Philippe Fargues - population ageing and skills ageing in europe

Population ageing and skills ageingin Europe 2015-2035

Philippe Fargues

EUI Forum on Migration Demography and Citizenship4-5 February 2016

1MPC - www.migrationpolicycentre.eu

08/02/2016 MPC - www.migrationpolicycentre.eu 2

Introduction

The paper discusses to what extent ageing can be good or bad

for the economies of Europe

It focuses on population aged 20 years and above in the next

two decades (population already born) and asks two

questions:

• What will happen if migration stops now?

• How could migration respond to built-in demographic

imbalances?

MPC - www.migrationpolicycentre.eu 3

Population aged 20 and above in the EU28 by age group in the

no-migration scenario 2015-2035

Age group 2015 2035 Change

20-44 Years 166,270,730 134,278,929 - 31,991,801

45-64 years 139,362,704 131,283,267 - 8,079,437

65 years &+ 95,962,473 133,638,032 + 37,675,559

Source: EUROSTAT


0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

20 30 40 50 60 70

Nu

mb

ers

by

sin

gle

ye

ar

of

ag

e

Age distribution of the working age population in

2015 and 2035, maintaining total numbers

constant in the no-migration scenario

2015

2035

42.8 years

47.0 years


I- The life cycle perspective: ageing can

bring benefits

• Experience grows with age

• Individuals resort to different skills at different ages

• High-skilled workers retire later than low-skilled

workers

Conclusion: each single cohort’s contribution to

production increases with age



Ageing and the Skill Portfolio

Bowlus, Mori & Robinson (2015)

Skill 1 = “cognitive-analytic"

Skill 2= “fine motor"

Skill 3 = “strength"


Source: Gary Burtless (2013), Can Educational Attainment Explain the

Rise in Labor Force Participation at Older Ages?


II- The population perspective: ageing may

harm

• Formal education stops at the age of 30 and gradually

becomes obsolete with the passing of time

• As a result of below-replacement fertility, the youngest

cohorts whose knowledge is the most up-to-date

represent a decreasing share of the working age

population

Conclusion: the capacity to innovate decreases with

population ageing


0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Overall Replacement Ratio at age 30

EU Member States 1980-2035


0

0.2

0.4

0.6

0.8

1

1.2

1.4

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Overall Replacement Ratio at age 30

EU28 1980-2035Author’s calculation based on UN (1980-2015) and EUROSTAT (2015-2035) data

Observed

Projected (zero-migration)

One-to-one replacement


60

80

100

120

2015 2020 2025 2030 2035

Ba

se 1

00

in

20

15

Population aged 20-44 years in EU Member States

2015-2035, no-migration scenario EUROSTAT Data


0

50

100

150

200

250

1985 1995 2005 2015

Ba

se 1

00

in

19

85

Human Capital Stock at age 30

EU Member States 1985-2015Total number of years at school - Author’s calculation


III- Rethinking replacement migration

What are the level and skills distribution of international

migration that would be needed to compensate for skills

ageing of native populations in Europe?


70

80

90

100

110

120

130

2015 2020 2025 2030 2035

Ba

se 1

00

in

20

15

Population aged 20-44 years 2015-2035

EU28 and Less Developed RegionsSource: UN Population Database and EUROSTAT

Less

Developed

Regions

EU28 in the

no-migration

scenario


0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

0 10 20 30 40 50 60 70 80 90 100

Age in years

Immigration flows in 2010 by age - EU28EUROSTAT Data


0

100,000

200,000

300,000

Av

era

ge

nu

mb

er

of

imm

igra

nts

pe

r y

ea

r

Migration from non-EU countries (20 to 44 years)

Observed (2009-13) vs. Needed (one-to-one replacement 2015-35)Author's calculation

Needed for replacement

Observed

Presentations & Public Speaking

Philippe Fargues - population ageing and skills ageing in europe