The projections, prepared by the EC Directorate General for Economic and Financial Affairs and the EPC Working Group on Ageing Populations on the basis of commonly agreed assumptions, describe in detail the potential economic impact and the timing and scale of budgetary changes that could result from ageing populations.
These projections provide a comprehensive and comparable basis for assessing further in depth the log-term sustainability of Member States’ public finances within the framework of the reformed Stability and Growth Pact.
The report is entitled “The impact of ageing on public expenditure: projections for the EU25 Member States on pensions, health care, long-term care, education and unemployment transfers (2004-2050)”, and is available online as a PDF file. An annex file contains all the data used in the report.
What will the EU population look like in 2050?
It is expected that a slight fall should be registered in the total population (from 457 million inhabitants to 454 million in 2050). Accroding to the report, the EU population will be significantly older in 2050. The working age population wll fall by 48 million (- 16%) by 2050 while the old-age dependency ratio (ie the number of people aged 65 years and above/ those between 15 and 64) is projected to double reachin 51% in 2050. In other words, one person working for two people retired.
Those trends will have major impact not only on labour market developments or pensions schemes but also on health care spending: Although this is particularly difficult to project public spending on health care, the optimistic scenario concludes that public expenditure on health care may increase by 1-2% of the Gross D Product (GDP) in most Member States.
An important conclusions sets out clearly that non-demographic factors will influence dramatically the effects of ageing on health care spending. This means that a preventative approach to the health status of the elderly could help alleviate the burden. The same applies to long term care. The report concludes that policy measures that can reduce disability, favour home care rather than in institutions can have a large impact on public spending.
