According to experts and policymakers, the economic climate in Europe has turned the corner from its struggle with recession. However, even if the EU can overcome its problems with economic policy and achieve higher growth rates, the long-term outcome still appears dismal. This article claims that substantial- and uncontrollable- changes in the EU's demographics are the cause for this negative outlook. The region's working age population is significantly declining starting in 2013, and will continue to do so. Moreover, the older age population is also shrinking. This combination raises the old-age dependency ratio from 28% to 58% within the next forty years. The result of this is the decline in employment rates, as more people are outside of the workforce and more people depending on the earnings of the younger population. This puts pressure on states' public finances, which will have to increase their spending and deal with less income.
http://www.economist.com/news/finance-and-economics/21570752-growth-will-suffer-workers-dwindle-working-age-shift
1 comment:
This is the same situation that the US is dealing with now. We are seeing that the baby boomers are finally retiring, putting a large burden on the younger people and the economy with all of the social security and healthcare burdens place on the people
Post a Comment