Greying of Europe: A demographic phenomenon in Europe
Greying of Europe also known as the aging of Europe is a demographic term used to describe the population status in Europe that is characterized by fertility decrease, mortality rate decrease and higher life expectancy.
In 2006, Declan Costello and Giuseppe Carone of IMF projected that the ratio of the retiring in Europe will double in 2050 to 0.54 from the current four workers for every two retirees to two workers for every two retirees. According to the William H. Fray, an analyst with Brookings Institution envisaged that in Europe, the median age would increase from 37.3 years old in 2003 to 52.3 years in 2050. This is in contrast to the US predictions which is expected to increase to only 35.4 years old. The OECD on the other hand estimates that 39% of the working population in Europe is between the ages of 55 to 66. Besides, the minister for social affairs in Austria predicted in 2006 that by 2010 people in European Union aged between 55 and 64 years old would be more than people aged between 15 and 24 years old. Similarly, in 2006 the Economic Policy Committee and the European Commission released a report indicating that the working population of the European Union will reduce by 48 million, which is similar to 16% decrease between 2010 and 2050. At the same time, the aging population will increase by 58 million which is equivalent to an increase of 77% over the same period.
The implications of the increasing aging population indicate that the economic output in Europe could drastically reduce over the next few decades. A greying population is an indication of a looming social and economic burden in the affected countries because a significant portion of the scarce resources will be allocated to pay for health care and pension of the elder people in the society.One of the major impacts of the larger age brackets of the aging population is the rising and higher old age dependency ratio, which is the number of people aged above 65 years for every 100 working people in a country usually 15 – 64 years. If the ratio is high, it means more older people are being supported by the young working people. The dependency ratio is rising in Europe, for instance, in Spain the ratio may rise 42% point to 67% in the next four decades. Italy is expected to rise by 31% points to 67%.
There has been mixed feelings over the years about the increasing life expectancy and the falling birth rates from the time Europe experienced a demographic transition in the 18th and 19th century. The European Commission has raised concerns on reversing the decline in birth rates from the current ones of about 1.4 to 2.1 for optimal replacement level. Another approach is to allow immigrants from different parts of the world to settle in Europe so that they can prevent labor shortage deepening further. Italy for instance, will need to increase the retirement age to 77 years or allow immigrants of about 2.2 million annually to maintain a constant and stable worker retiree ratio. Approximately 25% of women in Italy do not have children while another 25% have only one child. As of 2005, some parts of Italy like Liguria had a death rate of 13.7 for every 1,000 people and birth rate of 7.7 births for every 1,000 people. The government of Italy has tried to reverse and limit the trend through financial incentives to couples with children and increasing the number of immigrants. However, the fertility levels have remained constant, while the immigrants have minimized the fall in the workforce.