(European Economy. 7. December 2008.
This report provides a description of underlying macroeconomic assumptions and projection methodologies of the age-related expenditure projections for all Member States over the period 2009-2060. On the basis of these underlying assumptions and methodologies, age-related expenditures covering pensions, health care, long-term care, education and unemployment transfers are envisaged to be presented to the ECOFIN Council in May 2009.
The long-term projections provide an indication of the timing and scale of changes in economic developments that could result from an ageing population in a ‘no-policy change’ scenario. The projections show where (in which countries), when, and to what extent ageing pressures will accelerate as the baby-boom generation retires and average life span in the EU continues to increase. Hence, the projections are helpful in highlighting the immediate and future policy challenges for governments posed by demographic trends. It should be recalled that the long-term projections are not forecasts, they are subject to increasing uncertainty over time, and the results are strongly influenced by the underlying assumptions. Moreover, given the current juncture characterized by the financial and economic crisis, there is also considerable additional uncertainty concerning the medium-term economic developments.
This report responds to the mandate the ECOFIN Council gave to the Economic Policy Committee (EPC) to update and further deepen its common exercise of age-related expenditure projections by the autumn of 2009 on the basis of a new population projection to be provided by Eurostat (the EUROPOP2008 demographic projection was released in April 2008).
Erratum - table 2.5 - Estimated impact of pension reform on participation rates (2030-2060) in percentage points (comparison of projections with and without incorporating recent pension reforms) [14 KB]