REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the impact of demographic change
Date: 2020-06-17
Institutions: European Commission, Secretariat-General
Subjects: demographic analysis, education, geographical mobility, geopolitics, labour market, organisation of health care, population policy, public finance, regional disparity, social policy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.6.2020  COM(2020) 241 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the impact of demographic change {SWD(2020) 109 final}  
 
 
TABLE OF CONTENTS 

1. 

INTRODUCTION ...................................................................................................... 2 

2.  THE DRIVERS OF DEMOGRAPHIC CHANGE IN EUROPE ............................... 4 

2.1. LONGER LIFE EXPECTANCY ........................................................................ 4 
2.2. FEWER BIRTHS ................................................................................................. 7 
2.3. AN AGEING POPULATION ............................................................................. 9 
2.4. SMALLER HOUSEHOLDS ............................................................................. 10 
2.5. A MORE MOBILE EUROPE ........................................................................... 11 
2.6. A CHANGING POPULATION SIZE ............................................................... 12 

3.  THE  IMPACT  OF  DEMOGRAPHIC  CHANGE  ON  OUR  SOCIAL  MARKET 
ECONOMY .............................................................................................................. 14 

3.1. PEOPLE, WORK AND SKILLS ...................................................................... 15 
3.1.1 A LARGER AND MORE INCLUSIVE LABOUR MARKET ...................... 16 
3.1.2. PRODUCTIVITY THROUGH SKILLS AND EDUCATION ...................... 18 
3.2. HEALTH AND LONG-TERM CARE .............................................................. 19 
3.3. THE IMPACT ON PUBLIC BUDGETS .......................................................... 21 
3.4. THE REGIONAL AND LOCAL DIMENSION ............................................... 22 
3.4.1. QUALITY OF LIFE, INFRASTRUCTURE AND ACCESS TO SERVICES25 
THE TWIN TRANSITIONS AND DEMOGRAPHIC CHANGE ................ 28 
4. 
5.  
THE GEOPOLITICS OF DEMOGRAPHICS: EUROPE IN THE WORLD  29 
CONCLUSIONS AND OUTLOOK ................................................................................. 32 

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1. 

INTRODUCTION 

The outbreak of the COVID-19 pandemic changed Europe and the world within the blink of an eye. 
It  tested  our  healthcare  and  welfare  systems,  as  well  as  our  economic  and  social  resilience.  It  will 
leave a lasting impact on the way we live and work together – even once the virus has disappeared. 
And  it  struck  at  a  time  when  Europe  had  already  been  going  through  a  period  of  profound 
transformation through climate, societal and demographic change. 

Demographic change is  about people and their lives.  It  is  about  what  we do, how we work and 
where  we  call  home.  It  is  about  our  communities  and  the  way  we  all  live  together.  It  is  about 
embracing  the  variety  of  people  and  backgrounds  that  enrich  and  shape  our  societies,  make  us 
stronger and bring to life the EU’s motto, United in Diversity. This is more needed than ever. As we 
slowly and cautiously emerge from the lockdowns imposed across Europe, we are reminded of the 
importance  of  understanding  and  responding  to  the  impact  that  demographic  change  has  on  our 
society. This work will have to be factored into Europe’s recovery and lessons learnt– be it on the 
social and economic dimension, or on health and long-term care and much more besides. 

Over  the  last  weeks  and  months,  the  link  between  demographic  structures  and  the  impact  and 
recovery potential has been sharply and often painfully exposed. We have seen our oldest generation 
suffer the most, with the elderly being the most vulnerable in this crisis. They are not only at higher 
risk of complications if they catch the disease but are also some of the most isolated and cut off by 
the  social  distancing  and  lockdown  measures  taken  to  save  lives  across  Europe.  The  need  for 
solidarity between generations is one of the driving forces of Europe’s recovery.1  

Managing the impact of long-term demographic change has many different facets: how we manage 
our public health, public budgets or public life, but also on how we tackle issues like loneliness, care 
in  the  community  and  access  to  vital  services.  Addressing  these  issues  will  be  important  for  a 
successful recovery and will determine the speed and the extent to which we will be able to rebuild 
our  everyday  lives,  social  networks  and  economies.  In  the  longer  term,  this  is  an  opportunity  for 
Europe to build a fairer and more resilient society. 

We can never underestimate the damage from the crisis or the need to deal with all kinds of loss. In 
that  context,  it  may  appear  contradictory  to  say  that  Europeans  are  generally  living  longer, 
healthier and safer lives. However, in the longer-term this is still the reality and we should be proud 
of the great strides made in the past decades to achieve this. Europe’s welfare and healthcare systems 
are  the  most  advanced  globally.  Coupled  with  the  skill  and  sacrifice  of  so  many  frontline  workers 
they have helped save countless lives since the beginning of the crisis.  However, the stress they were 
put under, especially in areas with an older population, has shown the need to support them further.  

Thanks to this progress, our quality of life remains unique and our societies some of the most equal 
in  the  world,  even  if  inequalities  still  persist.  We  are  becoming  an  older  population  and  generally 
choosing to live in smaller households. We are increasingly on the move, working longer, learning 
more and changing jobs more often. These trends all have a significant impact on our society - and 

1 COM(2020) 456 final: Europe’s moment: Repair and Prepare for the Next Generation 

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some of these may have been factors in the way the virus took hold and spread in some countries, 
whether it be ageing population, household composition or population density.  

These  issues  can  often  best  be  addressed  at  the  local  and  regional  level.  This  reflects  the  fact  that 
demographic  change  often  varies  significantly  between  different  parts  of  the  same  country.  Some 
regions  face  a  twin-challenge  of  low  income  and  rapidly  declining  population.  With  31  million 
people  living  in  these,  mostly  rural,  regions,  the  stakes  are  high.  Europe  will  strive  to  improve 
living standards and reduce disparities. It is about ensuring people’s needs are catered for and that 
there are prospects and job opportunities where they live. It is about access to healthcare, childcare 
and education, as well as other vital local services, such as post offices, libraries or transport. 

Whilst  changes  in  demographics  are  not  new,  the  difference  in  our  lives  is  felt  more  acutely. 
Addressing  this  change  will  be  all  the  more  important  as  Europe  embarks  on  its  path  towards 
recovery. Maintaining the focus on the twin green and digital transitions will help provide many of 
the innovative and sustainable solutions we need to address the impact of demographic change. 

Demographic  change  also  affects  Europe’s  place  in  the  world.  As  the  share  of  Europe’s 
population in the world continues to shrink, the need for the EU to speak and act as one, leveraging 
all of its collective strengths and diversity, becomes all the more important. This should also be seen 
in  the light  of major demographic changes in  our neighbourhood  and across the world, which  will 
have a direct impact on Europe itself. 

This report presents the drivers of demographic change and the impact they are having across 
Europe2.  It  will  help  identify  how  the  people,  regions  and  communities  most  affected  can  best  be 
supported  to  adapt  to  changing  realities  –  through  crisis,  recovery  and  beyond.  The  aim  of  the 
Commission’s work in this  area is  about  improving our knowledge and foresight  to  ensure we can 
support  those  that  need  it  –  both  today  and  in  the  future.  It  is  not  necessarily  about  reversing  or 
slowing down any of the trends; it is about equipping ourselves with the right tools to provide new 
solutions and support people through change. 

This is ultimately about ensuring that no region and no person is left behind - a feeling which can 
ultimately lead to a loss of faith in our democracy. This is why this Commission has for the first time 
a  Vice-President  for  Democracy  and  Demography  and  it  is  why  this  topic  will  also  feature  in  the 
Conference  on  the  Future  of  Europe,  through  which  citizens  will  play  a  leading  role  in  building  a 
more resilient, sustainable and fair Union. While many of the competences in these areas are in the 
hands  of  Member  States,  the  Commission  is  ready  to  lead  the  way  by  identifying  issues  and 
supporting national, regional and local action. 

2 - 
and tables. 

The Commission Staff Working Document (SWD(2020) 109 final) complements the report with additional figures, maps 

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2.  THE DRIVERS OF DEMOGRAPHIC CHANGE IN EUROPE3 

As Europeans, we are living longer than ever before and becoming an older population with every 
year that passes. More of us are choosing to live, work or study in another EU country and migration 
to  or  from  Europe  continues  to  fluctuate.  Increasing  numbers  of  us  are  also  now  living  in  smaller 
households and we are having fewer children than before. These drivers of demographic change vary 
across Europe, often significantly between different regions of the same country4.  

2.1. LONGER LIFE EXPECTANCY   

Europeans enjoy longer lives, on average for longer in good health. Life expectancy at birth has 
increased by about 10 years for both men and women over the last five decades5. The pandemic has 
exposed  the  vulnerabilities  of  an  ageing  population,  but  is  not  thought  likely  to  have  changed  this 
overall positive trend on life expectancy.  

In 2070, life expectancy at birth is projected6 to reach 86.1 years for men, up from 78.2 in 2018. For 
women,  it  is  estimated  at  90.3  –  up  from  83.7. Where  you  live  has  a  major  influence  on  your  life 
expectancy. At national level, life expectancy at birth ranges from 83.5 in Spain to 75 in Bulgaria. 

There are differences between women and men living in different parts of the EU. While women’s 
life  expectancy  at  birth  for  the  EU-27  is  5.5  years  higher  than  men’s,  the  picture  is  not  the  same 
everywhere.  In  Latvia  and  Lithuania,  the  gap  is  more  than  nine  years,  while  in  Denmark,  Ireland, 
Cyprus, the Netherlands, Sweden, it is less than four. 

Gap between life expectancy at birth between women and men, 2018 

Source: Eurostat 

3 In this report the terms Europe and EU refer to EU-27 unless otherwise specified. 
4 Eurostat statistical data used in this report are based on figures taken from the Eurostat database in May 2020. 
5 For more information, cf Eurostat’s “Statistics Explained” on mortality and life expectancy statistics:  
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Mortality_and_life_expectancy_statistics  
6 Population projections are hypothetical ‘what-if’ scenarios based on observed data to help understand population dynamics. 
Importantly, projections must not be taken as forecasts. For more information, Eurostat’s  population projections: 
https://ec.europa.eu/eurostat/web/population-demography-migration-projections/population-projections-data  

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We spend a large part of our life in good health. The number of reported healthy life years7 varies 
by sex and country. For the EU as a whole, the number of healthy life years at birth in 2018 was 64.2 
years  for  women  and  63.7  for  men8.  Again,  this  varies  significantly  depending  on  where  you  live. 
For example, a man living in Sweden has on average more than 73 healthy life years, compared to 51 
for a man in Latvia. Almost half of older people  have a disability9 – with this figure getting higher as 
people get into the older age groups. They are more prone to face challenges of reduced mobility and 
their quality of life depends on how inclusive and accessible our societies and environment are. 

Healthy life years at birth, 2018 

Source: Eurostat 

7 For more information on the concept and data, see: https://ec.europa.eu/eurostat/statistics-explained/pdfscache/1101.pdf 
8 For more information see State of Health in the EU, Health at a glance: Europe 2018, OECD/EU (2018)  – 
https://ec.europa.eu/health/state/glance_en  
9 In 2018, 49% of persons 65 years or older perceived having a disability or long standing activity limitation. (Source: Eurostat online 
table hlth_silc_06) 

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Life expectancy at birth by region10, 2018 

10 There are three types of regions used in the common classification of territorial units for statistics, known as NUTS. This map shows 
NUTS2 regions. The average NUTS2 region in a country has a population between 800,000 and 3 million people.  

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2.2. FEWER BIRTHS 

From  the  1960s  until  the  mid-1990s,  the  average  number  of  childbirths  per  woman  in  Europe 
decreased11.  It  recovered  somewhat  in  the  2000s  and  then  roughly  stabilised  in  the  decade  that 
followed.  

In 2018, the figure stood at 1.55 children per woman. This is below the value of 2.1 considered to be 
the level required to keep the population size constant in the absence of migration. Almost no region 
in Europe has a rate at this level12, with some regions registering a rate of less than 1.25. This is the 
case for instance in the north-west of the Iberian peninsula, South East Italyand Sardinia, and some 
parts of Greece.  

Women are also on average giving birth to their children later in life. Between 2001 and 2018, the 
mean age of women at childbirth in the EU went from 29.0 to 30.8. 

Fertility indicators, EU-27, 2001–2018 

Source: Eurostat 

11 For more information, see Eurostat’s “Statistics Explained” on fertility statistics:  
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Fertility_statistics 
12 Out of the 1169 NUTS-3 regions, only four have a fertility rate above 2.1: Mayotte (4.6), Guyane (3.8), La Réunion (2.4) and 
Melilla (2.3). 

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Total fertility rate by region13, 2018 

13 This map shows NUTS3 regions. The average NUTS3 region in a country has a population between 150,000 and 800,000 people.  

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2.3. AN AGEING POPULATION 

Europe’s  population  is  getting  older.  The  median  age14  of  the  EU-27  population  has  been 
increasing  for  years  and  is  projected  to  increase  at  a  similar  pace  for  another  two  decades.  The 
median age may reach 49 in 2070 – up around five years from today. 

Median age of EU-27 population, 2001-2070 

Source: Eurostat  

As our median age increases, so does the number and share of people in the older age groups. 
By 2070, 30% of people in Europe are estimated to be aged 65 and above, up from about 20% today. 
From 2019 until 2070, the share of people aged 80 or over is projected to more than double to 13%15.  

At the same time, the working-age population (20-64 years)16 is projected to decrease. In 2019, 
it amounted to 59% of the entire population. By 2070, it is projected to be down to 51%. In that time, 
the number of children and young people (aged 0-19) is projected to decrease by 12.6 million.  

14 The median age is a broad measure of how old a population is: half the population is older than the median age while the other half 
is younger. 
15 For more information, see Eurostat’s “Statistics Explained” on population structure and ageing:  
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Population_structure_and_ageing  
16 The working-age population is conventionally defined between 20-64 years. As the population ages and more people of 65 years and 
over remain in employment, this conventional definition may change. 

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Population by age groups, EU-27, 2001-2070

Source: Eurostat  

2.4. SMALLER HOUSEHOLDS 

As the number of households in Europe goes up, their average size goes down. In 2019, there 
were 195 million households in Europe, an increase of 13 million since 2010. Those households are 
on  average  getting  smaller.  In  2010,  the  average  household  consisted  of  2.4  people.  Over  the  last 
decade, it was decreasing slowly and by 2019, it was down to 2.3. 

About  a  third  of  all  households  consist  of  a  single  person  –  a  19%  increase  since  2010.  The 
overall trend is towards households consisting of couples without children, persons living alone and 
single  parents.  In  the  majority  of  households,  there  are  no  children  while  single  parent  households 
have gone up by 13% since 2010. Such patterns may also play a role in the context of the pandemic, 
where particular household structures may have affected the spread of the virus. 

As  Europe  gets  older,  a  growing  number  of  people  aged  65  and  above  will  live  alone17.  This 
applies especially to  women.  In 2019, the share  of older women living  alone was 40%, more than 
double the figure for men. 

17 Ageing Europe: Looking at the lives of older people in the EU, European Commission (2019). 

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Households by presence of children, EU-27, 2010-2019 (in millions) 

Source: Eurostat 

2.5. A MORE MOBILE EUROPE 

The  movement  of  people,  both  within  and  beyond  Europe’s  borders,  is  a  key  driver  of 
demographic change.  

Some  people  cross  the  EU’s  external  border,  moving  in  or  out  of  Europe.  In  2018,  2.4  million 
people  immigrated  into  the  EU-27,  while  1.1  million  people  emigrated  to  a  non-EU-27  country18. 
Thanks  to  the  free  movement  of  people  in  Europe,  many  people  choose  to  move  within  the  EU. 
These movements have no effect on the size or age structure of the EU as a whole – but they have a 
significant effect at national, regional and local level. In 2018, 1.4 million people moved to another 
Member State. This group also includes third country nationals living in Europe. 

On  1  January  2019,  there  were  21.8  million  third  country  nationals  in  the  EU-27  population, 
representing 4.9% of the population. 13.3 million EU citizens were living in another EU country. 

The yearly size of these flows can change but the long-term trends are relatively stable. In the 
last 35 years, Europe has been a continent of net immigration. Since the mid-1980s, each year more 
people moved into the EU than left, resulting in positive net migration. 

18 In addition to third country nationals, these figures include EU citizens who return to/or leave from the EU. For more information, 
see Eurostat’s “Statistics Explained” on migration statistics: https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Migration_and_migrant_population_statistics  

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It remains to be seen how emergency measures limiting the mobility of people will affect mobility 
patterns  and  preferences  in  the  longer  term.  This  includes  whether  those  who  have  lost  jobs  and 
livelihoods in one place may seek opportunities elsewhere again. 

Net migration, EU-27, 1961-2018

Source: Eurostat   

2.6. A CHANGING POPULATION SIZE  

Europe’s  population  has  grown  consistently  over  time.  In  the  EU-27,  the  total  population  has 
grown by a quarter since 1960, up to just under 447 million in 2019. However, there are differences 
between  countries.  While  Belgium,  Ireland,  Cyprus,  Luxembourg,  Malta  and  Sweden  have  seen  a 
relatively  steady  increase,  Bulgaria,  Croatia,  Latvia,  Lithuania  and  Romania  have  seen  their 
population decline after 199019. 

The  overall  trend  of  population  growth  is  set  to  continue  –  but  not  for  long.  Since  2012,  the 
number of deaths in the EU-27 has exceeded the number of births. This means that without positive 
net migration, Europe’s population would have already started to shrink.  

19 For more information, see Eurostat’s “Statistics Explained” on population and population change statistics:  
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Population_and_population_change_statistics   

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Projections20  show  that  the  size  of  Europe’s  total  population  will  remain  rather  stable  for  the  next 
two  decades  and  then  start  declining.  It  is  projected  to  reach  a  plateau  of  about  449  million 
people  before  2025  and  then  decrease  progressively  after  2030  to  424  million  by  2070  –  a  5% 
reduction in 50 years. 

Some Member States are projected to have a declining population over the entire period until 2070, 
namely Bulgaria, Greece, Croatia, Italy, Latvia, Lithuania, Hungary, Poland and Romania. Some are 
projected  to  experience  population  growth  up  to  2070:  Denmark,  Ireland,  Cyprus,  Luxembourg, 
Malta and Sweden. Others are projected to see an initial growth followed by a decline, and these are 
Belgium,  Czechia,  Estonia,  Spain,  France,  Germany,  Netherlands,  Austria,  Portugal,  Slovenia, 
Slovakia and Finland. 

Total population and annual population change, EU-27, 1960-2070 

Source: Eurostat   

20 In April 2020, Eurostat published population projections based on 2019 data. At the time of data production, the effects of the 
COVID-19 pandemics were not known, and they are not incorporated. For more information, see Eurostat’s “Statistics Explained” 
article on population projections: https://ec.europa.eu/eurostat/web/population-demography-migration-projections/population-
projections-data.  

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3.  THE  IMPACT  OF  DEMOGRAPHIC  CHANGE  ON  OUR  SOCIAL  MARKET 

ECONOMY 

The impact of Europe’s demographic change can be felt right across our economy and society. This 
has  become  evident  in  recent  months  with  large  parts  of  the  economy  brought  to  a  standstill  and 
necessary social distancing measures affecting our everyday lives. It has implications for the future 
of our welfare  and health systems,  budgets,  housing and infrastructure needs. Our cities and urban 
areas will potentially become more crowded and rural areas will face their own set of challenges. Our 
careers will continue to change and we will have to find solutions to ensure Europe stays competitive 
in the face of a shrinking working-age population.  

A country’s economic and demographic structure will be a factor in the speed and ability to recover. 
There  will  be  other  points  where  long-term  demographic  change  and  recovery  needs  are  matched. 
This  includes  everything  from  the  need  to  make  our  healthcare  and  long-term  care  systems  more 
resilient to ensuring our urban and rural areas can cope with population density or a lack of services. 

The Commission Recovery and Resilience Facility will provide large scale financial support to make 
Member States economies more resilient and better prepared for the future, notably for demographic 
change. The investment priorities will be in line with the challenges identified in the Country 
Specific Recommendations in the European Semester.   

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3.1. PEOPLE, WORK AND SKILLS 

The impact of demographic ageing on the labour market is  becoming more pronounced.  The 
EU-27’s working-age population has been shrinking for a decade and is projected to fall by 18% by 
2070. The situation differs significantly between Member States and regions. 

Change in population aged 20-64 by region21, 2020-2030 

21 This map shows NUTS3 regions. The average NUTS3 region in a country has a population between 150,000 and 800,000 people. 
Data corresponds to the Eurostat regional projections (EUROPOP2013). 

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Economic  projections  made  in  2018  estimated  that  the  number  of  employed  people  could  peak 
around  2020,  followed  by  a  steady  decline  over  the  course  of  the  next  decades22.  While  it  is  too 
early to tell whether the current crisis will change long-term projections, the first forecasts done since 
the  start  of  the  outbreak23  estimate  significant  contractions  of  employment.  Depending  on  how  the 
virus  spreads,  this  could  result  in  even  fewer  people  being  active  at  the  same  time.  Combating 
unemployment, in particular of young people, and attracting more people to the labour markets will 
therefore become an even more pressing challenge.  

It  is  also  clear  that  the  impact  of  a  smaller  working-age  population  will be  felt  stronger  and  faster 
unless  and  until  more  people  currently  underrepresented  join  or  participate  more  in  the  labour 
market. 

Working age population (20-64), EU-27, 2001-2070 

Source: Eurostat 

3.1.1 A LARGER AND MORE INCLUSIVE LABOUR MARKET 

The shrinking working-age population underlines the need for Europe and its labour market to draw 
on all of its strengths, talents and diversity. 

Boosting  the  employment  rate  of  women  will  be  of  critical  importance.  The  employment  gap 
between  women  and  men  stood  at  12%  in  2019.  This  is  even  more  pronounced  when  taking  into 
account the significant difference in the uptake of part-time work between men and women. In 2019, 
around  three  out  of  10  employed  women  were  working  part-time,  almost  four  times  the  figure  for 
men. Such situations may have been felt even more acutely during the pandemic where the care of 

22 The 2018 Ageing Report: Economic and Budgetary Projections for the EU Member States (2016-2070), Institutional Paper 079, 
European Commission and Economic Policy Committee (2018). 
23 The Commission’s Spring 2020 Economic Forecast, 6.5.2020 

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the  elderly,  persons  with  disabilities  or  children  has  had  to  be  organised  privately  and  has  largely 
fallen  upon  women.  A  lack  of  adequate  formal  long-term  care  services,  of  flexible  working 
opportunities  and  of  incentives  for  second  earners  in  some  Member  States  all  play  a  part  in 
accentuating this issue. 

At the heart of this lies the challenge of reconciling work and family life. In 2019, the employment 
rate for women with children less than 6 years old was almost 14 percentage points lower than for 
those without children. Women still also receive lower pay for their work than men, with the gender 
pay  gap  currently  at  14.8%.  The  Commission  is  addressing  these  issues  as  part  of  its  work  on 
equality and through the new EU Gender Equality Strategy 2020 - 202524. 

Making further progress in bringing older workers into employment would also help. In 2019, 
the employment rate of older workers (aged 55-64) stood at 59.1% for the EU 27, up from 44.1% in 
2009. Making further progress would require policies that enable people to work longer, stay fitter 
and  maintain  their  skills  up-to-date,  and  recognising  new  skills  and  qualifications.  In  the  medium 
term, population ageing will likely require more people to work longer. The upcoming Green Paper 
on Ageing will focus on this issue in more depth, taking full account of the vulnerabilities that have 
emerged during the pandemic.  

Investing in the qualifications of people with low educational levels will continue to be essential. 
Over  10%  of  young  people  between  18  and  24  leave  education  or  training  with  low  or  no 
qualifications,  exceeding  20%  in  the  outermost  regions.  Among  these  “early  school-leavers”,  45% 
are in employment. The work on making the European Education Area a reality by 2025, revamping 
the European Research Area and supporting youth employment will be important tools to redress the 
balance.  

Bringing more people from different backgrounds into employment would contribute to further 
increasing  the  employment  rate.  The  employment  rate  for  people  born  outside  the  EU  is  9.6 
percentage  points  lower  than  for  those  born  within  the  EU  and  is  particularly  low  among  women. 
The situation for third-country nationals provides a similar picture.  

Opening up the labour market to people with disabilities would contribute to a fairer society and 
address the impact of demographic change. However, the employment rate of people with disabilities 
in the EU is low due to the many barriers they face, including discrimination and lack of accessibility 
in  the  work  place,  in  accommodation  and  high  quality  education.  Such  barriers  can  be  rooted  in 
negative perceptions and an unfair reluctance to hire people with disabilities. 

Having a larger and more inclusive labour market means combating all forms of discrimination, 
based  on  sex,  racial  or  ethnic  origin,  religion  or  belief,  disability,  age  or  sexual  orientation.  Social 
economy  actors  and  enterprises  can  play  an  important  role  in  fostering  a  more  inclusive  labour 
market, to the benefit of workers and local communities.   

24 A Union of Equality: Gender Equality Strategy 2020-2025, adopted on 5 March 2020 (COM(2020)152 final). 

17 

 
 
 
 
 
 
 
 
                                                           
3.1.2. PRODUCTIVITY THROUGH SKILLS AND EDUCATION 

As the pool of those working starts to shrink, economic resilience and productivity growth will 
become  all  the  more  important.  This  will  also  be  important  for  a  sustainable  recovery  from  the 
crisis.  Prior  to  the  coronavirus  outbreak,  Commission  projections  showed  that  stabilising  GDP 
growth  at  1.3%  per  year  until  2070  would  require  labour  productivity  to  grow  by  1.5%  a  year  on 
average25. However, productivity growth has been declining and was estimated at below 1% before 
the crisis started. 

The transition to a climate-neutral and digital economy can help boost productivity.  The twin 
transitions  will  require  innovation  and  technological  diffusion,  with  a  more  circular  and  digital 
economy creating new business models and ways of working. The pandemic and its consequences on 
our lives and economies have highlighted the importance of digitalisation across all areas of the EU’s 
economy and society. It will also need competition and a level playing field, as set out in the recently 
adopted New Industrial Strategy for Europe26.  

Automation  and  new,  cleaner  technologies  can  help  boost  labour  productivity  in  the  future,  a  just 
transition for all will be essential for those who will have to learn new skills or change jobs. In this 
spirit, the Commission has proposed to strengthen the Just Transition Fund  - to alleviate the socio-
economic  impacts  of  the  transition,  supporting  re-skilling,  helping  SMEs  to  create  new  economic 
opportunities, and investing in the clean energy transition.  

Europe needs a highly-skilled, well-trained and adaptable workforce27. Making lifelong learning 
a reality for all will become all the more important. In the coming years, millions of Europeans will 
have  to  upskill  or  reskill.  Better  attracting  skills  and  talent  from  abroad  will  also  help  to  address 
labour market needs.  

As the twin transitions gathers speed, Europe will need to ensure that its skills keep pace, including 
green and digital skills. Before the crisis, there were around 1 million vacancies in Europe for digital 
experts and 70% of companies reported that they werer delaying investments because they could not 
find the people with the right skills. This is because 29% of the EU population had low-level digital 
skills in 2019, whilst 15% had none at all. The crisis has further highlighted the importance of digital 
skills, for children, students, teachers, trainers and all of us to communicate and work. It has shown 
that many still do not have access to the necessary tools. The Commission will come forward with a 
Digital Education Action Plan to provide concrete actions to address these challenges. 

The solution lies in investment in people and their skills and improving access to training and 
education. This will require collective action of industry, Member States, social partners and other 
stakeholders  to  contribute  to  up-  and  reskilling  and  to  unlock  public  and  private  investment  in  the 
workforce. The update of the Skills Agenda, and the recommendation on Vocational Education and 
Training, will also be important steps to achieve this.  

25 The 2018 Ageing Report: Economic and Budgetary Projections for the EU Member States (2016-2070), Institutional Paper 079, 
European Commission and Economic Policy Committee (2018) 
26 A New Industrial Strategy for Europe, adopted on 10 March 2020 COM(2020) 102 final. 
27 See e.g. Canton, E., Thum-Thysen, A., Voigt, P. (2018) Economists’ musings on human capital investment: How efficient is public 
spending on education in EU Member States? European Economy Discussion Paper 81:  
https://ec.europa.eu/info/publications/economy-finance/economists-musings-human-capital-investment-how-efficient-public-spending-
education-eu-member-states_en  

18 

 
                                                           
3.2. HEALTH AND LONG-TERM CARE 

Europe’s healthcare and long-term care systems have been at the forefront throughout the COVID-19 
pandemic28. They have been put under severe strain in the fight against the virus and were already 
under increasing pressure, not least as a result of the ageing of our society. This particularly affects 
those regions projected to have a significant increase in over 65 year olds between now and 2030. 

Change in the share of population aged 65 and over by region29, 2020-2030 

28 https://www.ecdc.europa.eu/en/cases-2019-ncov-eueea  
29 This map shows NUTS3 regions. The average NUTS3 region in a country has a population between 150,000 and 800,000 people. 
Data corresponds to the Eurostat regional projections (EUROPOP2013). 

19 

 
 
                                                           
 
The outbreak of the Coronavirus exposed the vulnerability of older people to  pandemics and other 
diseases,  notably  because  they  are  more  likely  to  have  underlying  health  conditions.  It  has  also 
highlighted the need for robust public health systems and the need for higher capacities of intensive 
care units.  

More resilient health systems need proper investment and financial support that matches their leading 
role.  This  is  why  the  Commission  has  recently  proposed  a  standalone  EU4Health  programme  to 
support  Member  States  and  the  EU  to  build  up  capacity  and  preparedness30.  It  will  help  deliver  a 
long-term  vision  for  well-performing  and  resilient  public  health  systems,  notably  by  investing  in 
disease prevention and surveillance, and improving access to healthcare, diagnosis and treatment for 
all.  It can also  be the starting  point of a debate  about  what  more we can do together to  face up to 
crises, but also more generally in the health sector. 

The  growing  burden  of  chronic  diseases  will  also  be  a  challenge  for  Europe’s  healthcare 
systems.  These  diseases  already  account  for  an  estimated  70-80%  of  healthcare  costs.31  Currently, 
around 50 million European citizens suffer from two or more chronic conditions32, and most of these 
people are over 65. As part of efforts to step up prevention, the  Farm to Fork Strategy33 aims to 
equip Europeans with more information and support them to make better dietary choices. Given the 
higher  risks  linked  with  chronic  diseases,  the  work  on  Europe’s  Beating  Cancer  Plan  will  be 
essential for our health and that of our health systems. Sports and physical activity can also play in 
important role in health prevention and promotion. 

The demand for professional staff is expected to rise in line with the demand for health and long term 
care.  There  are  already  indications  of  labour  shortages34  in  the  health35  and  long-term  care  sector. 
On-going  work  of  the  OECD  on  the  staff  employed  in  the  long-term  care  sector36  points  to  the 
importance  of  improving  working  conditions  in  the  sector  and  making  care  work  more  attractive. 
Despite  the  rising  number  of  doctors  and  nurses  over  the  past  decade  in  nearly  all  EU  countries, 
shortages  of  general  practitioners  persist,  particularly  in  rural  and  remote  areas  and  the  outermost 
regions.  

The  main  challenge  is  meeting  a  growing  demand  for  sufficient,  accessible,  good  quality  and 
affordable  health  and  long  term  care  services  as  enshrined  in  the  European  Pillar  of  Social 
Rights. Ensuring a high level of human health protection37 requires the right infrastructure, such as 
hospitals,  long-term  care  homes  and  housing  adapted  and  equipped  for  older  people.  Contrary  to 
healthcare,  social  protection  for  long-term  care  does  not  exist  in  all  Member  States.  Formal  long-
term  care  is  expensive  and  is  often  taken  on  by  the  person  in  need  or  their  family.  As  Europe’s 
population gets older and households get smaller, this is likely to be a continued challenge for many. 

30 For more information on EU4Health, see:  https://ec.europa.eu/health/funding/eu4health_en  
31 https://data.consilium.europa.eu/doc/document/ST-12983-2013-INIT/en/pdf  
32 State of Health in the EU, Country Health Profiles 2019, SHARE survey (2017). 
33 For more information, see: https://ec.europa.eu/food/farm2fork_en  
34 These shortages can have different causes, including the level of pay and working conditions. 
35 State of Health in the EU, Health at a glance: Europe 2018, OECD/EU (2018), p. 178 and 180 
36 For more information, see: https://www.oecd.org/els/health-systems/who-cares-attracting-and-retaining-elderly-care-workers-
92c0ef68-en.htm  
37 Article 35 of the Charter of Fundamental Rights of the European Union. 

20 

 
                                                           
The  emerging  “silver-economy”  can  provide  opportunities  for  the  health  and  long-term  care 
sectors. It can be a driver of innovation to help provide high-quality care services in a more efficient 
way.  Digitalisation  can  provide  elderly  people  with  the  possibility  to  independently  monitor  their 
health condition. The impact of digital technologies in health and long term care can be a triple win: 
improved  quality  of  life,  increased  efficiency  of  health  and  long-term  care,  market  growth  and 
industry development38. Research and innovation will be crucial in this regard.  

3.3. THE IMPACT ON PUBLIC BUDGETS 

An older Europe with a smaller workforce will likely increase pressure on public budgets – at a 
time when recovery efforts require significant funding. Before the crisis, the total cost of ageing39 in 
the EU was projected to account for 26.6% of GDP by 2070.  

Europe  will  face  a  major  challenge  in  funding  its  age-related  spending,  in  a  way  that  is  also  fair 
across  generations.  This  is  because  the  ratio  between  people  paying  taxes  and  social  security 
contributions  and  those  receiving  pensions  and  other  benefits  is  decreasing  rapidly.  In  2019,  there 
were  on  average  2.9  persons  of  working-age  for  every  person  above  65.  In  2070,  this  ratio  is 
projected to fall to 1.7.  

While  most  age-related  spending  will  be  on  health  and  long-term  care,  expenditure  for  public 
pensions  is  also  projected  to  rise  relative  to  GDP  until  2040.  Thanks  to  the  impact  of  substantial 
reforms  of  pension  systems  in  most  Member  States,  it  is  subsequently  projected  to  grow  more 
slowly  than  GDP,  returning  to  about  the  same  share  of  GDP  as  in  2016,  although  in  a  number  of 
Member States recent pension reforms will lead to higher projected pension expenditure.In designing 
solutions  to  these  issues,  policy  makers  have  to  deal  with  a  high  degree  of  uncertainty.  The 
manner in which public expenditure will develop depends not only on demographic trends but also 
on  other  factors  such  as  technological  progress  in  diagnostics,  treatments,  pharmaceuticals  and 
medical  devices,  or  increased  demand  for  publicly  provided  health  and  long-term  care40.  All  these 
entail  additional costs over the medium  and long-term. Without  policy  change, increasing pressure 
will also be put on private expenditure, as people in long-term care may have to cover a higher share 
of overall costs.  

Most existing projections mostly work with the age of 65 as the upper limit of those in the group of 
working-age population. However, in the future more people will remain in employment later in life. 
Taking a higher-upper limit changes the projections significantly. However, all evidence shows the 
importance  of  good  working  conditions,  strong  public  health  systems,  life-long  learning  and 
continued investment in skills and education. 

Old-age poverty is likely to be a growing concern as demographic change continues. Today, the 
majority of retired people have an income from pensions that enables them to maintain their living 

38 The "triple win" is supported by the European Innovation Partnership on Active and Healthy Ageing. For more information, see: 
https://ec.europa.eu/eip/ageing/about-the-partnership_en  
39 In the 2018 Ageing Report, the total cost of ageing is defined as public spending on pensions, health-care, long-term care, education 
and unemployment benefits.  
40 For detailed analysis of the drivers of growth in healthcare and long-term care expenditure see: Joint Report on Healthcare and 
Long-Term Care Systems and Fiscal Sustainability, European Commission and Economic Policy Committee (EPC), 2016. 

21 

 
                                                           
standard and protects  them against old-age poverty41. This  does not  mean that old-age poverty has 
been eradicated among people above the age of 64. In 2018, in the EU-27, 15.5% of people aged 65 
or above were at risk of poverty42.   

Women are more likely to be affected by old-age poverty. This is because they tend to have lower 
employment  rates,  more  career  breaks,  lower  wages  and  they  work  more  in  part-time43  and 
temporary  work44.  Women  receive  monthly  pensions  that  are  about  one  third  lower  than  those  of 
men, while they have a longer life expectancy.  

Persons with disabilities, a group at higher risk of poverty, may face additional risks. Working 
age people with a disability are often eligible for specific benefits and support. However, when they 
reach the pension age, they may no longer be eligible, which can be an additional cause for poverty 
or social exclusion.  

At the same time, an older population also offers new opportunities for our economies. Older 
consumers account for a large part of the economy and the consumption of people above 50 across 
the EU was €3.7 trillion in 2015. It is projected to rise at around 5% per year, reaching €5.7 trillion  
by 2025. The Commission’s Green Paper on Ageing will also address how we can make the most of 
these opportunities.  

3.4. THE REGIONAL AND LOCAL DIMENSION45 

Different regions are affected differently by demographic change. Some have a relatively elderly 
population, with a median age over 50 years, while in others it is less than 42.5 years - such as in (or 
parts  of)  Luxembourg,  Cyprus,  Ireland,  southern  Spain,  Poland,  northern  Romania,  Slovakia,  and 
southern Sweden. 

At regional level, population movements also have a big impact on a region’s demographic profile. 
This is acutely felt in places where predominantly young people move. These movements also affect 
a region’s total population. 65% of the EU population lives in a region that saw population increase 
between 2011 and 2019. For some, population decline is a protracted trend, often over decades, and 
more regions can be expected to experience population decline in the next decade and beyond.  

To avoid this situation to be further exacerbated as a consequence of the pandemic, the Commission 
has  proposed  to  dedicate  additional  resources  for  cohesion  policy  for  crisis  repair  and  recovery 
measures  through  a  new  initiative  called  REACT-EU46.  The  proposed  recovery  instrument,  Next 
Generation  EU  foresees  additional  support  to  ensure  funding  for  key  crisis  repair  measures  and  to 
support  workers  and  SMEs,  health  systems  and  the  green  and  digital  transitions  in  the  regions.  In 
addition, the EU Rural Development Programme will play a crucial role in supporting the recovery. 

41 Old-age poverty has two components; people whose income is below 60% of the national median and people who cannot afford at 
least four among ten essential items (see https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Material_deprivation) 
42 For a detailed analysis of the impact of demographic change on the adequacy of pensions: The 2018 Pension Adequacy Report: 
current and future income adequacy in old age in the EU, European Commission and Social Protection Committee (SPC), 2018. 
43 In 2018, in the EU-27, 30.5% of women and 9.2 % of men worker part-time (Eurostat, LFS). 
44 The share of temporary contracts for people aged 15 – 64 has been stable in recent years. In 2018, it amounted to 12.1% of total 
employment. The share among women is slightly higher (13.1%) than for men (11.2%) (Eurostat). 
45 Regional refers to NUTS3 and local refers to LAU (local administrative units). 
46 COM(2020) 451 final, 28.5.2020 

22 

 
                                                           
Total population change by region47, 2011-2019 

47 This map shows NUTS3 regions. The average NUTS3 region in a country has a population between 150,000 and 800,000 people. 

23 

 
 
                                                           
Demographic change plays out differently in urban and rural regions. Regions in the EU belong 
to  different  categories,  depending  on  whether  they  are  more  urban  or  more  rural  in  nature,  or  in 
between. Each of the three categories has its own characteristics. The population size and density of 
settlements  decreases  from  urban,  to  intermediate  and  to  rural  regions.  During  the  pandemic, 
population density and the category of region appear to have been a factor in the spread of the virus. 
It  is  estimated  that  the  virus  arrived  earlier  in  urban  regions  and  spread  faster  as  compared  to 
intermediate and rural regions48.  

EU-27 population by urban-rural regional typology, 2019 

Source: Eurostat 

In rural regions, the population dropped by 0.8  million between 2014 and 2019. However, this 
tells  only  part  of  the  story.  In  some  Member  States  these  regions  grew  by  more  than  0.2%  a  year 
while in others they decreased by the same amount. In eight Member States, rural regions have been 
losing  population  since  1991:  the  three  Baltic  States,  Bulgaria,  Croatia,  Hungary,  Portugal  and 
Romania. Recent work by the OECD shows that regions close to cities tend to grow, while the more 
remote regions49 tend to lose population. 

Urban regions in the EU present a different picture – their population grew by 3.8 million over 
the same period. However, in Latvia and Greece it dropped by 0.3% and 0.6% respectively. 22% of 
the  urban  population  lived  in  a  region  that  lost  population  between  2014  and  2019.  In  fourteen 
Member States, all urban regions gained population.  

48 http://publications.jrc.ec.europa.eu/repository/handle/JRC120680  

49 For more information, see: https://doi.org/10.1787/b902cc00-en 

24 

40%39%21%UrbanIntermediateRural 
 
 
 
 
                                                           
3.4.1. QUALITY OF LIFE, INFRASTRUCTURE AND ACCESS TO SERVICES 

Every part of Europe seeks to provide services and infrastructure to serve the needs of its population. 
Whether  the  population  grows  or  declines,  the  services  and  infrastructure  need  to  be  adjusted 
accordingly,  whether  on  transport,  digital,  housing,  schools,  health  and  long  term  care  and  social 
integration.  

The impact of demographic change on a specific region depends very much on the pace and size of 
the population change, and whether a region has the means to cope with this change. Most regions 
that experience rapid population growth have a GDP per capita above the EU average, while regions 
with rapid population decline tend to have a comparatively low GDP per capita. Regions that have a 
low income and suffer from rapid population change face the most challenging situation. 

31 million people, or 7% of the EU population, live in a region that face the twin-challenge of rapid 
population  decline  and  low  GDP  per  head.  Many  of  these  regions  are  in  the  Baltic  States, 
Bulgaria, Croatia, Hungary, Portugal and Romania. There are also some regions in this situation in 
Greece and Spain as well as a few regions in eastern Germany, France and Poland.  

Addressing  the  impact  of  local  and  regional  demographic  change  needs  to  factor  in  what  makes 
people want to move to or leave a region. This often comes down to employment opportunities and 
the quality of life. The quality of life in a specific region can be influenced by many different factors, 
be  it  the  natural  environment,  access  to  services  (such  as  childcare,  accessibility  for  people  with  a 
disability, good quality education, healthcare, long-term-care, housing, leisure and cultural services) 
or  the  availability  and  quality  of  the  infrastructure  (such  as  roads,  rail,  energy  supply,  access  to 
internet). 

Accessibility  and  connectivity  will  become  more  important  for  a  region’s  outlook.  They 
influence a region’s economic outlook and potential to offer attractive jobs. As Europe embarks on 
its green transition, the need for clean, frequent, accessible and affordable public transport will play 
an  increasing  role  in  a  region’s  attractiveness.  As  Europe  becomes  ever-more  digital,  people  will 
expect high-quality access to next generation broadband. Next generation broadband access can help 
bridge the urban-rural divide in the digital area. 

Coverage of Broadband Next Generation Access 

Investments in infrastructure and services, also through cohesion policy, are an essential part 
of  the  solution.  Infrastructure  has  many  different  dimensions,  including  the  availability  of  digital 

25 

0%10%20%30%40%50%60%70%80%90%100%MTNLBELUIEDKLVATITCYCZESDEHUSESKSIEEHRROPTBGFIPLELLTFREU 27NGA coverage (% of households, mid-2018)TotalRuralSource: IHS and Point Topic 
 
services  (including  access  to  information  and  communication  technology  and  5G  coverage), 
education and healthcare services, as well as leisure and culture.  

Accessibility by rail by region50, 2014 

50 This map shows NUTS3 regions. The average NUTS3 region in a country has a population between 150,000 and 800,000 people.  

26 

 
 
                                                           
Regional initiatives can improve quality of life, access to services and infrastructure, and address the 
negative  impacts  of  depopulation.  For  example,  local  business  environments  can  be  improved 
through  business  support  services,  incentivising  innovation  and  research.    Community-led  local 
development can respond to citizens’ needs and improve local quality of life. A swift agreement on 
the  next  long-term  EU  budget,  and  its  recovery  instrument  Next  Generation  EU51,  will  ensure  that 
EU funds and cohesion policy programmes can play an important role in supporting this work.  

The  key  question  for  public  policies  is  how  to  develop  sustainable  solutions.  The  regional  and 
local  level  has  shown  its  ability  to  innovate  and  manage  demographic  change  in  a  smart  way. 
Drawing  on  this  experience  will  be  essential  to  share  best  practice  and  scale-up  innovative  ideas, 
products or services. 

Any policy-response to deal with challenges at a regional level has to zoom-in on the situation 
on the ground. This reflects the fact that the situation is different between and within each country, 
with a larger rural-urban divide in some areas and counter-trends elsewhere. In 2018, the share of the 
population at risk of poverty was particularly high among people living in cities in much of Western 
Europe, while in eastern and southern parts of the EU this applies to those living in rural areas.  

In cities, the use of energy, transport and land is more efficient. It is easier to organise and maintain 
public infrastructure, such as public transport or access to internet, and access to social services, for 
example  in  the  care  sector.  The  matching  of  skills  supply  and  demand  tends  to  be  easier,  which 
results  in  higher  productivity  and  income  per  head.  Cities  have  better  access  to  good  quality 
education, including more higher education institutions, which can help generate innovation52.  

On  the  other  hand,  high  population  growth  rates  in  cities  needs  to  be  well  managed  to  avoid 
further increasing congestion, pollution and housing costs53. Cities will also have to adjust their 
services in areas such as healthcare and mobility, as well as public infrastructure, housing, education 
and social policy to cater to the changing demographics. Given the strong  link between ageing and 
disability, this also includes improving accessibility, notably of products, services and infrastructure. 

Rural  areas  are  abundant  in  land,  and  enjoy  a  lower  cost  of  living  and  low  levels  of  air 
pollution. However, they also face a number of challenges, in particular in ensuring good access to 
public  and  private  services.  Rural  areas  that  are  faced  with  a  significant  population  reduction  may 
experience land abandonment and increased risk of forest fires54 and it generally becomes harder to 
attract  new investments. One cause of concern is the decreasing number of  young farmers and the 
importance of “generational renewal”.  

A  key  question  for  rural  areas  is  whether  they  are  close  to  a  city  or  far  away  from  any  functional 
urban area. Rural areas that are close to a city may have frequent interactions with that city. People 
may  work  in  the  city  but  live  outside,  commuting  every  day.  This  pattern  brings  specific 
requirements, for example for transport. There can be a specific division of tasks, for example, with 
the city offering access to hospitals, including to the people who live in the rural area nearby. 

51 For more information, see: https://ec.europa.eu/info/publications/mff-legislation_en  
52 For more information, see: https://ec.europa.eu/regional_policy/en/information/publications/regional-focus/2018/access-to-
universities-in-the-eu-a-regional-and-territorial-analysis  
53 For more information, see: https://urban.jrc.ec.europa.eu/thefutureofcities/ageing#the-chapter 
54 Forest fires — Sparking fire smart policies in the EU, European Commission (2018).  

27 

 
                                                           
On  the  other  hand,  some  rural  areas  are  not  in  the  vicinity  of  any  bigger  city.  In  this  case,  rural 
development  faces  different  challenges,  for  example,  the  preponderance  of  the  primary  sector  and 
associated value chains55 or lower population and economic growth56. Economic decline in specific 
regions  is  not  only  a  challenge  for  territorial  cohesion,  but  it  can  also  lead  to  a  geography  of 
discontent. If people start feeling left behind, they may lose faith in the fairness of our economy and 
democratic institutions.  

All of these questions and more will be addressed in a  Commission Long-term Vision for Rural 
Areas  which  will  be  presented  next  year,  following  a  wide  ranging  public  consultation  and  taking 
into account  the various aspects highlighted by the COVID-19 pandemic. 

4. 

THE TWIN TRANSITIONS AND DEMOGRAPHIC CHANGE 

Demographic  change  and  the  twin  green  and  digital  transition  will  often  affect  or  accelerate 
each other. Strategic foresight can be an important tool to identify and predict challenges that will 
affect each of these transitions and better prepare policies to address them together.  

The pressures created globally by demographic change are likely to be exacerbated by the impact of 
climate  change  and  environmental  degradation.  Business  as  usual  would  mean  a  huge  and 
simultaneous increase in the global need for food, energy and water in the next decades: 60 percent 
more food, 50 percent more energy and 40% more water by 205057.  

As  set  out  in  the  European  Green  Deal  and  the  Climate  Law58,  Europe  will  transition  to  a  climate 
neutral  and  resource  efficient  economy  over  that  same  time.  This  reinforces  the  need  for  clean 
energy, sustainable and smart mobility, a shift to a more circular economy and a big step up in the 
protection and restoration of our biodiversity. The recent lockdowns due to the COVID-19 pandemic 
have  shown  us  the  value  of  green  urban  spaces  for  our  physical  and  mental  wellbeing.  Many 
European cities have also taken steps to make active mobility, such aswalking and cycling, a safer 
and more attractive option during the pandemic. To facilitate this work, the Commission will in 2021 
set up an EU Urban Greening Platform, under a new ‘Green City Accord’ with cities and mayors. 

As cities become more crowded, urban areas will have to continue and step up their efforts towards 
urban  green  spaces,  which  can  also  act  as  carbon  sinks,  helping  to  remove  emissions  from  the 
atmosphere. The implementation of the Circular Economy Action Plan, and the EU Biodiversity 
Strategy  and  Farm  to  Fork  Strategy  as  well  as  the  upcoming  revised  EU  Strategy  for 
Adaptation to Climate Change, address many of these issues.  

Climate change and biodiversity loss are expected to significantly influence migration patterns. 
This is because changes in the environment, such as desertification, ocean acidification, and coastal 
erosion, directly impact people’s livelihoods and their capacity to survive in their places of origin’59. 
It  is  predicted  that  this  trend  will  only  continue  as  the  effects  of  climate  change  become  more 

55 OECD, 2018. Policy note Rural 3.0 – a framework for rural development.  
https://www.oecd.org/cfe/regional-policy/Rural-3.0-Policy-Note.pdf  
56 https://ec.europa.eu/regional_policy/en/information/publications/regional-focus/2008/remote-rural-regions-how-proximity-to-a-city-
influences-the-performance-of-rural-regions  
57 For more information, see: http://www.fao.org/global-perspectives-studies/en  
58 For more information, see: https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en  
59 For more information, see: https://news.un.org/en/story/2019/07/1043551  

28 

 
                                                           
pronounced. According to the World Bank, up to 143 million people in Sub-Saharan Africa, South 
Asia, and Latin America could be displaced within their own countries by 2050 if no climate action 
is  taken60. This  reinforces the need  for Europe to  be the  global leader on  climate and environment 
measures,  notably  by  implementing  the  European  Green  Deal  and  stepping  up  its  Green  Deal 
diplomacy across all of its policies and partnerships  

The digital revolution and the rapid diffusion of the Internet has already changed peoples’ lives and 
habits. Digitalisation can boost productivity and economic growth but uneven access to the internet is 
generating a digital divide that is becoming an important dimension of inequality. In addition to that, 
insufficient digital skills and strong divergence in skills levels between countries and regions and a 
lack of accessibility might aggravate this divide. 

The  current  crisis  has  underpinned  the  urgency  of  turning  this  digital  transition  into  a  reality  for 
everyone as fast  as possible:  with  social  distancing measures in  place  across Europe, many people 
have had to work from home or resort to internet or mobile applications to socialise with family and 
friends. The access to reliable and fast internet and being able to use digital tools have become all the 
more essential for businesses, workers and the self-employed.    

5.  

THE GEOPOLITICS OF DEMOGRAPHICS: EUROPE IN THE WORLD 

Demographic change also has an impact on Europe’s geopolitical outlook and position in the world. 
Population and economic size plays an important role in the world’s power structures. As Europe’s 
nations  become  smaller  and  less  economically  powerful  relative  to  other  emerging  economies,  the 
need for the European Union to use all of its collective weight becomes all the more important. At 
the same time, as we are seeing during the pandemic, a virus knows no border and creates challenges 
common for many parts of the world.  

Europe’s share of the world population is diminishing. In 1960 the population of EU-27 made up 
about  12%  of  the  world’s  population.  That  is  down  to  about  6%  today,  and  is  projected  to  fall  to 
below  4%  by  2070.  The  other  notable  development  is  the  rise  of  Africa’s  share  in  the  world’s 
population: it would rise from 9% to 32%, while the share of the population in Asia would decrease 
somewhat61. 

60 For more information, see: https://openknowledge.worldbank.org/handle/10986/29461   
61 For more information on the 2019 Revision of UN World Population Prospects, see: https://population.un.org/wpp/ 

29 

 
                                                           
 
World population by continent, 1960-2070 

Source: United Nations, Department of Economic and Social Affairs, Population Division (2019).  

Europe is not the only continent that is ageing, but it is the oldest on average. When comparing 
the trend in Europe with other parts of the world, it becomes clear that other continents go through a 
similar process  of ageing,  albeit  with  a time lag as compared to  Europe. Projections show that the 
average age in Africa will also increase over time but it is expected to stay the  youngest  continent 
between now and 2070.  

30 

 
 
Median age of the world population by continent, 1960-2070 

Source: United Nations, Department of Economic and Social Affairs, Population Division (2019). 

Europe’s  share  of  global  GDP  is  also  shrinking.  In  2004,  Europe  accounted  for  18.3%  of  the 
global GDP, shrinking to 14.3% in 201862. With a shrinking working-age population, there is a risk 
that  this  trend  will  continue,  or  even  accelerate.  Member  States  will  become  smaller  economic 
players but collectively the EU will continue to be a major economic, political and diplomatic player.  

Europe will need to be stronger, united and more strategic in the way it thinks, acts and speaks. We 
will need to strengthen existing partnerships and create new ones, notably with our closest partners 
and neighbours. The new Comprehensive Strategy with Africa63 is particularly important given the 
complementary demographic challenges our continents will face. Upholding the  rules-based  global 
order and its institutions, such as the United Nations or the World Trade Organization, and playing a 
more active role in international structures will be all the more important.  

62 Source: World Bank, GDP PPP (Purchasing Power Parity) data from database: Wold Development Indicators. 
63 JOIN(2020) 4 final, 9.3.2020 

31 

 
 
 
 
                                                           
CONCLUSIONS AND OUTLOOK 

At this time of extraordinary hardship and uncertainty, the European Union, its Member States and 
their  regions  have  a  shared  interest  in  responding  to  the  impact  of  demographic  change  for  the 
benefit of all Europeans. It is part of Europe’s recovery and of building a more resilient, sustainable 
and  fair  Union.  The  way  ahead  depends  on  a  number  of  strategic  questions,  including  how  to 
stimulate innovation and productivity; how to bring more people into employment; how to modernise 
healthcare systems, social protection and social services and how to address territorial disparities 

With this in mind, and using the findings in this report as a starting point, the Commission will put 
forward a Green Paper on Ageing and a Long-term vision for Rural Areas. The Commission will 
also  look  closely  at  other  issues  that  are  highlighted  by  this  report,  such  as  loneliness,  social 
isolation, mental health, economic resilience and long-term healthcare, among others.  

This  report  also  shows  the  need  to  embed  demographic  considerations  across  EU  policy.  The 
Commission  is  ready  to  play  its  full  part,  using  all  instruments  at  its  disposal,  notably  through  the 
next long-term EU budget and its recovery instrument Next Generation EU. Its recovery efforts will  
support social cohesion, integration and inclusion, rural development, and education and training. It 
will  support  structural  reforms  where  needed  and  work  towards  competitive  sustainability,  making 
the most of the European Semester.  

At the same time, it is clear that there is no one size fits all approach. Policymaking needs to zoom 
in  on  the  reality  on  the  ground  and  reduce  the  disparities  between  regions.  In  this  spirit,  the 
Commission  will  continue  to  promote  upward  convergence,  ensure  a  just  transition,  uphold  social 
fairness,  equal  opportunities and non-discrimination, notably through the  European Pillar of Social 
Rights and the EU Gender Equality Strategy. 

The twin challenge of democracy and demography must be tackled head-on. The demographic 
transformation  presents  challenges  and opportunities for our democracy,  some of which have been 
highlighted by the crisis. If this transformation is well-managed, it will help ensure that our systems 
of  government  and  participation  are  dynamic,  resilient,  inclusive  and  represent  the  diversity  of 
society.  We  need  to  address  the  root  causes  of  problems  and  avoid  a  "geography  of  discontent64". 
The Conference on the Future of Europe will be a key platform to listen, learn and find solutions. 

While  it  is  too  early  to  draw  substantiated  demographic  lessons  from  the  COVID-19  crisis,  the 
dedicated website launched in parallel with this Report will contribute to the analysis of large-scale 
comparable  statistical  data  across  the  Union,  once  it  becomes  available,  so  that  they  can  form  a 
reliable basis for informed policy reflections and decisions.  

On  the  basis  of  this  report,  the  Commission  will  engage  in  a  dialogue  with  relevant 
stakeholders,  in  particular  at  regional  level,  and  discuss  with  Member  States,  EU  institutions  and 
bodies, notably the European Economic and Social Committee and the Committee of the Regions.  

64 https://ec.europa.eu/regional_policy/en/information/publications/working-papers/2018/the-geography-of-eu-discontent  

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