Demographic change and its impact on the EU labour markets(with a special focus on New EU MS)

Anna Ruzik-SierdzińskaWarsaw School of Economics,

Institute of Labour and Social Affairs

Outline of the presentation

• Past demographic and labour market development of CEEC

• Current situation• Policy answers and future development• Summary

Past trends

Demography:

• NMS - delayed (but faster than in EU-15) Second Demographic Transition: changes in fertility, longevity, patterns of family formation

• Longevity increase - despite the mortality crisis at the beginning of transition

Labour market:

• Beginning of 1990s - transition to the market economy with first unfavourable and then favourable impact on labour markets

• Different policy reactions for the initial shock

Current situation

The population ageing is an important challenge confronting the European Union. EU-15 „older” than NMS but on average they experience positive population growth

Slow growth or a decrease in population caused by: negative natural growth and negative net migration (LT, BG, LV) negative natural growth not fully compensated by the migration

(HU, RO, EST, D) positive natural growth but high negative migration (PL).

NMS - less diversified population, emigration and relatively small inflows of immigrants

Further longevity increase

TFR and life expectancy, 2009

Source of data: Eurostat

Median age 2000 and 2010 (years)

0

5

10

15

20

25

30

35

40

45

50

Irel

and

Cyp

rus

Slo

vaki

a

Pol

and

Rom

ania

Luxe

mbo

urg

Lith

uani

a

Mal

ta

Cze

ch R

epub

lic

Uni

ted

Kin

gdom

Est

onia

Fra

nce

Hun

gary

Spa

in

Latv

ia

Den

mar

k

EU

27

Net

herla

nds

Por

tuga

l

Sw

eden

EU

25

Bel

gium

Bul

garia

Slo

veni

a

Gre

ece

Aus

tria

Fin

land

Ital

y

Ger

man

y

2000 2010

Source of data: Eurostat

Old-age dependency rate (in%)65+/15-64

0

5

10

15

20

25

30

35

Irel

and

Slo

vaki

a

Cyp

rus

Pol

and

Luxe

mbo

urg

Mal

ta

Rom

ania

Cze

ch R

epub

lic

Net

herla

nds

Lith

uani

a

Slo

veni

a

Hun

gary

Uni

ted

Kin

gdom

Spa

in

Den

mar

k

Est

onia

Latv

ia

Bul

garia

EU

27

Fin

land

Fra

nce

EU

25

Bel

gium

Aus

tria

Por

tuga

l

Sw

eden

Gre

ece

Ital

y

Ger

man

y

1991 2000 2010

Source of data: Eurostat

Labor market development

Decline in the working age population, larger cohorts of older workers

Employment rate for older workers lower in CEEC

The gap for women between older and newer Member States is especially large.

Weaker trend towards part-time work than in EU-15, where an increase in part-time female employment contributed to higher employment rate

PL, RO – high, but decreasing share of employment in agriculture

Employment rate of 55-64, 2009

Source of data: Eurostat

Response to demographic trends

• Active ageing policies– Pension system/ labour market

• the gradual equalisation of male and female retirement age

• life-long learning

• working time arrangements to increase satisfaction with the work-life balance

– Health care– Voluntary activities

• Discussion of possible future impact of migration

Summary

• New Member States experience ageing of population with a considerable impact on future labour force

• Labour market activity and migration changes can have an important influence on future development of labour market

• The Europe 2020 Strategy: „smart growth, sustainable growth, inclusive growth” in times of demographic changes