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Ageing and welfare state policies

In the coming decades, all EU countries will experience steep increases in the share of elderly persons in the total population and a significant decline in the share of young people and those of working age.

While longer lives are a major achievement of European societies, the ageing of the population also poses significant challenges for their economies and welfare systems. The demographic transition is considered to be one of the most important challenges facing the EU.

Evaluation of demographic change at micro and macro level

DG ECFIN's responsiblity is to carry out economic analysis and evaluation at both the micro and macro levels to contribute to an understanding of the real and potential impacts of demographic change; it also provides policy advice on possible responses to this change. As part of this, DG ECFIN monitors and analyses the performance of European welfare states, with a special focus on analysing and projecting the economic and budgetary implications of ageing populations.

The age-related expenditure projections cover pensions, long-term health care, education and unemployment transfers, and feed into a variety of policy debates at EU level. In particular, they are used in the annual assessment of the sustainability of public finances carried out as part of the Stability and Growth Pact; in the context of the Open-Method of Co-ordination on pensions, health care and social inclusion; and the analysis on the impact of ageing populations on the labour market and potential growth which is relevant for the Lisbon Strategy and Broad Economic Policy Guidelines.

Outputs include notes to the Economic and Financial Committee and the Economic Policy Committee and its working groups, analytical reports and publications, briefings, speeches and inputs to the Commission's work in general.

Related publications

>> Ageing Report 2012 Economic and budgetary projections for the 27 EU MS

>> Ageing Report 2012 Underlying Assumptions and Projections Methodologies

>> Sustainability Report 2009. European Economy 9/2009

>> EC-EPC Report on the economic and budgetary impact of ageing, statistical annexes and information on demographic and macroeconomic assumptions

>> The 2009 Ageing Report: Economic and budgetary projections for the EU-27 Member States (2008-2060). European Economy 2/2009

>> The 2009 Ageing Report: Underlying Assumptions and Projection Methodologies for the EU-27 Member States (2007-2060). European Economy 7/2008.

>> EPC Report - The impact of ageing on public expenditure: projections for the EU25 Member States on pensions, health care, longterm care, education and unemployment transfers (2004-2050). European Economy. Special Report 1/2006

>> EPC Report - The 2005 projections of age-related expenditure (2004–50) for the EU-25 Member States: underlying assumptions and projection methodologies. European Economy. Special Report 4/2005

>> Setting targets for government budgets in the pursuit of intergenerational equity. Economic Paper 358/2009 

>> Public pension expenditure in the EPC and the European Commission projections: an analysis of the projection results. Economic Paper 268/2007

>> The economic impact of ageing populations in the EU-25 Member States. Economic Paper 236/2005

>> Long-term sustainability of public finances in the European Union. European Economy 4/2006

>> Actuarial neutrality across generations applied to public pensions under population ageing: effects on government finances and national saving. Economic Paper 230/2005

>> Population ageing and public finance targets. Economic Paper 196/2003

>> Pension reform: key issues illustrated with an actuarial model. Economic Paper 174/2002

>> A case for partial funding of pensions with an application to the EU Candidate Countries. Economic Paper 149/2001

>> The economic consequences of ageing populations. Economic Paper 138/1999

>> Generational accounting in Europa. European Economy. Reports and Studies. 6/1999

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