COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Demographic change in Europe: a toolbox for action
Date: 2023-10-11
Institutions: European Commission, Secretariat-General
Subjects: competitiveness, conflict of generations, depopulation, equal treatment, labour shortage, population ageing, population forecast, population policy, population statistics, social policy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 11.10.2023  COM(2023) 577 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Demographic change in Europe: a toolbox for action  
 
 
1.  INTRODUCTION 

People across Europe live longer, healthier lives. Life expectancy has risen thanks to Europe’s 
broad-based  social  and  economic  progress  over  the  past  decades,  including  improved  living 
standards,  access  to  education  and  training,  and  advances  in  healthcare  and  medicine.  As  life 
expectancy increases, Europe needs to build a ‘longevity society’ that values the longer lifetime 
spent in older age, empowers older citizens, and nurtures the welfare and well-being of present 
and future generations alike. 

However,  demographic  change  has  a  direct  impact  on  the  EU’s  human  capital  and  its 
competitiveness.  Population  ageing  and  a  shrinking  working-age  population  are  expected  to 
exacerbate labour shortages and  increase pressure on  public budgets.  Population  ageing  is  also 
likely  to  have  a  profound  impact  on  investment,  productivity  and  entrepreneurial  activity.  In 
addition,  demographic  change  affects  the  social,  territorial,  and  inter-generational  cohesion  of 
our democratic societies as some Member States and regions are more affected than others.  

In  its  conclusions  of  June  2023,  the  European  Council  called  for  a  toolbox  to  address 
demographic  challenges  and  notably  their  impact  on  Europe’s  competitive  edge.  Citizens 
expect joint action by the EU and their national governments to manage demographic change and 
its  impacts.  Relevant  policies  should  be  guided  by  the  principles  of  gender  equality  and 
intergenerational fairness1, be grounded in local realities accounting for rural and remote regions, 
and embrace other global mega-trends, such as the green and digital transitions. The scale of the 
task calls for a coordinated whole-of-government approach involving all actors in the economy 
and society in a democratic and inclusive manner. Tackled in this way, demographic trends can 
be  managed  to  strengthen  Europe’s  resilience  overall,  as  highlighted  by  EU  citizens  in  the 
context of the Conference on the Future of Europe2. 

Demographic change is primarily determined by life choices that individuals and families 
make.  However,  EU  and  national  policies  should  help  ensure  that  people  in  Europe  can  fulfil 
their aspirations. To this end, public policies and support at the relevant level should be adjusted 
with a view to: 

i. 

ii. 

iii. 

better  reconciling  family  aspirations  and  paid  work,  notably  by  ensuring  access  to 
quality childcare and work-life balance, with a view to fostering gender equality;  
supporting  and  empowering  younger  generations  to  thrive,  develop  their  skills, 
facilitate their access to the labour market and to affordable housing;  
empowering older generations and sustaining their welfare, through reforms combined 
with appropriate labour market and workplace policies;  

iv.  where necessary,  helping to  fill labour shortages  through  managed  legal  migration  in 

full complementarity to harnessing talents from within the Union.  

1 Intergenerational  fairness  is  the  idea  of  fairness  or  justice  between  different  generations.  It  can  be  applied  to  fairness  in  dynamics  between 
children, youth, adults, and seniors, as well as between generations currently living and future generations. It relates to several fields and includes 
topics such as economic or social fairness, standards of living or climate change. 
2 Conference on the Future of Europe, Report on the Final Outcome, May 2022 (15. Proposal: Demographic transition). 

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EU  tools  -  regulatory  instruments,  policy  frameworks  and  funding  -  should  be  effectively 
combined with national and regional policies to empower and support all generations, to realise 
their life choices and their potential in the economy and society at large.  

2.  DEMOGRAPHIC CHANGE IS RESHAPING OUR 

ECONOMIES AND SOCIETIES  

In  the  coming  years,  the  shrinking  and  continued  ageing  of  the  EU  population  risks 
negatively  impacting  the  EU’s  long-term  competitiveness. Globally, the world population is 
projected  to  grow  throughout  the  21st  century  and  ageing  will  be  an  increasingly  important 
demographic  trend  worldwide.3 The  direction  and  pace  of  demographic  change  varies  across 
countries and a large share of global population growth is projected to take place in low-income 
countries.  Within  the  EU,  due  to  ageing  and  declining  birth  rates,  the  population  will  peak 
around 2026 and gradually shrink over the coming decades. The EU’s working-age population is 
projected  to  decline  (by  57.4  million  until  2100)  and  the  old-age  dependency  ratio  to  increase 
(from  33%  to  60%  by  2100). 4  As  a  result  of  these  trends,  the  EU’s  share  in  the  world’s 
population will continue to fall (from 6% today to below 4% in 20705), potentially scaling down 
the  relative  weight  of  the  Single  Market  in  the  global  economy  and  diminishing  the  EU’s 
geopolitical clout.  

ESTIMATED AND PROJECTED SHARE OF WORLD POPULATION BY 
CONTINENT, 1960-2100 (IN %) 

3 United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects 2022. 
4 Employment and Social Developments in Europe Annual Review, SWD(2023) 248 final. 
5 See  Report  on  the  impact  of  demographic  change,  COM(2020)  241  final.  The  impact  of  demographic  change  –  in  a  changing  environment, 
SWD(2023) 21 final. 

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Demographic  change  -  if  left  unaddressed  -  may  further  exacerbate  labour  shortages, 
creating  bottlenecks  in  the  economy.  Already  at  present,  labour  shortages  in  the  EU  are  at 
record  levels,  with  the  declining  working-age  population  being  one  of  several  diverse  factors. 
There  is  notably  high  demand  for  professionals  in  STEM  (science,  technology,  engineering, 
mathematics),  ICT  (information  and  communications  technology),  construction  and  care,  and 
transportation (notably  truck and  coach drivers) in  several  Member States and regions.6 As the 
‘baby boomers’ (those born between the mid-1940s to the mid-1960s) retire until the mid-2030s, 
shortages  in  both  high-  and  low-  skilled  occupations  are  projected  to  rise  considerably  in  the 
absence  of  offsetting  trends.  Labour  activation  and  wage  increases  in  occupations  particularly 
affected  may  dampen  labour  shortages.  However,  if  not  supported  by  productivity  increases, 
rising  labour  costs  may  also  impact  EU  firms’  competitiveness  vis-à-vis  competitors  in  other 
major economies.  

Demographic  change  can  create  new  opportunities  in  various  sectors,  but  also  adds  to 
certain risks of strategic dependencies. Europe’s ageing population raises the potential of the 
‘silver  economy’  to  a  projected  28.1%  of  EU  GDP  in  2025. 7  In  a  ‘longevity  society’, 
opportunities emerge in diverse sectors and areas, such as technology, health and care, medicine, 
nutrition  and  well-being,  education  and  lifelong  learning,  transport  and  financial  services,  and 
the social economy. Demographic changes are also having an impact on access to certain critical 
medicines, by raising demand for medicines tailored to age-related conditions and geriatric care, 
thus  influencing  pharmaceutical  R&D  priorities.  In  addition,  labour  shortages  may  hamper 
ambitions to increase local production.  

Demographic  change  aggravates  the  productivity  challenge.  Higher  productivity,  partly 
driven by innovation and automation (e.g. the use of robotics, artificial intelligence), as well as 
accumulating  wages  linked  to  those  developments  may  offer  a  ‘longevity  dividend’  that  helps 
counterbalance  the  decline  of  the  working-age  population.  However,  continuous  productivity 
increases may prove challenging, in particular as older generations’ lower savings rates channel 
resources  towards  consumption  rather  than  productive  investment.  Older  workers  are  also 
potentially more concerned by a need to update their skills. Moreover, population ageing reduces 
entrepreneurial  activity  as  the  older  age  cohorts  are  less  likely  to  start  a  new  business  and  the 
intergenerational transfer of business becomes more complex and less frequent. 

How do Europeans see demographic change and its consequences? 

According  to  new  survey  results  from  Eurobarometer,  7  in  10  Europeans  agree  that 
demographic 
long-term  economic  prosperity  and 
competitiveness.  

trends  put  at 

the  EU’s 

risk 

6 Employment and Social Developments in Europe Annual Review, SWD(2023) 248 final. 
7 In a ‘silver economy’, economic activity serves the needs of people aged 50 and over, for instance via products and services purchased and the 
further economic activity their spending generates. European Commission (2018), The silver economy – Final report, Publications Office of the 
European Union, Luxembourg. 

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The majority of Europeans (51%) think that managing demographic change should remain a 
political  priority, both for the EU and Member States, and a large majority – 85% – agrees 
that this requires close cooperation between all levels of government. 

Asked about policy solutions, citizens’ preferred measures addressing population ageing  are 
to ensure adequate pensions that remain affordable for future generations (49%), as well as 
providing  high-quality  and  affordable  health  care  services  (49%).  In  the  labour  market, 
citizens consider actions addressing youth unemployment as most effective (61%), followed 
by work-life balance policies (48%).8 

An ageing population puts more pressure on public budgets. The decline in the working-age 
population  exerts  downward  pressure  on  revenues  from  personal  income  taxes  and  social 
security  contributions.  Conversely,  as  the  population  grows  older,  expenditure  on  healthcare, 
long-term care and pensions is projected to rise from 24.6% of GDP in 2019 to almost 27% in 
2040.9 As a consequence, the pressure on public budgets  may reduce the fiscal  space available 
for investment in other policy priorities, such as the green and digital transitions. In addition, an 
ageing  society  needs  investment  in  adapted  mobility  and  infrastructure  solutions10 which  can 
benefit the whole population and be carried out in a green and digital-friendly manner.  

The EU’s demographic transformation interacts with other global mega-trends, such as the 
green  and  digital  transitions.  Carbon emissions are closely linked to the level of income, but 
also to the age profile of consumers. While consuming less in absolute terms, older people tend 
to  live  in  smaller  households  and  have  higher  energy  consumption  needs,  resulting  in  more 
emissions per capita. They are also more represented in rural areas where dependence on car use 

8 Flash Eurobarometer 534, Demographic change in Europe (Fieldwork: 1/9 – 14/9/2023). 
9 European Commission (2021), The 2021 Ageing Report, Economic & Budgetary Projections for the EU Member States. 
10 See Final Report of the High-Level Group the Future of Social Protection and of the Welfare State in the EU (2023). 

4 

 
 
 
 
is higher. As the share of older people in the population is increasing, it is estimated that by 2060 
up to  39% of emissions will be generated by people above 65 years of age.  At the same time, 
climate  change  and  air  pollution  have  detrimental  impacts  on  mortality  and  morbidity  of  the 
population,  particularly  affecting  more  vulnerable  groups  including  older  persons.  The  climate 
crisis and degradation of the environment can also play a role in choices whether or not to have 
children. In the context of the digital transition, technology can make health and long-term care 
more cost-effective and improve access to and quality of services, including in rural and remote 
regions and for people with a disability or reduced mobility. Yet, poor digital infrastructure and 
low levels of digital skills can exacerbate divides between regions, groups and generations. 

POPULATION DEVELOPMENTS, 2021-2050 

Territorial  disparities  are  at  risk  of  increasing  within  and between  Member  States. Some 
regions are faced with the combined challenges of population ageing, a low and stagnant share of 
people  with  tertiary  education,  and  outward  migration  of  the  young  and  educated.  This  risks 
putting  them  in  a  talent  development  trap,  limiting  their  capacity  to  build  sustainable, 
competitive and knowledge-based economies.11 As a result of demographic shifts and structural 
transformations,  many  less  developed  and  rural  regions  increasingly  face  labour  and  skills 
shortages as well as low regional competitiveness and ability to attract investment, with urban-
rural divides in some countries.12 Such territorial disparities also undermine social cohesion and 
trust in democratic institutions and processes in Europe.13  

11 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee,  and  the 
Committee of the Regions on Harnessing talent in Europe’s regions, COM(2023) 32 final.  
12 Cohesion in Europe towards 2050, 8th report on economic, social, and territorial cohesion, SWD(2022) 24 final. 
13 European Commission (2021), The Demographic Landscape of EU Territories, Publications Office of the European Union, Luxembourg. 

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3.  POLICY TOOLS: ADDRESSING AND MANAGING 

DEMOGRAPHIC CHANGE 

Policy  makers  at  all  levels  need  to  create  an  environment  that  enables  people  across  the 
Union  to  realise  their  life  choices  and  to  reconcile  family  and  professional  lives. 
Complementing  these  efforts,  legal  migration  and  the  effective  integration  of  third  country 
nationals  legally  residing  in  the  EU  can  help  alleviate  labour  market  pressures  and  provide  an 
additional boost to innovation and entrepreneurship. A comprehensive set of EU policy tools is 
already  available  to  support  Member  States  in  managing  demographic  change  and  its  impacts. 
The  ‘toolbox’  presented  in  this  Communication  builds  on  best  and  promising  practices  from 
across the Union and complements national-level action. It recognises the need to take on board 
the  territorial  dimension  of  demographic  shifts,  specifically  in  regions  that  experience  the 
phenomenon of population decline and a significant outward mobility of young workers (‘brain 
drain’).  

A COMPREHENSIVE APPROACH TO DEMOGRAPHIC CHANGE 

3.1. Reconciling family aspirations and paid work 

Everyone should be supported to be able to choose both a career and a family. The choice to 
have children is a personal one. However, quality of life, availability of care and housing, as well 
as work opportunities and adequate income may shape these choices. There is a growing trend of 
young people to postpone the decision to start a family or limit its size. Yet, when asked, many 
of  them,  particularly  highly  educated  women,  indicate  they  would  want  to  have  more  children 
than they actually do. Key elements explaining the gap between actual and desired family size 
include  the  difficulty  to  reconcile  work  and  care  responsibilities  and  persistent  gender 
inequalities, as well as economic and social insecurity linked to employment prospects, the cost 
of living and housing.  

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WOMEN’S EMPLOYMENT RATES & FERTILITY RATES IN THE EU 

1
2
0
2

,

e
t
a
r

y
t
i
l
i
t
r
e
f

l

a
t
o
T

1,9

1,8

1,7

1,6

1,5

1,4

1,3

1,2

1,1

50,

Romania

France

Ireland

Czechia

Croatia

Belgium

Slovakia

Bulgaria

Slovenia

Hungary

Latvia

Denmark

Sweden
Netherlands
Estonia

Germany

Austria

Finland

Greece

Italy

Cyprus

Luxembourg

Portugal

Spain

Poland

Malta

Lithuania

80,

Source: Eurostat

55,
65,
75,
Women's employment rate (in % of total female working-age population), 2021

60,

70,

To achieve the EU’s employment rate target for 203014, we must strive to at least halve the 
gender employment gap compared to 2019. Increasing women’s labour participation could be 
one of the most effective remedies to the negative consequences of population ageing.15 Despite 
improvements in the last decades, women’s participation in the labour market still falls short of 
that  of  men.  In  the  EU,  the  employment  rate  of  women  remains  10.7  percentage  points  below 
that  of  men  and  shows  significant  variations  across  Member  States  (ranging  from  20.1 
percentage points in Romania to 1.4 pp in Lithuania). 16 Some Member States – such as Sweden 
and  Denmark  –  manage  to  have  relatively  high  employment  rates  above  75%  among  women 
(together  with  below-average  gender  employment  gaps),  while  their  fertility  rates  also  rank 
relatively high in EU comparison. However, women in almost all Member States, including the 
ones  mentioned  above,  work  part-time  more  often  than  men,  and  the  gender  pay  gap  remains 
sizeable, in particular for women with children, with considerable differences between Member 
States.17 

Unpaid care responsibilities keep an estimated 7.7 million women in the EU from joining 
the  labour  market.  By  comparison,  only  450  000  men  are  estimated  to  be  concerned  in  this 
regard.18 The labour market participation of mothers with infants has even deteriorated over the 
past  two  decades19,  often  impacting  their  career  and  incomes  for  years.  The  intensity  of  care 
matters too: only 35% of informal carers who provide more than 40 hours of care per week are 

14 At the Porto Social Summit in 2021, the Heads of  State and Government of the EU i.a. backed the 2030 employment headline target of  the 
European Pillar of Social Rights action plan, striving to have at least 78% of the population aged 20 to 64 in employment by 2030. 
15 European Commission (2019), Demographic Scenarios for the EU: Migration, population and education. Publications Office of the European 
Union, Luxembourg. 
16 See Social Scoreboard for the European Pillar of Social Rights. 
17 In 2021, women's gross hourly earnings were on average 12.7 % below those of men in the EU; the highest gender pay gap in the  EU was 
recorded in Estonia (20.5 %) and the lowest in Luxembourg (-0.2 %). 
18 European Institute for Gender Equality (2020), Gender inequalities in care and consequences for the labour market. 
19 Employment and Social Developments in Europe Annual Review, SWD(2023) 248 final. 

7 

 
 
 
 
 
 
 
employed  (vs  71%  of  those  providing  less  than  10  hours).20 Women  remain  strongly  under-
represented in  many shortage occupations, such  as  ICT.  This  exacerbates labour shortages and 
the old-age dependency ratio, with fewer people economically active both today and tomorrow. 
Further increases in the need for care due to ageing may affect women disproportionately as the 
burden of informal care is still distributed unequally. 

Croatia in its Recovery and Resilience 
Plan aims to expand ECEC by investing 
about EUR 215 million. It aims to 
guarantee all children older than four a 
place in ECEC while also creating 
22,500 new places through investments 
in construction and renovations, thus 
reducing regional inequalities. 

Affordable,  accessible  and  good  quality 
childcare  enables  parents  to  reconcile  paid 
work  and  family  life. The EU Strategy on the 
rights  of  the  child 21  stressed  that  access  to 
inclusive,  non-segregated,  quality  education 
should  be  guaranteed.  In  2022,  only  over  one 
third of children under the age of three (35.7%) 
in  the  EU  received  formal  early  childhood 
education  and  care  (ECEC),  with  significant 
differences  within  and  between  countries,  and 
considerably 
for 
children  in  disadvantaged  situations.  Only  nine 
Member  States  have  reached  the  revised  2030 
Barcelona  target  of  45%  participation  rate  in  ECEC.  Only  in  Denmark  is  near  full-time 
childcare a reality for a majority of all children aged less than three. Expanding affordable and 
good quality care services, as for instance done significantly in the RRP of Portugal, can have a 
positive  effect  on  women’s  employment,  especially  in  countries  with  currently  low  labour 
market participation rates of women and low shares of formal care provision. Rural and remote 
regions with a low availability of care services would benefit substantially from an expansion of 
social infrastructure. In turn, accessible, affordable and good quality childcare enables parents to 
raise a family while remaining active to make an independent income and pursue their careers. 

lower  participation 

rates 

CHIDREN IN FORMAL CHILDCARE 
(% SHARE OF CHILDREN AGED LESS THAN THREE YEARS) 

20 Van der Ende, M. et al. (2021), Study on exploring the incidence and costs of informal long-term care in the EU, Publications Office of the 
European Union, Luxembourg. 
21 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee,  and  the 
Committee of the Regions, EU strategy on the rights of the child, COM(2021) 142 final. 

8 

                                                                                                                                                                                                                                                         
 
 
 
Flexible working arrangements and work-life balance policies can lighten the care burden 
for  women.  Experiences  gained  across  Member  States  shows  that  various  measures  can  have 
long-lasting effects on rebalancing the burden of care between parents, including flexible work 
patterns,  adequate  leave  rights,  in  particular  paternity  leave  and  non-transferable  well-
compensated  parental  leave,  in  combination  with  measures  raising  their  uptake.  Fathers  in  the 
EU  are  entitled  to  at  least  10  days  of  compensated  paternity  leave  and  four  months  of 
compensated parental leave, but these rights have been transposed in different ways so far. For 
instance,  Spain  and  Finland  offer  comparatively  high  durations  of  paternity  leave.22 Yet,  the 
uptake of parental leave by fathers remains generally low. Carers’ leave, as provided generously 
in  the  Netherlands  for  example,  can  also  help  those  with  caring  responsibilities  for  other 
dependent  relatives  to  stay  in  the  labour  market.  Flexible  work  arrangements  can  help  align 
working time with family responsibilities, including with part-time work balanced well between 
genders.  Capitalising  on  telework,  where  possible  and  under  the  right  conditions,  can  also 
contribute to better reconciling family with working life.  

Targeted tax and benefit reforms can make sure that work pays off. On average, a low-paid 
single  mother  who  takes  up  a  job  in  the  EU  loses  about  two-thirds  of  her  gross  employment 
earnings, due to a combination of childcare costs, withdrawn benefits and taxes.23 Well-designed 
tax-benefit  systems  ensure  that  both  individuals  and  families  are  financially  better  off  when 
taking  up  paid  work,  for  instance  by  removing  tax  disincentives  for  second  earners.  Cutting 
personal income taxation or introducing/extending income tax credits for those on low incomes 
can contribute to bringing people into paid employment, while preserving progressivity of direct 
taxation  to  safeguard  the  financing  of  social  protection  and  public  investment.  Child  benefits 
may temporarily support family formation. It is however important to ensure that their design is 
targeted and does not disincentivise the uptake of paid work by women, as for instance addressed 
by Finland’s ‘flexible care allowance’. 

Key EU-level tools: 
▪  The Work-Life Balance Directive24 introduced the right to compensated paternity leave, 
compensated parental leave, a right to carers’ leave, and a right to request flexible working 
arrangements for all working parents (of children up to at least 8 years). 

▪  Further  legal  protections  include,  notably,  the  Pregnant  Workers  Directive25 (right  to 
minimum maternity leave and protection against dismissal during leave) and the Directive 
on  equal  opportunities  and  equal  treatment  of  men  and  women  in  matters  of 
employment and occupation26 (protection against dismissal during paternity and adoption 
leave). 

22 European Commission (2022), The transposition of the Work-Life Balance Directive in EU Member States: A long way ahead, Publications 
Office of the European Union, Luxembourg. 
23 OECD (2022), Net childcare costs in EU countries, 2021. 
24 Directive  (EU)  2019/1158  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on  work-life  balance  for  parents  and  carers  and 
repealing Council Directive 2010/18/EU. 
25 Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work 
of pregnant workers and workers who have recently given birth or are breastfeeding. 
26 Directive  2006/54/EC  of  the  European  Parliament  and  of  the  Council  of  5  July  2006  on  the  implementation  of  the  principle  of  equal 
opportunities and equal treatment of men and women in matters of employment and occupation (recast). 

9 

 
 
 
▪  The  Council  Recommendation  on  early  childhood  education  and  care27 encourages 
Member States to increase participation in these services by establishing ambitious targets 
and  supports  the  delivery  of  quality,  affordable  and  accessible  services,  with  specific 
attention to the inclusion of children from disadvantaged backgrounds. 

▪  The  ‘Women  in  Digital’  Declaration  commits  Member  States  to  boost  participation  of 
women  in  the  digital  landscape,  working  with  the  public  and  private  sectors  and  civil 
society to achieve equality in tech. 

Key next steps: 

▪  The review of the Work-Life  Balance  Directive in 2027 will provide an opportunity to 

assess whether the rules still fit the evolving working practices. 

▪  In the context of its Gender Equality Strategy, the Commission will organise a Work-life 
balance  rights  campaign  to  raise  awareness  of  working  parents  and  carers  about  their 
rights and launch a call under the Citizenship, Equality, Rights and Values programme 
on  projects  aimed  at  promoting  family-friendly  working  time  arrangements  and 
recognising the value of care. 

▪  By  June  2024,  Member  States  are  expected  to  inform  the  Commission  of  the  measures 
implemented  or  planned  under  the  Council  Recommendation  on  early  childhood 
education and care to meet the 2030 targets agreed. 

3.2. Supporting and empowering younger generations to thrive 

The potential of young people in Europe is yet to be fully realised. In 2022, more than one in 
ten young people aged 15 to 29 in the EU were neither in employment nor education or training 
(NEET)28,  including  13.1 %  of  young  women,  20%  of  those  born  outside  the  EU  and  56%  of 
young Roma aged 16-24. This issue displays significant territorial disparities across the EU, with 
particularly  high  NEET  rates  found  in  southern  and  eastern  EU  regions,  as  well  as  in  the 
outermost regions of France. In some of these regions, over one quarter of all young people were 
NEET. Young people from families with disadvantaged backgrounds, such as parents with low 
education  levels,  tend  to  perform  worse  in  class  and  are  at  a  greater  risk  of  dropping  out  of 
school  early.  Being  out  of  school  and  out  of  employment  prevents  young  people  from  gaining 
experience and learning on-the-job, potentially affecting their long-term employment prospects. 
This deteriorates dependency ratios of the active, employed population relative to those outside 
of the labour force. 

27 Council Recommendation of 8 December 2022 on early childhood education and care: the Barcelona targets for 2030 (2022/C 484/01). 
28 See Social Scoreboard for the European Pillar of Social Rights. 

10 

 
 
 
YOUNG PEOPLE (AGED 15-29) NEITHER IN EMPLOYMENT  
NOR IN EDUCATION AND TRAINING, 2022 

Empowering  youth  starts  by  fostering  a  nurturing  environment  for  all  children.  Children 
must be protected, supported  and empowered. This  is  epecially  important during the formative 
years  of  a  child’s  life.  Together  with  supporting  parents’  income,  key  policy  solutions  include 
guaranteeing  access  to  inclusive,  quality  services  for  children,  in  particular  early  childhood 
education and care, basic education (including school-based activities), healthcare and nutrition. 
For  instance,  Bulgaria  invests  EUR  245  million  from  the  Recovery  and  Resilience  Facility 
(RRF)  to  modernise  teaching  tools  and  enhance  the  learning  of  STEM  in  schools  through  the 
establishment  of  a  national  and  three  regional  STEM  centres,  as  well  as  of  more  than  2  200 
STEM  laboratories  and  high-tech  classrooms.  Young  people  with  diverse  or  multiple 
vulnerabilities, such as early school leavers or youth with disabilities or health problems, should 
receive tailored support.  

Promoting  young  people’s  access  to  quality  jobs,  affordable  housing  and  decent  living 
standards is  crucial for their long-term prospects. Investments in education and training are 
essential  for  mobilising  young  people  and  equipping  them  with  basic  skills  as  well  as  future-
proof skills, such as those needed for the green and digital transitions, as done in Italy with the 
‘School  4.0’  initiative  to  transform  100,000  classrooms  into  innovative  learning  spaces.  As 
underlined in the 2023 Strategic Foresight Report, to manage demographic change, the EU needs 
robust tools for granular forecasting of skills and workforce needs in key sectors. In addition, to 
smooth school-to-work transitions, an important role is played by outreach to youth, as done for 
instance by Slovenia with its local youth ‘ambassadors’ who inform their peers about possibilites 
under the Youth Guarantee, as well as quality traineeships and vocational education and training, 
including  apprenticeships.  Temporary  learning  mobility  across  regions  and  countries  can 
enhance  opportunities  for  young  people.  In  addition  to  improving  labour  market  integration, 
access to basic services (including to mental health services) and to affordable, energy-efficient 
housing determines the possibilities for young people to start a family. In Hungary, the Family 
Housing  Subsidy  is  a  non-refundable  state  subsidy  for  families  raising  at  least  one  child, 
including  same  sex  partnership  couples,  for  buying  or  enlarging  a  flat  or  house.  Families  in 
smaller settlements are eligible for the Rural Family Housing Subsidy, to retain the population of 
rural areas. Regions in a ‘talent development trap’ (or at risk thereof) need targeted, place-based 
support for  economic  revitalisation, educational  opportunities and  better  access  to  services and 
housing. 

11 

                                     
 
Key EU-level tools: 

▪  In  the  context  of  the  EU  Strategy  on  the  Rights  of  the  Child,  the  European  Child 
Guarantee29 aims to address social exclusion by guaranteeing children in need effective 
access to key services, including free early childhood education and care.  

▪  The  European  Education  Area  sets  seven  targets  for  2025  and  203030,  including  on 

ECEC participation, early school leaving, and underperformance of students. 

▪  The  Youth  Employment  Support  package 31  reinforces  the  Youth  Guarantee 32 , 
improving  the  labour  market  integration  of  young  people,  including  by  strengthening 
skills for the digital and green transitions. 

▪  The Council  Recommendation  on  vocational  education  and  training  (VET)  aims at 
modernising  VET  and  giving  a  renewed  impetus  for  apprenticeships  and  the  European 
Framework for Quality and Effective Apprenticeships. 

▪  The ALMA (Aim, Learn, Master, Achieve) initiative is a cross-border youth mobility 

scheme to support young people and NEETs in integrating into the job market. 

▪  The Digital Europe Programme supports specialised education programmes in the area 
of  advanced  digital  skills  as  well  as  the  build-up  of  digital  skills  for  young  people, 
particularly girls, for example through the EU Code Week. 

▪  The  Sustainable  and  Smart  Mobility  Strategy  supports  the  development  of  smart 
mobility solutions that help prevent depopulation and allow young people to have access 
to basic services (health, education) and work opportunities. 

▪  The Renovation  Wave  Strategy33 aims to double the annual energy renovation rates in 
the  next  10  years.  The  Affordable  Housing  Initiative  aims  to  improve  access  to 
affordable housing through local projects’ access to technical and innovation capacity. 

▪  The Talent  Booster  Mechanism supports EU regions to train, retain and attract people 

and to address the impact of the demographic transition.  

▪  The EU-OECD/INFE  Financial  Competence  Framework for  children  and  youth in 
the European Union aims to help improve their financial literacy to allow them to take 
decisions around money that are in their best interest, including later on in life.  

Key next steps: 

▪  In  early  2024,  the  Commission  will  update  the Quality  Framework  for  Traineeships, 
which  supports  the  transition  of  young  people  from  education  and  unemployment  into 
employment through quality traineeships. 

▪  Under  the  European  Child  Guarantee,  24  Member  States  have  submitted  national 

29 Council Recommendation (EU) 2021/1004 of 14 June 2021 establishing a European Child Guarantee. 
30 For  more  information,  see  the  Council  Resolution  on  a  strategic  framework  for  European  cooperation  in education  and training towards  the 
European Education Area and beyond (2021-2030), 2021/C 66/01. 
31 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions, Youth Employment Support: a Bridge to Jobs for the Next Generation, COM(2020) 276 final. 
32  Council  Recommendation  of  30  October  2020  on  A  Bridge  to  Jobs  –  Reinforcing  the  Youth  Guarantee  and  replacing  the  Council 
Recommendation of 22 April 2013 on establishing a Youth Guarantee (2020/C 372/01). 
33 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions, A Renovation Wave for Europe – greening our buildings, creating jobs, improving lives, COM(2020) 662 final). 

12 

 
 
 
action plans. Member States  will  report on  their  implementation  progress every 2 years 
(starting in March 2024) and the Commission will review overall progress in 2026.  

▪  In  2023,  the  European  Education  Area  is  undergoing  a  mid-term  review  reflection 
process to support implementation. In 2025, the Commission will publish a final report on 
the EEA. 

▪  The Commission monitors progress towards the 2025 targets set in the European Skills 

Agenda. 

▪  Recent  Commission  proposals  for  Council  Recommendations,  if  agreed  by  Member 
States, will support national authorities and the education and training sector in providing 
high-quality,  inclusive  and  accessible  digital  education  and  training  to  develop  the 
digital skills of European citizens. 

3.3. Empowering older generations and sustaining their welfare 

In an ageing society, it is crucial to empower older workers to remain active for longer. The 
average employment rate of workers between 55 and 64 years of age has increased from 45% in 
2011  to  60.5%  in  2021.  However,  disparities  between  Member  States  in  this  area  remain 
considerable, indicating that there is still room for improvement. Longer working lives can allow 
people  to  update  skills  on  the  job  and  remain  active,  helping  employers  to  retain  staff,  while 
promoting  knowledge  transfers  in  multi-generational  workforces.  More  flexible  working  time 
arrangements  support  the  retention  of  older  workers,  for  instance  with  flexible  or  reduced 
working hours, and enable people to remain longer in employment if they choose to. A workers’ 
right to request flexible work (as granted e.g. in Belgium, France, Germany, Netherlands) can 
contribute to a cultural change towards more inclusive working practices and workplaces. 

EMPLOYMENT RATES BY AGE GROUP (%) 

13 

                                                                           
 
 
 
Businesses  and  workers  need  to  work  together  to  adapt  work  practices  and  to  change 
preconceived notions and stereotypes about generations. Respect for older citizens and their 
well-being  is  a  cornerstone  of  a  thriving  ‘longevity  society’  at  large.  The  Union  of  Equality 
strategies adopted by the Commission in 2020 and 202134 stress the need to combat stereotypes, 
fight age-based discrimination within their respective remit, to promote diversity and inclusion in 
the  workplace,  and  give  everyone  equal  chances  to  contribute  and  thrive.  The  potential  of 
technology  to  create  a  workspace  adapted  to  changing  needs  over  the  lifetime  should  be  fully 
exploited  (e.g.  increased  availability  of  ergonomic  workstations,  use  of  so-called  ‘cobots’  or 
hybrid man-machine assembly systems to reduce the risk of strain injuries).  

Population  ageing  will  increase  demand  for  financial  lifecyle  planning.  Enhanced 
participation  in  supplementary  occupational  and  personal  pension  schemes  can  complement 
retirement incomes, including through structures aimed at increasing enrolment in occupational 
pension schemes or the pan-European private pension product.35 Achieving better outcomes for 
citizens who invest to prepare future events (such as retirement, children education or access to 
housing)  is  a  key  objective  of  the  Capital  Markets  Union. 36 The  cross-border  integration  of 
financial  services  can  also  enhance  the  supply  of  relevant  financial  instruments,  such  as 
insurance for long-term care. Better financial education can empower citizens in this regard. In 
parallel, efforts to promote inclusive access to payments and banking services can ensure that no 
one is left behind, in particular older people.  

Health  promotion  and  disease  prevention  are  key  enablers  for  healthy  longevity.  As  life 
expectancy increases, the burden of non-communicable diseases is growing, including for cancer 
which disproportionally affects older people. This requires improved availability of and access to 
disease  prevention  services,  diagnosis  and  treatment  of  non-communicable  diseases.  Healthy 
lifestyle  requires  an  overarching  person-centred  approach  to  care  and  support  services,  which 
promotes  a  shift  from  treatment  to  health  promotion  and  disease  prevention;  integration  and 
coordination  of  services  along  the  continuum  of  care,  autonomy  and  independent  living;  and 
fostering, for all generations, an active and healthy lifestyle combined with good mental health 
and wellbeing, which can include community services and volunteering activities. For instance, 
in Romania with the help of the RRF, the development of the eHealth and telemedicine system 
helps  improve  access  to  a  broad  range  of  health  care  services,  in  particular  in  rural  areas  and 
small towns. 

Health  care  and  long-term  care  must  be  strengthened  and  become  more  cost-effective, 
while mitigating old-age poverty, which particularly affects women. In particular, affordable 
and high-quality care services can reduce caring responsibilities on the approximately 53 million 
informal carers in the EU, of whom only 65% work full-time. Investing in care is important to 
attract and retain talent in the sector. Formal carers must benefit from better wages and working 
conditions  and  adequate  training  and  the  relevant  professions  must  become  more  attractive,  as 

34 Gender  Equality  Strategy  2020-2025;  LGBTIQ  Equality  Strategy  2020-2025;  EU  Roma  Strategic  Framework  2020-2030;  EU  Anti-racism 
Action Plan 2020-2025; Strategy for the rights of persons with disabilities 2021-2030. 
35 See also Final Report of the High-Level Group of Experts on Pensions (2019). 
36 Proposal  for  a  Directive  of the  European  Parliament  and  of  the Council amending  Directives  (EU)  2009/65/EC, 2009/138/EC, 2011/61/EU, 
2014/65/EU and (EU) 2016/97 as regards the Union retail investor protection rules and Proposal for a Regulation of the European Parliament and 
of the Council amending Regulation (EU) No 1286/2014 as regards the modernisation of the key information document, COM(2023) 279 final. 

14 

 
 
 
for instance reflected in  France’s roadmap to  support the ageing  of French citizens at  home.37 
The healthcare workforce is also subject to imbalances linked to the ageing of workers, lack of 
replacement from  medical  schools and strong international  competition for doctors  and nurses. 
These  imbalances  are  exacerbated  at  territorial  level  given  the  necessity  to  rationalise  the 
provision of health services in regions with declining population. Provided that the users, as well 
as health and care professionals have the relevant digital skills, digital technologies can facilitate 
cost-effective and better-quality services, through digital health tools and assistive technologies. 
In  addition,  they  can  facilitate  social  contact  to  reduce  loneliness,  which  also  affects  mental 
health.  

To  ensure  adequate  and  sustainable  pensions, 
pension  reforms  need  to  be  accompanied  by 
supporting  labour  market  policies.  Many  Member 
States have implemented pension reforms  in  the past 
two  decades,  raising  the  statutory  pension  age  and 
adjusting  conditions.  Some  Member  States  are  still 
lagging  behind 38 ,  however,  and  pension  reforms 
require  accompanying  measures  to  bear  fruit.  These 
include  labour  market  reforms  to  provide  tailored 
learning  opportunities, 
assistance  and 
incentivise 
and  offer 
job 
employment  subsidies  for  older  workers,  as  used  in 
Austria’s targeted ‘Employment Initiative 50+’. Such active labour market policies are essential 
for helping the long-term unemployed remain in the labour force while respecting their diverse 
needs. Older people who want to work beyond the retirement age should be supported to do so. 
Policy  adjustments  should  provide  for  attractive  options  to  postpone  retirement  and  remove 
earning limits and other obstacles. 

Italy’s Employability Guarantee 
for Workers aims to help people 
integrate into the labour market, 
with a particular focus on women, 
long-term unemployed, workers 
with disabilities, young people as 
well as older workers. A budget of 
EUR 4.4 billion from 
NextGeneration EU is allocated to 
the Initiative.  

lifelong 
search  behaviour, 

Fiscal sustainability and adequacy can be enhanced by improving the composition of public 
finances  and  the  revenue  base  of  social  protection  systems.  While  revenues  generated  by 
labour  income 39 will  continue  to  play  a  role  in  financing  the  welfare  state,  a  more  holistic 
reflection  is  needed  on  the  optimal  tax  mix  in  view  of  demographic  trends,  including  by 
assessing the scope for enhanced capital taxation to compensate for a decreasing share of labour 
taxes. In addition, the composition of public finances can be made more growth-, employment- 
and  environment-friendly  by  shifting  the  tax  burden  away  from  labour40 towards  energy  and 
environmental  taxation.  Since  2022,  the  Commission  organises  an  annual  Tax  Symposium 
gathering policy makers, academics, businesses and civil society to reflect on how to adapt our 
tax  mix  in  view  of  2050.  Finally,  cutting  low-priority  or  ineffective  expenditure  can  help 
prioritise and improve the efficiency of public budgets. 

37 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions on the European Care Strategy, COM(2022) 440 final. 
38 In 2023, 5 Member States received Country-Specific Recommendations concerning the long-term sustainability of their pension systems and 
active ageing (Czechia, Germany, Ireland, Luxembourg, Poland). 
39 Labour taxes accounted for 51.4% of total tax revenues in the EU in 2021. 
40 In particular by reducing the tax wedge for lower- and middle-income earners, in order to incentivize paid work. 

15 

 
 
 
Key EU-level tools: 
▪  The  EU  Framework  Directive  on  occupational  safety  and  health 41 aims  to  ensure 

people’s safety and health at work. 

▪  The  Employment  Equality  Directive 42  protects  against  age-based  discrimination  at 

work.  

▪  The Council  Recommendation  on  the  integration  of  the  long-term  unemployed into 
the labour market43 offers policy guidance for activation measures at the national level. 

▪  Under  the  European  Care  Strategy,  the  Council  Recommendation  on  access  to 
affordable  and  high-quality  long-term  care44 provides  guidance  to  Member  States  to 
strengthen the adequacy, availability and quality of long-term care for all who need it and 
to improve working conditions of carers. 

▪  The  Council  Recommendation  on  adequate  minimum  income  ensuring  active 
inclusion45 helps  Member  States  reform  their  social  safety  nets  by  promoting  adequate 
income support, coverage and uptake, access to services, and labour market integration. 
▪  The European Accessibility Act46 makes key products and services more accessible for 
older  people  and  people  with  disabilities,  including  e-services  and  certain  elements  of 
transport services. 

▪  The  ‘Healthier  Together’  initiative  supports  EU  countries  in  reducing  the  burden  of 
major diseases and improving the citizens’ health and well-being, contributing to healthy 
ageing.  

▪  The comprehensive approach on mental health puts forward 20 flagship initiatives and 
identifies  EUR  1.23  billion  of  EU  support  to  activities  promoting  good  mental  health 
across generations, focusing on vulnerable groups. 

▪  Europe’s Beating Cancer Plan supports, coordinates and complements Member States’ 
actions to reduce the burden of cancer across the entire disease pathway, including with 
the Council Recommendation on a new EU approach to cancer screening.47 

▪  The Pan-European  Personal  Pension  Product  is a voluntary personal pension scheme 
to be offered by financial institutions to offer citizens a new option to save for retirement.  

▪  The EU-OECD/INFE Financial Competence Framework for adults in the European 
Union  promotes  adults’  financial  skills  by  supporting  inter  alia  financial  literacy 
programmes and good practice exchanges. 

▪  The  consumer  footprint  calculator 48 allows  citizens  to  estimate  their  environmental 

footprint and offers tips to shift behaviour towards more sustainable patterns. 

41 Council Directive 89/391/EEC of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers 
at work. 
42 Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation. 
43 Council Recommendation of 15 February 2016 on the integration of the long-term unemployed into the labour market (2016/C 67/01). 
44 Council Recommendation of 8 December 2022 on access to affordable high-quality long-term care (2022/C 476/01). 
45 Council Recommendation of 30 January 2023 on adequate minimum income ensuring active inclusion (2023/C 41/01). 
46 Directive (EU) 2019/882 of 17 April 2019 on the accessibility requirements for products and services. 
47 Council Recommendation of 9 December 2022 on strengthening prevention through early detection: A new EU approach on cancer screening 
replacing Council Recommendation (2022/C 473/01). 
48 https://knowsdgs.jrc.ec.europa.eu/cfc  

16 

 
 
 
Key next steps:  

▪  The  Commission  calls  on  the  co-legislators  to  work  towards  a  swift  agreement  on  its 

proposals for standards for equality bodies.49  

▪  The  High-level  group  on  non-discrimination,  equality  and  diversity  promotes 
exchanges of practices on age equality and combating ageism, and will publish an output 
paper in spring 2024. 

▪  By  June  2024,  Member  States  are  recommended  to  inform  the  Commission  of  the 
measures  implemented  or  planned  under  the  Council  Recommendation  on  access  to 
affordable and high-quality long-term care, complementing continuous monitoring and 
support for national reforms. 

▪  The 2024 Access City Award winners will be announced during the conference marking 

the International Day of Persons with Disabilities in December 2023.  

▪  In  2024,  the  Commission  will  publish  the  Pension  Adequacy  Report  (jointly  with  the 
Social Protection Committee) and the Ageing Report (jointly with the Ageing Group). 

▪  By December 2025, Member States are recommended to report on the implementation of 

the Council Recommendation on a new EU approach to cancer screening. 

3.4. Labour shortages and managed legal migration 

In 2022, labour shortages were at a historical high in the EU. While the employment rate in 
the EU reached a new record high, about 30% of all firms reported labour shortages50 and 74% 
of SMEs  report they  face a lack of skilled  workers.51 Labour shortages  exist in  various sectors 
and occupations across all skills levels and are set to increase. Although activation of people of 
working age, in particular women, young and older people, reducing skills shortages, improving 
working  conditions  in  certain  sectors,  and  intra-EU  mobility  are  vital  for  mitigating  labour 
shortages,  it  will  not  suffice  to  meet  needs  in  all  shortage  occupations.52 Legal  migration  from 
non-EU  countries  can  also  help  employers  fill  vacancies  in  all  skills  levels,  for  instance  for 
occupations  with  a  critical  role  for  the  EU  economy  and  its  green  and  digital  transition  in  the 
context of the Green Deal Industrial Plan. Given the size of its labour market, labour migration to 
the EU remains low in international comparison.53  

49 Proposal for a Council Directive on standards for equality bodies in the field of equal treatment between persons irrespective of their racial or 
ethnic origin, equal treatment in the field of employment and occupation between persons irrespective of their religion or belief, disability, age or 
sexual orientation, equal treatment between women and men in matters of social security and in the access to and supply of goods and services, 
and deleting Article 13 of Directive 2000/43/EC and Article 12 of Directive 2004/113/EC, COM/2022/689 final; and Proposal for a Directive of 
the  European  Parliament  and  of  the  Council  on  standards  for  equality  bodies  in  the  field  of  equal  treatment  and  equal  opportunities  between 
women  and  men  in  matters  of  employment  and  occupation,  and  deleting  Article  20  of  Directive  2006/54/EC  and  Article  11  of  Directive 
2010/41/EU, COM(2022) 688 final. 
50 Business and Consumer Survey (BCS), European Commission. 
51 Flash Eurobarometer 529 (2023). 
52 European Commission (2023), Annual Report on Intra-EU Labour Mobility 2022, Publications Office of the European Union, Luxembourg. 
53 For instance, relative to Australia, Canada, and the United States. OECD (2019), Building an EU Talent Pool: A New Approach to Migration 
Management for Europe, OECD Publishing, Paris. 

17 

 
 
 
SMEs FACING SKILLS SHORTAGES (%) 

Enhanced legal migration pathways to the EU can help fill vacancies while also benefitting 
origin  countries.  The  need  to  make  Europe  a  more  attractive  destination  for  talent  from  third 
countries is a consistent call from EU industry. This calls both for proactive steps to help match 
employers and employees. This is recognised by several Member States, as demonstrated by the 
increasing number of work permits issued to non-EU nationals for employment purposes.54 The 
EU  strives  to  support  countries  of  origin  with  Talent  partnerships  in  strengthening  their 
economic  base  and  human  capital.  Attracting  talent 
globally  requires  targeted  labour  migration  initiatives  to 
address shortages that cannot be met through the domestic 
workforce  while  factoring  in  the  aspirations  of  the  third 
country  nationals 
the  priorities  of 
themselves  and 
countries  of  origin.  The  Talent  Partnerships  between  the 
EU  and  third  countries  combine  direct  support  for 
mobility  schemes  for  work  or  training  with  capacity 
building  and  investment  in  human  capital55 to  ensure  an 
equal  win for Member States, partner  countries,  business 
communities  on  both  sides  and  the  benefitting  individuals.  According  to  the  OECD,  only  four 
EU  Member  States56 feature  in  the  top  10  countries  most  able  to  attract  highly  educated  talent 
and  entrepreneurs  from  abroad,  including  Sweden  with  its  favourable  visa  conditions  for 
entrepreneurs  as  well  as  its  inclusive,  family-friendly  environment. 57  Policies  also  need  to 
facilitate  the  successful  integration  of  third  country  nationals  into  European  societies,  ,with 
integration and the respect for the EU’s core values and principles are both a right and a duty. 

Sweden attracts and retains 
international talent through a 
new residence permit for 
highly skilled third-country 
nationals and reinforced 
control measures to tackle 
abuse of migration routes. 

Job matching and navigating legal migration pathways is often cumbersome and costly for 
both  migrants  and  employers.  Labour  market  access  should  be  facilitated  by  assuring  legal 
migrants  of  fair  working  conditions,  through  swift  recognition  of  foreign  qualifications  and 
support to overcome administrative and language barriers. For instance, Czechia has established 
a dedicated IT tool for the assessment of labour needs that could be filled through migration and 

54 In 2022, an estimated 1.6 million residence permits were issued for employment-related reasons. 
55 Including skills development, vocational education and training and operationalisation of work-based exchange schemes. 
56 Netherlands, Sweden, Luxembourg, Denmark. 
57 OECD Indicators of Talent Attractiveness. 

18 

SMEs FACING SKILLS SHORTAGES (%) Base: all SMEs (n=12 909)  
 
 
 
Greece has a user-friendly online platform to better match supply and demand for skills. A more 
coordinated approach to matching the needs of employers looking for workers in the EU and of 
those  looking  for  jobs  should  be  fostered.  Migrants  are  often  in  jobs  that  do  not  match  their 
skills, with almost 40% of them being overqualified for the jobs they are in (compared to 20% of 
EU  citizens).  Non-EU  citizens  and  people  from  migrant  backgrounds  also  often  suffer  from 
discrimination, poor working conditions and can lack relevant language skills. As a result, non-
EU citizens have a lower employment rate than nationals or other EU citizens in Member States, 
including among youth.58 This further justifies the need for well organised and orderly channels 
for labour migration to the EU. 

Key EU-level tools: 
▪  The revised EU Blue Card Directive59, which will apply as from 19 November 2023, will 

facilitate the recruitment of highly qualified workers in the EU.  

▪  The Single Permit Directive60 establishes one single permit for both the right to work and 
provides  for  a  set  of  rights  for  third-country  workers  while  the  Long-Term  Residents 
Directive 61  sets  out  the  rules  for  acquiring  the  EU  long-term  resident  status.  Both 
Directives  are  under  revision  with  the  view  to  streamline  and  facilitate  the  integration  of 
third country nationals and strengthen their rights.  

▪  Talent  Partnerships  with  selected  third  countries  (currently  Morocco,  Tunisia,  Egypt, 
Bangladesh,  Pakistan 62 )  enhance  legal  pathways  for  international  labour  mobility  and 
develop  talent  in  a  mutually  beneficial  way,  which  respects  possible  concerns  of  partner 
countries. 

▪  The Action Plan on Integration and Inclusion 2021-202763 proposes support to Member 
States  through actions including  to  improve employment opportunities and recognition of 
qualifications of migrants or developing inclusive education and training.  

▪  Free  Trade  Agreements  with  third  countries,  including  those  under  negotiation  with 
Australia,  Indonesia,  India  and  Thailand,  should  include  provisions  to  support  the 
movement of skilled professionals. 

Key next steps: 

▪  The  Commission  will  put  forward  a  package  on  Talent  Mobility  in  November  2023, 
including a proposal for an EU Talent Pool as an IT platform to facilitate labour matching 
between  EU  employers  and 
third  countries,  a  Commission 
Recommendation  on  the  recognition  of  qualifications  of  third  country  nationals,  and  a 
proposal for a Council Recommendation on a learning mobility framework. 

jobseekers 

from 

58 European Migration Network (2019), Report on Labour market integration of third country nationals in EU member states. 
59 Directive (EU) 2021/1883 of the European Parliament and of the Council of 20 October 2021 on the conditions of entry and residence of third-
country nationals for the purpose of highly qualified employment, and repealing Council Directive 2009/50/EC. 
60 Directive  2011/98/EU  of  the  European  Parliament  and  of  the  Council  of  13  December  2011  on  a  single  application  procedure  for  a  single 
permit for third-country nationals to reside and work in the territory of a Member State and on a common set of rights for third-country workers 
legally residing in a Member State. 
61 Council Directive 2003/109/EC of 25 November 2003 concerning the status of third-country nationals who are long-term residents. 
62 Talent Partnerships are also being discussed with Nigeria and Senegal.  
63 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions, Action plan on Integration and Inclusion 2021-2027, COM(2020) 758 final. 

19 

 
 
 
 
▪  Through the Labour Migration Platform, Member States and the Commission will further 
strengthen  cooperation  on  facilitating  migration  so  that  regional  labour  shortages  in  all 
Member States can be filled.  

4.  IMPLEMENTING THE DEMOGRAPHY TOOLBOX  

The  demography  toolbox  can  help  mobilise  policies  at  EU  and  national  levels.  The 
Commission calls on Member States to put in place and implement integrated policies addressing 
demographic  change  and  mainstream  demography  concerns  across  all  policies.  Member  States 
are  encouraged  to  make  use  of  the  available  tools  at  EU  level  in  combination  with  national 
policies.  Through  the  European  Semester  process,  Member  States  received  country-specific 
recommendations  on  relevant  areas  such  as  pensions,  healthcare  and  long-term  care  (including 
their adequacy and  sustainability),  childcare,  taxation,  social housing,  skills, adult learning  and 
employment policies. Actions addressing demographic change and its impacts also contribute to 
broader societal progress in line with the Sustainable Development Goals. 

Gender equality, non-discrimination and intergenerational fairness must be at the heart of 
policy choices. It is imperative that the chosen policy mixes at all times safeguard and contribute 
to gender equality and equal opportunities, notably by enhancing women’s effective access to the 
labour  market  and  enabling  people  in  Europe  to  make  their  personal  aspirations  and  choices  a 
reality. In this respect, the broad formal provision for affordable, high-quality childcare and long-
term care is a key policy solution. At the same time, 
policy  solutions  that  mutually  benefit  several  or  all 
generations  are  being  implemented  and  should  be 
supported  across  various  policy  areas  such  as 
education  and 
intergenerational 
jointly  build 
learning  fostering  knowledge  and 
skills), housing and care (e.g. intergenerational living 
and  community-based  care,  including  adult  day 
(e.g. 
services) 
multigenerational  workforces  which  accommodate 
diverse needs and invest in two-way knowledge and 
skills transfers between generations). 

Since 2006, Germany set up more 
than 540 multi-generational 
houses as ‘central meeting places’ 
to promote social cohesion 
between generations. These centres 
support their surrounding 
communities in addressing 
challenges of demographic change 
at the local level. 

the  workplace 

training 

(e.g. 

and 

in 

Member  States’  policies  to  address  demographic  change  should  be  grounded  in  the  local 
realities. As the challenges differ between Member States and regions, policy responses should 
be designed and implemented as a concerted effort with the active involvement of regional and 
local authorities. Public employment services, social partners and civil society organisations also 
have a role to play. The Commission stands ready to support the Member States in this exercise, 
including  by  facilitating  mutual  learning  and  the  exchange  of  best  practices  at  all  levels,  for 
instance  in  the  framework  of  the  Talent  Booster  Mechanism  which  supports  EU  regions  in 
addressing  the  impact  of  the  demographic  transition.  The  Commission  will  also  pay  particular 
attention  to  the  specific  challenges  linked  to  the  demography  of  rural  areas  in  its  forthcoming 

20 

 
 
report on the implementation of the long-term vision for rural areas, scheduled for publication in 
early 2024. 

DEMOGRAPHY TOOLBOX:  
KEY EU-LEVEL TOOLS AVAILABLE TO MEMBER STATES 

Digital  technologies  can  boost  Europe’s  competitive  edge  and  help  offset  the  impacts  of 
demographic change. Artificial intelligence and automation are already reshaping the economy 
and  labour  markets  in  Europe.  If  well  designed  and  implemented,  policy  action  promoting 
innovation and the scaled-up application of technologies can contribute to offsetting the impacts 
of  demographic  change  on  productivity  and  fiscal  sustainability.  Technology  can  also  make 
health  and  long-term  care  more  cost-effective  and  improve  access  to  and  quality  in  this  area, 
including in rural and remote regions, for older people and for people with disabilities or reduced 
mobility.  In  addition,  digital  tools  can  contribute  to  the  well-being  of  an  aging  population, 
promoting healthier and more active lives. They can also facilitate social engagement, mitigating 
social  isolation  among  older  individuals,  especially  when  digital  tools  are  used  as  a  means  of 
facilitating real interpersonal interactions. 

On  top  of  the  regulatory  instruments  and  policy  frameworks  listed  above,  a  range  of 
financing  instruments  are  available  at  the  EU  level  to  support  Member  States.  The 
Recovery  and  Resilience  Facility  stimulates  reforms  and  investments  across  the  four  pillars  of 

21 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
 
 
the  Toolbox,  notably  with  around  EUR  8  billion  channeled  towards  early  childhood  education 
and  care64,  about  EUR  43.2  billion  towards  education65,  around  EUR  41.7  billion  towards  up-
skilling and re-skilling66, around EUR 48.2 billion supporting health care and long-term care67, 
and  around  EUR  15.1  billion  for  social  housing  and  social  infrastructure68.  In  the  partnership 
agreements 2021-2027, 26 Member States have identified demography as a major challenge for 
their territories  to be addressed with the support of Cohesion Policy funds. The European Social 
Fund Plus (ESF+),  the EU’s  main instrument  to  invest  in  people, steers together with  Member 
States  almost  EUR  7  billion  to  promote  a  gender-balanced  world  of  work,  equal  working 
conditions and a better work-life balance, and EUR 427 million to support workers’ active and 
healthy  ageing.  The  upcoming  mid-term  review  of  Cohesion  policy  programmes 69 ,  to  be 
finalised  by  mid-2025  and  steered  by  the  country-specific  recommendations  adopted  in  2024, 
will provide an opportunity to assess the situation of these regions and, where appropriate, align 
the  programming  of  Cohesion  Policy  funds.  In  addition,  Horizon  Europe  funds  research  to 
reduce  skills  shortages  and  mismatches  with  EUR  43  million,  as  well  as  to  address  the  socio-
economic impacts of demographic change with EUR 27 million. 

Effectively  managing  demographic  change  requires  comprehensive,  high-quality  and 
granular  data  and  capacity  at  EU  and  national  levels  to  gather  and  assess  data  and 
expertise  in  order  to  provide  analysis  and  guidance  on  the  appropriate  solutions. 
Coordinating  efforts  is  also  key.  At  the  national  level,  Member  States  have  conducted  or  are 
launching assessments of demographic change and its impacts, for instance in the Netherlands 
through the new ‘State Committee on Demographic Developments 2050’. Complementing these 
activities,  the  European  statistics  on  population  and  migration  and  the  EU-level  ‘Atlas  of 
Demography’ already provide an unprecedented body of data, interactive maps and charts in this 
area,  in  addition  to  other  tools,  such  as  the  Rural  Observatory.  Nevertheless,  greater  attention 
will  need  to  be  given  to  building  the  evidence  base  and  gathering  capacities  to  assessing  and 
further anticipate demographic trends and their implications, including how policies can be better 
designed  to  cater  for  the  changing  cohort  of  seniors  in  our  societies.  A  major  step  in  this 
direction is the proposal for a Regulation on European statistics on population and housing70 that 
aims  at  modernising  and  integrating  demography,  international  migration  and  population  and 
housing census statistics. 

64 Figures  as  of  28  September  2023.  Data  are  based  on  the  pillar  tagging  methodology  for  the  Recovery  and  Resilience  Scoreboard  and 
correspond to the measures allocated to the policy area ‘early childhood education and care’ as primary or secondary policy area. For more recent 
information  and  figures on  the RRF,  please  also  refer  to  the Report  from  the  Commission to the  European  Parliament  and  the Council  on  the 
implementation of the Recovery and Resilience Facility: Moving forward, COM (2023) 545 final/2. 
65 Ibid. Data correspond to the measures allocated to the policy area ‘General, vocational and higher education’ as primary or secondary policy 
area. 
66 Ibid.  Data  correspond  to  the  measures  allocated  to  the  policy  area  ‘Adult  learning’,  ‘Green  skills  and  jobs’,  and/or  ‘Human  capital  in 
digitalisation’ as primary or secondary policy areas. 
67 Ibid. Data correspond to the measures allocated to the policy area ‘Healthcare’, and/or ‘Long-term care’ as primary or secondary policy areas. 
68 Figure as of 5 October 2023. Data correspond to the measures allocated to the policy area ‘Social housing and other social infrastructure’ as 
primary or secondary policy area. 
69 European Regional Development Fund, European Social Fund Plus, Cohesion Fund and Just Transition Fund. 
70 Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on  European  statistics  on  population  and  housing,  amending 
Regulation (EC) No 862/2007 and repealing Regulations (EC) No 763/2008 and (EU) No 1260/2013, COM(2023) 31 final. 

22 

 
 
 
 
 
With a view to enhancing the available tools, the Commission will:  

Reinforce the data and evidence base 

▪  Transform  the  Atlas  of  Demography  into  a  dynamic  platform  for  the  creation  and 
dissemination  of  knowledge  about  demography  at  EU  level,  facilitating  the  exchange 
between Member States.  

▪  Support,  in  the  framework  of  the  European  Statistical  System,  Member  States  in 
enhancing their population and housing statistics and implementing innovative actions, 
based  on  the  future  regulatory  framework  for  European  statistics  on  population  and 
housing (ESOP). 

▪  Support analytical activities under the ESF+ employment and social innovation  (EaSI) 
strand  in  2024,  addressing  key  aspects  of  demographic  developments,  in  particular 
relating to longevity, ageing and long-term care. 

▪  Support  research  through  Horizon  Europe  on  policy  responses  to  demography 
challenges,  including  a  study  on  the  implications  of  the  rising  need  for  long-term  care 
(‘care wave’) to be published by 2025. 

Support the review and upgrading of demography-related policies at all levels 

▪  Encourage,  in  cooperation  with  the  Presidency,  regular  dialogues  and  exchanges  with 
Member  States  on  all  dimensions  of  demography  through  dedicated  structures  and 
resources. 

▪  Make  use  of  the  Technical  Support  Instrument  to  provide  assistance  to  national 
authorities,  upon  their  request,  for  developing  or  updating  national  strategies  aimed  at 
addressing  demographic  change,  notably  in  the  context  of  the  flagships  ‘Youth  First’, 
‘Skills’,  ‘Overcoming  barriers  to  regional  development’,  and  ‘Migrant  integration  and 
talent attraction’. 

▪  Release, in early 2024, the 9th  cohesion report  which will offer an opportunity to reflect 

on how cohesion policy helps Member States address demographic challenges. 

▪  Mainstream  demographic  concerns  in  relevant  policy  proposals  at  the  EU  level  and 

their accompanying impact assessments where appropriate. 

▪  Organise a thematic conference in the first half of 2024 to reflect on how systems and 
policies  can  sustain  longevity  in  Europe,  building  on  the  key  findings  of  the  Pension 
Adequacy and Ageing Reports. 

Ensure that no region in the EU is left behind 

▪  Launch the Harnessing Talent Platform officially on 23-24 November 2023 and proceed 

with further calls under the Talent Booster Mechanism.  

▪  Pay particular attention to the specific challenges linked to the demography of rural areas 
in  the  forthcoming  report  on  the  implementation  of  the  long-term  vision  for  rural 
areas. 

▪  Support the creation of 100 regional innovation valleys involving EU regions with lower 
innovation  performances,  with  funding  of  EUR  100  million  from  Horizon  Europe  and 

23 

 
 
EUR  70  million  from  the  Interregional  Innovation  Investments  (I3)  instrument  under  the 
ERDF. 

▪  Hold  a  regular  dialogue  in  the  relevant  Commission  expert  group  covering  Cohesion 
Policy  funds 71  on  demographic  challenges  and  support  by  relevant  funds,  in  view  of 
ensuring 
their 
programming and implementation. 

that  demographic  challenges  are  adequately  addressed 

throughout 

▪  Invite Member States to make use of the upcoming mid-term review of Cohesion Policy 
programmes  to  adjust,  where  necessary,  the  programmes  to  the  needs  generated  by 
demographic challenges.  

5.  CONCLUSION 

Demographic  change  has  a  profound  impact  on  our  lives  and  the  competitiveness  of  our 
economy.  While  the  ‘longevity  society’  can  help  us  adapt  and  reap  new  opportunities, 
population  ageing  and  a  shrinking  working-age  population  may  exacerbate  existing  challenges 
related  to  the  shortage  of  labour,  productivity  and  public  budgets,  adversely  affecting  the 
economy  and  society  at  large.  Demographic  trends  can  also  contribute  to  widening  disparities 
between  regions  and  countries,  potentially  undermining  social  cohesion  and  trust  in  our 
democratic institutions to deliver broad-based prosperity and well-being. 

Europe  must  pursue  a  comprehensive  approach  that  empowers  all  generations  to  realise 
their talents and aspirations. EU leaders expressed in Granada their determination to invest in 
the  skills  of  the  future  and  address  demographic  challenges.  To  build  a  resilient,  sustainable 
economy  that  works  for  people  and  a  society  where  individuals  can  fulfil  their  potential,  it  is 
crucial  to  carefully  balance  different  policy  objectives.  EU  and  national  polices  should  enable 
people  across  Europe  to  reconcile  family  aspirations  and  paid  work.  Gender  equality,  non-
discrimination,  respect  of  fundamental  rights  and  intergenerational  fairness  must  guide  our 
efforts  at  all  time.  With  acute  labour  shortages  straining  businesses  across  the  EU,  legal 
migration  and  third  country  nationals’  effective  integration  are  vital  too,  in  complement  to 
harnessing talents from within the Union. The planned Social Partner Summit at Val Duchesse in 
the  first  half  of  2024  will  be  an  opportunity  to  further  tackle  the  pressing  issue  of  labour  and 
skills shortages. To address the issue of competitiveness overall, the Commission President has 
tasked  Mario  Draghi,  former  ECB  President  and  Head  of  Government  of  Italy,  to  prepare  a 
report on the future of EU competitiveness by summer 2024. 

By working together, we can progress towards a strong, dynamic, competitive and cohesive 
Europe.  This  Communication  points  to  key  reforms  and  investments  needed  to  address  and 
manage demographic change in Europe. As set out above, policy-makers in the Member States 
should  apply  them  in  their  national  and  regional  contexts  in  a  whole-of-government  approach. 
The Commission  is  committed to  support  Member States in  effectively  using the tools  at  hand 
and,  to  this  end,  continue  to  develop  them  further.  In  their  efforts,  policy-makers  should  also 

71 Expert group on the Common Provisions Regulation Funds (CPR Expert Group), see C(2021) 7888 final. 

24 

 
 
 
promote  citizens’  active  participation  and  involve  all  players  –  social  partners,  civil  society 
organisations,  and  others,  grounding  their  policies  in  local  realities.  This  way,  we  can  help 
individuals  and  communities  thrive,  fostering  the  welfare  and  well-being  of  present  and  future 
generations alike. 

25