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There has been a lot of global talk lately about the acceleration of the population ageing process, a phenomenon that affects many countries in the world and particularly those in the European Union. Governments must take this trend into account when planning public policies. This demographic phenomenon manifests itself in an increase in the proportion of older people in the total population and is caused by a combination of declining birth rates, rising life expectancy and improving health and social conditions. Similar to the Domino effect, population ageing has implications in a number of major economic, social and political spheres. One of the major effects is increased pressure on pension systems, health care systems and the labour market. The European Union is one of the global regions most affected by this phenomenon due to its demographic and economic structure. For Romania over the next 25 years, the future is not too bright because the latest reports show a downward trend in the working age and estimates show that Romania’s population will fall below the 1950 level.
Europe, the continent most affected by population ageing
The global population aged 65 and over is growing at an accelerating pace. Whereas 4-5 years ago around 9% of the global population was over 65, sociologists estimate that this percentage will rise to almost 16% by 2050. The countries most affected by the ageing trend are, as is to be expected, the developed countries, especially those in Europe, East Asia (Japan) and North America. Worryingly, the phenomenon has also started to become visible in developing countries.
Worldwide, there are three major factors behind the phenomenon of an ageing population. Among these worth mentioning: the falling birth rate (which has become a common feature in many developed countries), low or uneven migration (which affects demographic balance, particularly in Europe) and increased life expectancy (which is due to advances in medical care and living standards). It is no longer news that the Member States of the European Union are among the regions most affected by an ageing population. Four years ago the EU population aged 65 and over was 21%. If we compare this with 2001, when it was only 16%, the elderly population has increased by 5% in about 20 years. It is expected that the share of older people will reach 30% by 2050, which will have significant economic consequences as the proportion of the active workforce will fall while the number of retired people will rise.
Which countries in the European Union are on an upward trend in population ageing?
When we talk about the phenomenon of population ageing in Europe, it should be noted that this trend is not uniform in all EU countries. However, it has been observed that in some Member States the ageing trend is more accelerated.
For example, Italy is one of the countries with one of the world’s most ageing populations, with over 23% of the population aged 65 and over. Germany, Europe’s second largest economy, is facing a marked ageing process. Four years ago around 22% of the population was over 65. With such a high percentage, Germany’s pension and social security system is under pressure because fewer young people are entering the labour market and contributing to the budget.Greece ranks third but what is specific to Greece is that it has one of the fastest ageing populations in the European Union. Although it is a smaller country compared to Italy and Germany, the migration of young Greeks to other EU countries for economic opportunities contributes to the demographic imbalance Portugal doesn’t seem to have a good future either as around 22% of its population is elderly and its birth rate is one of the lowest in the EU. This means that ageing will continue to be a major challenge for state social policies. In Spain we have more than 20% of the population aged 65 or over, and the trend is increasing. As a country in Eastern Europe, the phenomenon of ageing is strongly felt in Romania as well, with what we could call devastating effects on the pension budget. The migration of young Romanians to Western European countries has accentuated the process of population ageing in these Eastern European countries.
Romania’s population in 2050, below the level of a century ago
In Romania, according to the most recent statistics, the able-bodied population is almost certainly declining, with people over 65 years of age accounting for 22% of the population. Also the latest estimates of the United Nations Organization, (without taking into account the migration of young people to western EU countries) indicate that Romania’s population will fall to 16 million in 2050, below the level of the middle of the last century.
Romania currently has a population of around 19 million and the retirement age is 65 for men and 63 for women, which is expected to reach 63 in early 2030. As regards the number of people over 65, according to UN data, if Romania currently has about 3.75 million people aged 65 or over, by 2050 this threshold will exceed 4.5 million and could reach 5.2 million. An extremely pessimistic scenario indicates that Romania’s population could fall below 14 million in 2050, which would be below the 1950 level and almost 40% of the population would be elderly. If we refer to the population aged between 20 and 64 (according to Eurostat data for the year 2023) this currently stands at 11 million people. The most pessimistic scenario indicates a steep decline in this segment of the population and will result in a decline of 4 million people by 2050.
As is already no longer news, the pension law in Romania has been amended and under the new law, the standard retirement age will also increase for women to 65. As life expectancy increases, the longer people live, the longer they will have to work. Pensioners in Romania currently live three years less than in other European countries. After the age of 65, Romanians have a life expectancy of around 16 years. This puts Romania in second last place in the European Union, with only Bulgaria below Romania in this respect.
2050 – big challenges at EU level
The 2050 horizon is uncertain and will bring big challenges at European level. We all know that by 2050 more targets need to be achieved to reduce greenhouse gas emissions and a change in the way food is produced for the population. According to the Institute for Economics and Peace’s 2020 estimates, some 3.5 billion people would be food insecure in 2050. This indicates an increase of 75% compared to 2020. Another problem is natural disasters, fuelled by changes in the pattern of nature. If these calamities continue to happen at their current rate, 1.2 billion people would become refugees worldwide. By 2030, the number of people forced to move because of climate change is likely to reach 200 million. Against this backdrop, the countries of the world, including those of the European Union, will have to mobilise additional financial resources to prevent the worst effects of climate change as far as possible.
As a conclusion on the accentuation of the ageing trend, we can argue that this phenomenon will continue to have a significant impact on economies and societies around the world, especially in the European Union. As has been exemplified, countries such as Italy, Germany, Greece, Spain and Romania are already facing major challenges in this respect. In the medium and long term, the solutions that governments will offer will require far-reaching reforms of economic and social systems, including an adjustment of the labour market and social protection systems and not least economic measures to increase the birth rate.