Europe’s fastest-ageing countries also tend to have the most generous pensions and lowest retirement ages. A French retiree now spends 23 years on a pension—the longest in the OECD—while Denmark is preparing to lift its retirement age to 70 by 2040.
Ageing costs are rising well beyond pensions. France, Belgium, Norway and Austria are set to spend around 30% of GDP on ageing-related costs by 2045, the most in Europe. Long-term care alone is set to climb from 1.7% to 2.6% of GDP by 2070, with southern Europe hit hardest as populations age fastest. Some countries—like Norway, backed by its sovereign wealth fund—can absorb the pressure. Others face far tougher choices.
Reforms can ease the burden, but action is urgent. Linking benefits to life expectancy and adjusting retirement ages can spread the cost across generations. Delay only guarantees harsher cuts or higher taxes later. Discipline now means ageing sustainably later.
✅️ The first ever EU Anti-Poverty Strategy.
This matters because 𝟏 𝐢𝐧 𝟓 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧𝐬 is at risk of poverty or social exclusion.
These are people who work but still struggle to cover basic costs.
Families one crisis away from losing their home.
Children without access to essential services.
Young people left without support when they need it most.
NOW we are changing the approach.
Fighting poverty cannot mean acting only when people have already fallen through the cracks. It means preventing hardship earlier, with three clear priorities:
🏠 𝐒𝐚𝐟𝐞 𝐚𝐧𝐝 𝐚𝐟𝐟𝐨𝐫𝐝𝐚𝐛𝐥𝐞 𝐡𝐨𝐮𝐬𝐢𝐧𝐠: Support must come before people lose their homes.
💼 𝐀𝐜𝐜𝐞𝐬𝐬 𝐭𝐨 𝐪𝐮𝐚𝐥𝐢𝐭𝐲 𝐣𝐨𝐛𝐬: Work must offer dignity, decent pay and real opportunities.
💁🏻 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐜𝐡𝐢𝐥𝐝𝐫𝐞𝐧 𝐚𝐧𝐝 𝐲𝐨𝐮𝐧𝐠 𝐩𝐞𝐨𝐩𝐥𝐞: Poverty must not be passed from one generation to the next.
🇪🇺 Europe is not defined only by its economic strength, but by its social model. The way we respond to poverty will shape citizens’ trust in the European project.
This is only the beginning.
#commissionerofthepeople
Poverty is usually measured as a snapshot.
But people experience #poverty as a trajectory.
A new European Employment and Social Outlook working paper, “Poverty dynamics in the EU”, by EU Employment and Skills and the EU Science, Research and Innovation of the European Commission follows individuals over four-year periods (EU-SILC, 2011–2022). It complements standard #indicators —typically based on a single year—with #dynamic#measures that track poverty over time.
The findings show why time matters.
🔹 Nearly one quarter of Europeans (EU-25, excluding Luxembourg and Germany) experienced income poverty at least once between 2019 and 2022, far more than annual poverty rates suggest. Over the same period, around 11.5% were chronically or almost always poor, while 75% were never poor.
🔹 The analysis shows that poverty dynamics are strongly linked to #labour-market status, #education, #housing and #migration background.
🔹 Social transfers significantly reduce both short- and long-term poverty, though with large differences across Member States.
The paper —a recent addition to the many strands of research into poverty that have built the analytical groundwork for the European Commission's Anti-Poverty strategy— distinguishes between transient, recurrent and chronic poverty, showing that poverty is not only about how many people are poor, but also how long, how often, and how deeply they experience it.
A dynamic perspective can support more effective policies: not only lifting people out of poverty but also preventing people from falling (once or repeatedly) into it.
More info and deep-in 👉 https://lnkd.in/d7wpShYs
Immigration is becoming one of the key structural forces shaping #Europe’s economic outlook.
Since 2020, the EU’s migrant population has increased by more than 11 million people (+13%), with inflows reaching record highs—particularly in countries such as Spain and Germany, which account for around half of this increase.
But beyond the scale, what stands out is the economic impact:
• #Immigration is offsetting the decline in native working-age populations across most EU countries.
• Foreign-born workers have contributed around 40% of GDP growth between 2022 and 2025.
• They account for nearly two-thirds of total employment growth.
• In several countries, participation rates among migrants already exceed those of natives.
These trends are not cyclical—they are structural, and increasingly central to Europe’s growth dynamics.
At BBVA Research, we explore these dynamics in detail in our latest report:
https://lnkd.in/dSJYijU5
Delighted to have presented our new policy paper Fertility Decline and Population Ageing: Sustaining Welfare through Healthier Societies at National Institute of Economic and Social Research (NIESR)
Across Europe, demographic change is shaping the future of welfare, labour markets, and competitiveness. Declining fertility and population ageing are no longer distant trends, they are already influencing how countries organise healthcare, pensions, and education, and how they plan for economic growth.
Italy represents a clear case. It combines very low fertility rates, one of the world’s fastest ageing populations, and significant territorial inequalities in both health and income. These dynamics are structural and persistent, and they interact with each other in ways that are not always recognised in public debate.
Low fertility reduces the future labour force and weakens the tax base, just as ageing increases healthcare and pension expenditure. The result is a system under pressure: fewer workers supporting more retirees. At the same time, regional differences in health behaviours, employment, and access to services create additional gaps in welfare sustainability and productivity.
What makes this transition particularly challenging is that it is not only biological; it is economic and social. Family choices are influenced by housing costs, employment uncertainty, childcare availability, work–life balance, and gender norms. Ageing is influenced by prevention, lifestyles, and access to care. In other words, demography responds to policy more than we often assume.
For this reason, demographic change cannot be addressed with symbolic measures or short-term incentives. It requires long-term strategies that integrate fiscal policy, family support, prevention, and innovation. Prevention and risk reduction are especially important: healthier ageing helps sustain welfare systems and free resources for education, childcare, and human capital — the same areas that support fertility and productivity.
Europe is now confronted with a strategic question: how to sustain welfare models built for a different demographic era. The cost of doing nothing is rising. Acting means aligning health, fiscal, and family policies around a new social pact that recognises demographic sustainability as a cornerstone of economic sustainability.
Demography is not fate. It is policy, and it can be shaped.
giuseppe ArbiaFrancesca CardileLucia Della RattaBrunel University of LondonBrunel Public PolicyBrunel Business SchoolUniversità Ca' Foscari Venezia#Demography#Fertility#Ageing#PublicHealth#Welfare#Economics#HealthEconomics#Policy#HumanCapital#PopulationHealth#Sustainability#FutureOfWork
Europe doesn’t have a baby problem.
It has a system problem.
Across the OECD, 37 out of 38 countries are now below the 2.1 replacement level.
Births no longer sustain populations. Migration does.
In many cases, fertility did not “gently” decline. It collapsed.
South Korea moved from 6.1 to 0.7 children per woman.
Chile, Costa Rica, Colombia, Türkiye, Mexico each dropped by about 5 children per woman since 1950.
Europe is now locked in a low-fertility equilibrium:
- Southern Europe sits at 1.2–1.5 (Italy, Spain, Portugal).
- Even “family-friendly” countries like France or the Nordics hover around 1.5–1.6.
- Israel is the only OECD country above replacement at 2.8. Mexico is second at 1.9 and falling.
The data shows a clear pattern.
Fertility falls when systems do not support family life in a modern economy.
Key structural drivers:
- High cost of living and housing.
- Delayed family formation due to long education and career paths.
- Rigid workplaces with weak family-policy alignment.
- Urban lifestyles built for singles, not parents.
- Economic uncertainty, even in wealthy economies.
South Korea is the extreme case. High education, long hours, expensive housing, limited childcare flexibility. A direct clash between work structures and family life.
For Europe and for Luxembourg, this is not a “social” issue on the side.
It shapes:
- Workforce size, productivity, and pensions.
- The urgency of talent attraction and migration policy.
- The need for automation, AI, and robotics as demographic infrastructure.
Family policy becomes economic policy.
Demography becomes competitiveness.
How do you see Europe redesigning its systems to stay both prosperous and demographically sustainable?