2010, because of 
the retirement of the baby boom generations. 
Elderly people growth will be the principal* 
source of social protection expenditure increase; 
• Even if there is a reversal of fertility trends, as 
envisaged by the low ageing scenario (scenario 
« c »), this will not be sufficient to prevent in 
the long term, the relative increase in the 
dependency ratio due to the increase in the 
proportion of older people. Total dependency (TB) « 
|0*l9 years + 65 years and +J + (20*64 yearsg 
Dependency of elderly people (D£}~ 
[65 years and *] * [20-64 years} 
dependency of young people (BY) » 
10-19 yearsj • [20-64 years! 
TD~M+D¥ 
In brief : 
The evolution of dependency ratios suggests an 
increase in social expenditure in favour of older 
people. 
The variation in levels of dependency and the 
deterioration of the ratio of young to older 
peuple «re factors which, wift affect the costs and 
organisation of the social protection system* The 
size of the impact wilt also largely depend on 
Other factors as growth, productivity and job 
erej»tfo»**r 
Figure 2. EUR1S 
Measure of demographic dependency 
Total dependency rate (%) Ratio of young people to elderly people 
2,5 
197S 1995 2015 2015 2015 1,5 
0,5 scenarios : 
a 
b c 
|-
1975 1995 2015 2015 2015 
Scenarios a = continuation of present trend, b = maximum ageing, c = minimum ageing 
Source: l-urostat. demographic projections 1996 „ «/-noozn 
•• Cf. "Some economic implications of demographic trends up to 2020", European Economy, 36 (1994) 
Hii 
A closer analysis allows us to estimate the impact 
of changes to the age-pyramid on the active 
population. How have changes in the size of each 
age group influenced the growth of the active 
population in the past and how will they influence 
it in the future? The results are set out in figure 3. 
On the basis of certain hypotheses, this analysis 
seeks to determine the factors leading to a change 
in the size of the working population for each of 
the three decades (see model in Annex B and 
explanation on data sources). This change can be broken down into two factors : 
• the "demography" factor, namely the variation 
in the population's age/sex structure and size 
alone (thus keeping the activity rates constant); 
• the "behaviour" factor, namely the fact that 
levels of activity per age and sex change in time 
(thus the difference between the « real » active 
population and the one obtained while keeping 
the activity rates constant). 
Figure 3 - EUR12 and EUR15 
Respective roles of the demographic factor and behavioural factor in producing changes in the size of the 
active population. 
10 
O 
-2 
1985-1995 1995-2005 2005-2015 
Demographic effect • Behavioural effect 
Sources : Eurostat, 1996 demographic projections, baseline scenario 
Eurostat. Ubour Force Survey (EUR12 1985-1995. EUR15 after 1995) 
Eurostat, projections of activity levels 
An analysis of past data allows for the following 
conclusions : 
• in the Europe of Twelve4, 9.4 million people 
joined the active population between 1985 and 
1995, a 7% growth rate. During this same 
period, demographic change would have 
generated an increase of 9.6 million if it had 
been the sole factor, thus 200,000 more than 
actually recorded. This latter figure indicates 
the extent of the participation decrease in the 
labour market. 
• also between 1985 and 1995, the number of 
jobs rose by just 8.5 million. As the number of 
active adults increased more than the jobs, the 
difference represents the absolute increase in 
unemployment, that is 900,000 more 
unemployed in 1995 than in 19855. 
The same approach has been adopted for the 
development of future scenarios. 
Apart from the impact on employment -
unemployment, the following trends in active 
population arc likely: 
• we can expect to see the active population 
increase by about 6.9 million by the year 2005, 
representing a lower rate of growth than during 
the preceding period. Demographic change will 
contribute less to this increase, 50% of which 
will be due to increased participation in the 
labour market; 
• over the following 10 years - 2005 to 2015 -
the active population could fall by as much as 
2.15 million. An expected demographic fall of 
3.4 million people will be partly offset by an 
extra 1.25 million people participating in the 
labour market. 
Migratory flows could play a significant role in 
shaping the future trends of working age 
population6. In the past decade they have 
contributed to some extent to increasing the size and reducing the pace of ageing of the working age 
population. 
Data on the active population of EUR 15 are 
only available from 1995 
Between 1985 and 1995, peak years for 
unemployment, the total number of unemployed 
people grew from around 15 million to 16,8 
million whereby about 900 000 are to be 
attributed to the new Landers which in this 
simulation are not taken into account. 
See Eurostat scenarios in Annexe A. In brief : 
Demographic change has placed additional 
pressure on the labour market over the past 
10 years because of a sharp increase in the 
labour supply. Together with the growth in 
female participation the result was an 
increase in the active population. 
Even if participation in the labour market 
increases, we will soon see a reduction in 
tensions in the labour market due to the 
demographic fall; 
Changes in the levels of participation will 
play a greater role in the future growth of 
the labour force. 
Economic performance, productivity growth 
and future migratory trends will also play a 
potentially important role. 
future trends of active population become a 
The 
unemployment and 
require a framework which 
stimulates *o4 expands the participation of 
potential labour Supply (mainly women and the 
working age population ever 55) coupled with 
ail effort to stimulate employment-rich growth. 
In the above, trends in the population of working 
age and the active population were seen to be 
closely linked. But what is the situation within this 
population? 
Figure 4 shows that it is going to experience some 
major changes in age structure : 
• A distinctive feature of the past 20 years has 
been the entry of all the baby-boom generations 
to the population of working age. This 
produced a major increase in all age groups, 
especially the intermediate 30-49 age group; 
• In contrast to this, the next 20 years will see 
considerable imbalances in the contribution of 
the various age groups. The 20-29 age group, a 
group which replenishes the population Of 
working age, will fall by 11 million, the 
intermediate group will remain at its present 
size, and the oldest group (50-64 years) will 
increase by 16.5 million, which is over 25%. In brief : 
Within the population of working age, the 
distinctive feature of the next 20 years will be a 
very unequal growth between the different age 
groups, breaking the balance of the past 20 
years. 
iTiTiTnTrmjTrrnTiTiTTiTiTirf 
The increased numbers of older workers will 
call for a new approach to all matters relating to 
the links, between age, labour market and work 
organisation. Working conditions, productivity 
and the lifelong learning wiB all be crucial 
Figure 4 - EUR15 
Increase in certain age groups between 1975-1995 and 1995-2015 
Source: Eurostat, observations until 1995, projections after that date. Baseline scenario 
A further analysis is needed as the ageing 
indicators highlight two rupture points. 
1995, first rupture point 
Tr-c size of the expected fall in the number of 
people aged between 20 and 29 coupled with the 
increase in those aged between 50 and 64 will 
result in a marked ageing of the available pool of 
labour. 
The change in the average age of the population 
aged between 20 and 64, as illustrated in figure 5, 
is an initial indication of this changing trend. 
• This average age scarcely changed during the 
years 1975-1995, when it remained just over 40 
years; Since 1995 it has been a marked tendency for 
the average age to increase, as a comparison of 
the curves' gradient for the two periods clearly 
illustrates; 
After having remained stable for the past 20 
years, the average age will increase by 2.5 vears 
on average by the 2015, a considerable 
increase. 
In brief 
Starting in 1995, and continuing beyond 2015, 
the average age of the working age population 
will show a considerable and constant increase. 
Figure 5. EUR15 
Change in the average age of Che population of working age (20-64 years) 
w ^ ^w» *f« q™ <g™ m~ Y" V™ HT* V* 
Eurostat, observations until 1995, projections after thai dale. Baseline scenario 
2010, second rupture point 
The second point relates to the relative share of 
those expected to join the active population for the 
first time, i.e. the 20-29 age group, compared to 
those who are close to leaving it, i.e. the 55-64 age 
group. Figure 6 shows that: 
• The share of the 20-29 age group has been 
constantly falling since the early 1990s, while 
around the year 2000 the share of the oldest 
group will start to rise; 
• In 2010 the two groups will be level pegging» 
each representing one fifth of the population of 
working age; 
• After this date, the oldest group in the active 
population will account for a progressively 
larger share of the active population than the 
20-29 age group. At the same time, the 
population of working age as a whole will start 
to fall. 
In brief 
From the year 2010 onwards, older workers 
will account for a greater share of the 
population of working age than younger 
workers whose share will progressively 
decrease. The intermediate group (30-54 years) will 
first increase, then stabilise and later begin 
to fall due to the knock-on effect of these 
changes. 
Dew age-pyramid m the 
mean ti&k active 
face-«or efeaHenges 
iMiatimkte Die value of faced with a 
labour force. This 
emptoyment policies 
in their effort to 
human resources ; 
The relative share of the youngest and oldest 
groups of workers as pant of the total 
population of working age will change, as 
will the relative share within the 30-54 age 
group which will consequently face similar 
Figure 6 - EUR15 
Respective shares of the 20-29 and 55-64 age groups in the working age population (20-64 years) 
28% 
27% 
26% 
25% 
24% 
23% 
22% 
21% 
20% 
19% 
18% 
17% 
16% shareof 20^29^ «9? groupjS. 
<è *•** ... . 
- Ùf ..-..„.* 
-*•'• :.-..-....--».„.,,, ...-..*.... T. .r 
share of 55-64 age group 
—,—,—,—i—i—i—i—i—i—i—i—i—i—i—i—i—i—i i i—i—i—i—r-i—i i i r—i l i i i i i i i ' I 
m ao ao oo 
O) CD ao 
O) o 
CD CD CO CD CD CO CD CD CD CD CM O O CM in O o CM 00 T- 5T 
° *" rr 
o o o 
CM CN CM 
Source : Eurostat. observations until 1995. projections after that date. Baseline scenario 
Demogmpfak impact m &* renewal of the popuiatitm »l w-afléag ^ 
In the past, the renewal of the population of 
working age, i.e. the ability to replace generations 
leaving the labour market by those coming in to 
join it, has served to: 
• supply the highest growth sectors; 
• contribute to the system's productivity by virtue 
>f the fact that young people have lower 
cost/productivity ratio ; 
• make a contribution of new skills and flexibility 
in all sectors. 
It is interesting to illustrate this renewal by means 
of two additional indicators. The first estimates the 
balance between incoming and outgoing flows 
(figure 7-a). This gives us a good idea of the 
change in the size of the population of working 
age. The second, more qualitative, indicator 
examines the ratio between numbers joining and 
leaving the labour market (figure 7-b); this is 
essentially a replacement indicator. 
• In terms of balances, the decrease which began 
in 1990 will result in more departures than 
entries by around 2009. 
• In terms of ratios, the replacement rate will fall 
by 35% over 20 years: in 1995 there were 140 
entries for 100 departures; by 2015 there will be 90 entries for 100 departures, and thus a net 
deficit. 
la brief: 
Progressively, there will be less scope to 
adjust the labour market by means of the 
flows of entries and departures ; 
Demographic change will produce negative 
renewal balances for the population of 
working age. The possibilities of skill 
renewal due solely to the entry of young 
people will be limited. 
Measures to activate the available reserves in 
the labour supply wâf have te be accompanied 
by measures to ensure better overall training of 
the labour force motivation and safety» white 
Figure 7 - EUR15 
7-a : Differences between incoming and outgoing 7-b : Numbers joining the population of working 
flows for the population of working age age for every 100 leaving 
2.000.000 
1.500.000 
1.000.000 
500.000 + 
-500.000 160 
2 140 
t 120 
4> •o 100 
80 
60 
40 
20 
0 
1975 1995 2015 
Source : Eurostat. observations until 1995, projections after that date. Baseline scenario. 
lie^og^a^ke^eaj>njd dfflfere%ee laa^w 
Is it possible to determine in more detail how 
demographic change is going to effect the active 
population? Some interesting findings are obtained 
by distinguishing by sex and age group, between 
the effects of demographic change and behavioural 
change on the size of the active population. 
The differences between generations, and 
especially between the sexes, are clearly marked: 
• The increase in the total size of the active 
population recorded between 1985 and 1995 is 
unequally distributed between the sexes, while 
the demographic contribution, which is similar 
between the sexes, is not the same for all age 
groups; 
• Between 1985 and 1995 entry to the labour 
market fell by 200,000. This fall is principally 
attributed to the decline for men, and young 
men in particular. Employment among all 
young people aged between 20 and 29, 
regardless of sex, fell during this period. This 
could in part result from the pronounced 
demographic contribution of the preceding 
generations, which may have blocked their 
access to the labour-market, as well as from the 
long-term trend for increased participation in 
education and training of the younger 
generations; 
• There has been a sharp increase in employment 
among women over 30 during this period. In 
the intermediate group (30-49 years), more 
than 50% of the increase active women 
recorded between 1985 and 1995 is due to the 
increased participation of women in the labour 
market. 
• Among older women workers, participation 
behaviour was responsible for virtually the 
entire increase in activity; 
• The demographic contribution among the 
youngest workers has started to fall and. after 
2005. it will only be the oldest workers who 
will bring any increase due to demographic 
change. In terms of behaviour, and still on the basis of 
the hypotheses for changes to the active 
population, female participation will continue 
to increase, even among younger generations. 
By contrast, between 2005 and 2010 there will 
be reduced male participation in all age groups. 
In brief : 
The separation between the behavioural 
effect and demographic effect reveals the 
change in the size of reserves in the labour 
supply produced by demographic effects; 
Among young people in particular, it will 
cease to be possible to offset the demographic 
fall by increased participation; 
Apart from the potential offered by 
occupational and geographical mobility, 
women constitute the main resource for 
employment growth, especially young 
women, who when they grow older, will 
bring a higher participation and 
employment rate. 
Related issues : 
Maintaining alter women's eroployabtlity 
and their re-entry into work after some 
years of home work, must take into account 
tlte specific characteristics of these groups 
and will require appropriate adjustment 
measures, not only in terms of work 
organisation,, but also to the social 
environment. 
The growing importance of work for women 
means that, snore than ever before, the 
question of eqn?I opportunities is a 
fundamental distension of economic and 
social chatty 
All types of mobility, especially occupational 
mobility, will play a greater role in the years 
to come» 
10 
Figure 8 - EL'R M and EUR15 
Respective rotes of the demographic facter End the behavioural factot in producing 
changes in the size of the active population, per age group and gender, for three periods. 
Males. ZQ-Z$ years Females 20-28 years 
o 
-2 
-4 
-6t 
-8 
-10 
-12 Œ'SSil, 
Act pop.: 
Dem eff. -3 950 000 
-s eco ooo 
[Act. pop.: 
! Dem eff 
iUeh eff -3 000 000 
- 360 000 
-2 640 000 
1985-1995 
1 Demographic effect 1995-2005 2005-2015 1985-1995 1995-2005 2005-2015 
Behavioural effect 
Females 30-49 years I 
1985-1995 1995-2005 2005-2015 1985-1995 19S5-2005 2005-2015 
Males 50-64 years 
Act pop +2 900 000 
Dem eff +3 100 000 
Beh eff - 200 000 
1985-1995 1995-2005 2005-2015 Females 50-64 years I 
10 
j Act pop: 
•Dem. eff 
i Beh eff - 2 200 000 
1 900 000 
300 000 
Act pop: +1 800 000 
Dem. eff + 1 700 000 
Beh. eff. + 100 000 
Act pop )1300 000 
Dem eff +100 000 
iHeh eff • 1 200 000 
1985-1995 1995-2005 2005-2015 
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(ONCLISION 
The analysis of changes in the population of 
working age reveals the extent to which future 
economic growth will be dependent on 
quantitative and qualitative changes in the labour 
force. 
The stabilisation and then fall in the size of the 
population of working age could prove a favourable 
factor in reducing imbalances between labour 
supply and labour demand. However, it will also be 
necessary to deal with a considerable increase in 
the pressure of ageing on social protection, 
especially for pay-as-you-go pension systems. 
Keeping older workers in employment for longer 
could be, in certain sectors, a key element for at 
least partially countering this problem. 
However, keeping older workers in employment for 
more years will add to a second concern linked to 
the demography of the labour force: its internal 
ageing. Thus, adaptability to labour demand 
changes will have to be obtained more from 
resources already in the labour force rather than from new cohorts joining the labûi,-: market. Active 
measures such as rc-qualification. Life long 
learning, measures to ensure employability will be 
required in order to adapt skills and ensure 
economic competitiveness. 
Stronger economic growth is becoming a 
fundamental factor in supporting social protection. 
provided this growth translates into an increase in 
jobs and increased recourse to existing pools of 
labour. For women in particular, this recourse is 
subject to certain constraints. An innovative 
approach will be necessary, including measures to 
promote access to the traditional employment 
market (reconciliation of work and family life), the 
absorption of hitherto exclusively voluntary 
activities by the market economy (community 
actions, responsibility for family care through tax 
incentives, etc.), and more flexible work 
organisation. All types of mobility will play a 
greater role during the years to come. 
See. among others. « The new role of women - Family formation in Modern Societies » edited by Hans-
Peter Blossfeld, Social inequality series. Westview Press. 1994 or « Families, travail et politiques familiales 
en Europe ». L Hantrais and M-T. Lctablier, Cahier du Centre d'Etudes de l'Emploi. PUF, 1996 
11 
The significance of the regional 
dimension 
The previous chapter showed that there are 
important links between demographic change and 
the labour market. However, the aggregate 
approach often fails to provide the most effective 
means of examining these links. Among other 
things, it is not suitable for understanding the 
widely differing trends at regional level. 
The strongly diverging situations found among 
regions suggest that the impact of demographic 
change could be open to different interpretations 
than that provided by the aggregate approach. 
This is confirmed by the regional analysis 
presented in this section. 
Geographical areas 
For reasons which relate primarily to the 
availability of statistical data, the geographical 
breakdown used in this chapter is NUTS 2, 
except for the United Kingdom where NUTS I is 
used» Ireland, Denmark, Austria, Sweden and 
Finland are considered at national level. 
These breakdowns imply certain limitations in 
the present analysis. They do not make it 
possible to take into account the true 
mechanisms at work in eertain regions delimited 
by such factors as local labour pools or 
particular areas of activity* This is why we have 
opted for a generic rather than specific 
interprétation of tht results of our analyses. The Union's regional diversity can \y: iiUt-,! y fed 
with reference to many criteria. Among ihc most 
visible aspects is the uneven population 
distribution, with a large share of the population 
concentrated in a comparatively small part of the 
territory. Possible population change, as illustrated 
on Map 1, is also of particular interest. Among 
other things, it helps to highlight differences in 
future demographic patterns between regions. 
This is particularly interesting because, as shown 
in chapter one, a stage characterised by a constant 
and balanced demographic increase in the 
population of working age is now giving way to 
one of "demographic neutrality", soon to be 
followed by one of negative growth. 
Map 1 shows the growth index for each region 
compared to its population in 1995. On the basis of 
their stage of demographic growth, regions can be 
grouped under three headings: 
• Regions which have already reached the 
negative growth stage, such as the former East 
Germany, Saarland and part of Westphalia, 
northern Italy, Asturias and Aragon in Spain, 
and Lorraine in France; 
• The vast majority of the regions are likely to go 
towards a period of demographic neutrality 
between 1995 and 2015; 
• Finally, sustained growth is found in about one-
fifth of the regions, located in a greater urban 
districts and in the south of Spain, France. 
Italy, Germany, the United Kingdom. Belgium 
and Greece. 
In brief ; 
Most of the Union countries show an uneven 
regional pattern of future demographic 
growth; 
The same country can present a variety of 
situations in terms of demographic 
dynamism; 
Regions with similar characteristics tend to 
form a cluster with neighbouring regions. 
12 
Map 1 
Population growth between 1995 and 2015 
EUR-15 
NUTS 2 (VK : NUTS 0) 
( AU. Fï , SE : NUTS 0) 
Base 100 ~ 1995 • <97"5 
$U 97.5 to 102.5 
102.5 to 110 
> 110 
Eurostat, Demographic projections, 1996 - Medium scenario 
IX. b; 
The effect of polarisation in terms of the 
population growth of regions is a new dimension 
which could influence national and even 
Community economic, social and environmental 
trends. 
Population ageing 
Although there is a marked difference between the 
regions in terms of the stage of population growth 
they have reached, ageing is a phenomenon 
common to all of them. Since 1995, the proportion 
of people aged over 65 has been increasing in all 
areas. The results of this growth of the older 
population arc presented on Maps 2a and 2b which 
illustrate the proportion of people aged over 65 as 
part of the total population 
By 2015 the following developments are likely. 
• As expected, the rate of ageing and, above all. 
the current population structures vary from one 
region to another, 
• The proportion of elderly people will be 
particularly high in northern and central Italy 
where they will account for a quarter of the 
population; 
• To a lesser degree, there will also be a 
preponderance of elderly people in northern 
Spain and. in a more dispersed way, in 
northern and eastern Germany, Greece and 
some central regions of France; 
• The regions which will still have a relatively 
younger population will be more limited in 
number and more localised. The areas in 
question are southern Spain and central 
Portugal, Ireland, Apulia and Campania in 
southern Italy, northern France and Flevoland. 
The East Midlands in the United Kingdom and 
Alsace are more isolated pockets. In brief : 
Although apparent everywhere, population 
ageing will occur at varying rates and 
degrees, affecting populations with very 
different initial age structures. The result in 
20 years time will be a greater diversity of 
age structure in the regions. 
Ageing does not necessarily result in a 
population decrease. In 2015 significant 
population increases will be coupled with a 
quite old population structure. 
The combination of a considerable fall in 
population and a much older population, as 
found in northern Italy and Spain, and irs the 
former East Germany, suggests significant 
demographic decline. 
As mentioned in chapter 1 the future 
prospects are also potentially influenced by! 
economic performance and migratory flows j 
at regional level. ; 
Related issues ; 
• An ageing population is often associated with 
a fall in the proportion of young people. 
Consequently, trends in dependency rates 
are likely to result in even wider differences 
between regions. This divergence determines 
a new regional reality concerning the labour 
market, housing, health and care needs. 
* The polarisation of dependence may result 
in increased costs and greater difficulties for 
the development of certain regions. This may 
befell not only in economic terms but also in 
ecological terms» especially if there is further 
growth of urbanisation and rural 
depopulation. This may have implications for 
structural policies at European level, as well 
m for efforts to promote an improvement in 
the territorial balances across the Union as a 
whole. 
Map 2 a 
Proportion of people aged 65 years and over as part of total population in 1995 
EUR-15 
NUTS2 (UK: NUTS 1) 
( AU, FI et SE : NUTS •) S/ 
1995 
| | <16% 
16 to 18% 
18 to 20% 
> 20% 
Eurostat, Demographic projections, 1996 - Medium scenario 
/3 bh 
Map 2 b 
Proportion of people aged 65 years and over as part of total population in 2015 
EUR-15 
NUTS 2 (UK : NUTS 1) 
(Ar\FIrtSE:NUTSO) 
' tSggfi* 
Kurostat, Demographic projections, 1996 - Medium scenario 
/.'•? &V 
11er^)sJ^îk^^i)0M^oiîhe««<lvé 
It has been seen that older population will grow 
substantially in most European regions over the 
next decades. This becomes a major concern since 
the population which must bear this extra cost is 
simultaneously shrinking. Map 3 gives, at regional 
level, the year when the active population is 
cxspccted to start to fall for demographic reasons. 
In other words, it shows the dates when the net 
demographic contribution to the active population 
will cease. The methodological basis used is the 
same as for the global analysis in part one (see 
Annex B). 
• Several geographical areas, including the whole 
of southern Germany., France, Italy and the 
United Kingdom, will find that over the next 2 
decades natural demographic change will 
depress the numbers in the labour force. 
« Three major geographically compact areas will 
find themselves in exactly the opposite situation 
with a substantial reduction of the potential 
labour supply by the end of the century. The 
regions in question are the whole of Italy lying 
north of Molise, all areas of northern Spain 
lying between Catalonia and Galicia, the far 
north of Germany, North-Rhine Westphalia, 
Saarland. Lorraine and Flanders. 
• The analysis of the year in which a decrease of 
the active population, for demographic reasons, 
will start shows two separate peaks. On the one 
hand, many regions will experience a reversal 
of trends before or shortly after the turn of the 
century On the other hand, many regions will 
experience this after 2010. Very few regions 
will see trends reverse during the period 2000-
2010. In brief : 
There is a ten-year difference between the 
regions in terras of the reduction of the 
potential labour supply 
Several groups of regions have already 
experienced a decrease in the demographic 
contribution to the active population. This 
increases the risk of a laboirr shortage in 
certain areas. 
iilljjii^^ •• lie 
|||iM -use ' of 
IJlilil^ , raisfflg: 
"^^^I^^^^^^^MÊ^. • |«W80ti«g: 
•;:||$!i|i^^ : of all; 
$$|ii|;l^^ the: laboitr 
Irswiii^ I iw|t^sS::::W'ïthe'•.::regtoptf 
:||tiij^ii^ • 
14 
Map 3 
Year in which the active age population will start to fall 
due to demographic reasons 
EUR-15 
NUTS J (UK: NUTS l) 
(AU, PîetSE: NUTS0) 
Year of occurrence 
between 1995 and 1999 ,.v". 
fM between 2000 and 2004 
ËÉ between 2005 and 2009 
between 2010 and 2014 
-f>j not before 2015 
Ï4 V 
Hi -> ff if 
, « *{ ft .if .. -* -.»- • l 
Eurostat, Demographic projections, 1996 - Medium scenario 
IH b,\ S 
Another aspect of ageing has implications for the 
labour market, namely the ageing of potential 
labour forces. In this section, estimates are based 
on the population aged between 15 and 64 years, as 
these are the only age groups for which the 
statistics used are available. 
Map 4 shows the rate of ageing, with a growth 
index for the 50-64 age group as part of the total 
population of working age ranging from 105% to 
160% between 1995 and 2015: 
• The French, Dutch, Belgian and Irish regions 
show a very high rate of ageing within the 
population of working age. 
• Regions with an initially elderly population 
(Germany, northern Italy) show a more 
moderate ageing of the active population. 
• Irrespective of the rate of ageing, the analysis of 
the age structure of active persons (share of 
over 45s within 15-64 age group) shows that it 
is in the German regions that the population of 
working age is likely to be the oldest in the 
Union in 20 years time. More than 40% of the 
over 45s in the 15-64 age group will be found 
in these regions. 
® In nearly all the other regions, the 45-64 age 
group will represent more than a third of the 
population of working age. 
» A lower proportion of 25% will only be found 
in four isolated areas in 2015: southern Spain, 
Ireland, Brittany, Nord-Pas-de-Calais and half 
of the Benelux regions. In brief : 
• Combined with the fall in the demographic 
contribution, the general ageing of the 
population of working age amplifies the 
regional significance of this phenomenon for 
the labour market 
• Germany and Italy generally show a more 
pronounced ageing of the population of 
working age. 
• With the exception of certain isolated areas, 
this phenomenon also affects, with a different 
timing, all Europe's regions. 
Related issues : 
la the économie sphere since the 
phenomenon of the ageing of the working 
âge population h felt more acutely at 
regional level» specific actions may be 
needed, on the basis of regional sector-based 
spceiaiisatfoa and labour marked conditions 
fak more general s&usÂ terms, depending on 
demographic characteristics,, specific policies 
may be needed: to take care of regional 
demands in areas such as housing and health 
tare. 
15 
Map 4 
Growth in the population aged between 50 and 64 years between 1995 and 2015 
EUR-15 
NUTS2 
( AU, FÏ et SE : NUTS 0) 
Base 100 = 1895 
• < 107.5 
HP 107.5 to 125 
SU 125 to 142.5 
> 142.5 
-<7 
(-*^~A~3^ 
Kurostat, Demographic projections, 1996 - Medium scenario 
ft b, j-
•A oilcltisi(iii 
Three underlying trends relating to demographic effects have been identified : 
1. The major difference between the regional picture and national situation; 
2. The polarisation of certain demographic and economic trends with implications for the convergence 
process; 
3. The potential demographic imbalances which could undermine the functioning of the labour market due 
to a labour shortage. 
While there are various uncertainties concerning any scenarios for future demographic patterns in the regions, 
it seems likely that the Union will face new challenges in this regard in the next century. National and Union 
policies will have to ensure that labour resources are optimally used in regions where there are scarce, while 
seeking to ensure that new job opportunities are created where they are in surplus and where unemployment is 
persistently high. While some geographical mobility of labour is inevitable in a market economy, the main 
challenge for the future is to ensure the occupational mobility of the workforce in a context of rapid 
technological change by providing necessary skills. 
16 
PART 3 
.Demographic trends in the applicant States 
Union enlargement is one of the major milestones 
on the road to European integration. Over the next 
years at least some of the 12 present applicant 
States, could find their place within the European 
Union (see footnote in introduction concerning 
Malta). 
It is therefore only fitting to complete our outline of 
the principal demographic challenges facing the 
Union with a brief review of the demographic 
future which awaits these countries. 
The aim here is not to undertake a detailed analysis 
but rather to identify points on which these 
countries converge or diverge, both with respect to 
one another and to the present EU countries, in 
terms of the challenges which their respective 
demographic development could generate. What is the demographic picture of these countries 
in economic transition? An initial indicator, given 
in figure 9, measures the population growth index 
between 1995 and 2015. An almost general lack of 
growth is observed: 
• Whereas between 1995 and 2015 the Union is 
going to see a population increase despite the 
demographic slowdown, this will hold true for 
just four of the candidate States : Poland and 
the Slovak Republic, Cyprus and Malta. 
• If Cyprus and Malta, whose small population 
renders the increase incomparable with the 
others, are excluded all the applicant countries 
will have demographic growth inferior to that 
of the Union. 
Figure 9 - Applicant States 
Total population growth between 1995 and 2015 
(base 100 in 1995) 
130 
in 120 
o 
<? 110 in 
O) 
O) 
*- 100 
% 
o 
O) 
X 0) T3 90 
80 
70 
60 = 100 in 1995 
••• c o 
Î 10 
at 
c 
à 
i. c o 
1 
o c o 
1 
r-e o 
1 — c 0 
1 c o 
1 
N 
CM — e | 
Î 
n | 
1 
o" o 
1 | 
1 
» m 
c o 
ï 
o* c o 
1 
o -
-._ 
a* I* 
Sources : United Mations, World Population Prospect 1996 (applicant States) -Eurostat, Demographic Projections 1996, 
Baseline scenario (EUR15) 
What will be the implications of demographic 
change for the labour market in the applicant 
States? As in the case of the previous analyses, the 
principal conclusions can be drawn from two 
indicators : dependency rates and the growth of the population of working age. The results, presented 
in figure 10, allow for the following conclusions : 
• Some of those countries set to experience a fall 
in total population over the next 20 years will 
17 
also experience a significant fall in the 
population of working age over this same 
period. 
Poland and the Slovak Republic will see the 
population of working age grow at a faster rate 
than the total population. 
Dependency ratios provide a more detailed view 
of the differences between countries in terms of 
demographic ageing. The dependence of older people in all the applicant States is lower than 
in the Union. Five of them nevertheless have a 
higher proportion of older people than young 
people, with relatively high dependency rates 
(Estonia, Hungary, Slovenia, Bulgaria and the 
Czech Republic). 
Poland and the Slovak Republic are worthy of 
particular note among the countries with a 
younger population structure. 
Figure 10 - Applicant States 
Development indicators for the population of working age (15-64 years) between 1995 and 2015 
10a - Growth index for the population of working aee (base 100 in 1995) 
140 
m 
-r- 120 O 
CM 
in 100 o> o> 
T- 80 
JZ 
o 60 
™ 40 o 
20 X 
•o 
^ 0 = 100 in 1995 
— -
o 
10b - Dependency rates in 2015 
de=dep. of elderly (65+/15-64); dy=dep. of young (0-14/15-64); dt=total dep. (de+dy) 
60% 
Sources : United Nations World Population Prospect 1996 (applicant States) - Eurostat, Demographic Projections 1996, 
Baseline scenario (EUR15) 
tkmoisrmf^^^^Kt^?^^ 
The observed slower demographic growth for most 
of the Eastern European States is explained by the 
low fertility rates, the high mortality and the 
important migratory outflows, observed over the 
last years. Total fertility rates have declined 
substantially over the last decade bringing some of 
these States to levels lying below EU average. 
However, the demographic ageing is not so 
advanced in these States because of their relatively 
higher mortality patterns. 
These patterns refer to children under one year of 
age (high infant mortality rates), and the most 
elderly members of the population. Figure 11 plots each country with reference to two 
variables which, generally speaking, serve as a 
development indicator. 
• Leaving aside atypical cases such as Malta and 
Cyprus, with a very different history of social 
and economic development than the 10 other 
applicant States, major efforts are needed in 
order to reduce this mortality. 
• Slovenia and the Czech Republic seem to have 
made progress in this respect, with infant 
mortality rates of below 10 per 1000. 
• Romania has very high infant mortality rates 
and a quite low life expectancy. Together with 
the Baltic States and Hungary, it has achieved 
the poorest performance in terms of life 
expectancy. 
Figure 11 - Applicant States 
Infant mortality and life expectancy at birth in 1995 
25 
O 20 
o 
o 
0 
3 15 
> 
« 
| 10 
e Latvia • Romania 
Hungary 
î Bulgaria 
I • 
Poland 
• !• 
• Lithuania I • 
Estonia i Slovak R. 
Czech R. Slovenia Malta 
• 
EUR1S Cyprus 
• 
68 69 70 71 72 73 74 75 76 77 78 
Life expectancy 
Sources: United Nations World Population Prospect 1996 (applicant States) - Eurostat, Demographic Statistics, 1997 
IUR15) 
Conclusion 
Although it will come later and to a lesser degree, population ageing will also affect Eastern European 
countries. In half of these States demographic trends have already opened the door to increased pressure on the 
social protection system which even now is experiencing difficulties. 
These States are also going to experience a sometimes significant fall in the population of working age. 
heralding problems of a similar nature to those with which European Union will be faced after 2010. A future 
of sustained growth would require the activation of the existing labour force reserves Developments in Poland 
and the Slovak Republic might be somehow different. Sustained economic growth and job creation will be 
required. The gulf between the cities and the countryside may pose a special challenge in these States. 
These States will also be confronted with other challenges, in particular in the area of health, in order to 
improve their high mortality rates. 
9 
ANNEXE 
A. SCENARIOS FOR THE FUTURE DEVELOPMENT OF THE EU POPULATION (1995-2015) 
Average number of children per woman 
High 
Low 
Baseline 
Old 
Young 1995 
1.50 
1.42 
1.45 
1.42 
1.50 2000 
1.75 
1.40 
1.55 
1.40 
1.75 2005 
1.87 
1.40 
1.60 
1.40 
1.87 2010 
1.91 
1.40 
1.63 
1.40 
1.91 2015 
1.92 
1.41 
1.64 
1.41 
1.92 
High 
Low 
Baseline 
Old 
Young 1995 
74.3 
73.5 
73.9 
74.3 
73.5 Life expectancy at birth (Men) 
2000 
75.5 
73.9 
74.7 
75.5 
73.9 2005 
76.9 
74.3 
75.6 
76.9 
74.3 2010 
78.1 
74.7 
76.4 
78.1 
74.7 2015 
79.2 
75.0 
77.2 
79.2 
75.0 
Life expectancy at birth (Women) 
High 
Low 
Baseline 
Old 
Young 1995 
80.7 
80.1 
80.4 
80.7 
80.1 2000 
81.7 
80.5 
81.1 
81.7 
80.5 2005 
82.7 
80.9 
81.9 
82.7 
80.9 2010 
83.7 
81.3 
82.5 
83.7 
81.3 2015 
84.4 
81.5 
83.1 
84.4 
81.5 
Annual migration balance (in thousands) 
High 
Low 
Baseline 
Old 
Young 1995-1999 
934 
527 
719 
527 
934 2000-2004 
977 
391 
654 
391 
977 2005-2009 
840 
388 
605 
388 
840 2010-2014 
788 
396 
592 
396 
788 
20 
B. METHOD OF CALCULATING THE DEMOGRAPHIC AND BEHAVIOURAL EFFECT 
(ACTIVITY RATE EFFECT) IN CHANGES IN THE ACTIVE POPULATION 
On the basis of the population aged between 15 and 64 per year of age and per gender in 1995, and 
demographic projections for the population aged between 15 and 64 per year of age and gender up to 
2015, for each gender we have, 
for Pt = population aged between 15 and 64 in year t 
Pit = population of age i in year t (i ranging from 15 to 64 years) 
o\t = percentage of age i complement in 15-64 age group complement in year t, the 
vector (a 15, cfoX defining the structure per age in year t, so that 
Put / Pt = cTlt with I CT, = 1 for year t 
and for ar, t = activity rate for year of age i in year t 
APlt = active population of age i in year t 
AP, = total active population ( 15 to 64 years) in year t 
the following relations: 
AP,, = ar ,,t x P, t = ar 1>t x a,, x Pt 
AP, = E, (arlt x o\t x Pt) 
and the variation in the active population between two different dates as follows: 
AAP = I, (ar, x atxAP) + l] (arj x ACTJ x P) + I, (Aar, x a, x P) + e 
demographic effect activity rate effect residue 
that is the sum of the two effects: 
• an activity rate effect, expressed by the variation in the active population with a constant 15-64 age 
group complement and constant age structure; this expresses the degree of participation in 
employment of a given complement; 
• a demographic effect, expressed by the variation in the active population with a constant activity 
rate per year of age and constant age structure; this demographic effect combines an effect linked to 
the complement and an effect linked to its age composition. 
As the method was applied to each of the Union countries, the residual factor e linked to the discrete 
nature of the time series has never exceeded 2.5% of the total variation. It was ignored in the analysis of 
results. 
l( 

] I ISSN 0254-1475 
COM(97) 361 final 
DOCUMENTS 
EN 04 05 16 
Catalogue number : CB-CO-97-361-EN-C 
ISBN 92-78-22719-6 
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