Europe’s population is set to shrink and age, according to the third report on demographic transformation in the EU, creating challenges for the labour market, healthcare, care systems and public finances.
Demographic change is “reshaping our societies, our economies and our labour markets”, said EU Commissioner Dubravka Šuica, calling on Europe to “to turn this transformation into an opportunity. This report provides the evidence to help Member States prepare for the future. Demography is no longer a stand-alone issue – it must be part of every major policy decision. By investing in skills, care, talent, productivity and regional cohesion, we can strengthen Europe’s competitiveness, resilience and wellbeing for decades to come.”
The report said that while the changes brought many challenges, they also brought longer, healthier lives offering opportunities to ‘boost participation, innovation and growth’. Through targeted policies on skills, care, housing and regional development, the EU says it is helping the EU Member States mitigate the effects of demographic change.
The report, drawn up by the Joint Research Centre, confirms that Europe’s population is currently at its peak; with 450.6 million people today, the EU’s population is projected to be around 445 million by 2050, and 398.8 million by 2100, representing an overall decrease of about 11.7%, to a level experienced in the 1970s.
At the same time, Europeans are living longer than ever before, with life expectancy at birth reaching 81.5 years in 2024, reflecting progress in healthcare, living standards and social conditions. By 2050, nearly one in three EU residents will be 65 or older – compared to one in five today, while life expectancy could exceed 90 years for women and 86 for men by 2100. A child born in the EU in 2023 could expect to live a life without major illness until 75.3 years.
These trends present significant challenges, says the report, from labour shortages and strained public budgets, to pressure on care systems, education and training systems and regional cohesion. At the same time, these shifts also bring opportunities. One example is the growing longevity economy which is unlocking new markets for products, services and innovations designed specifically for older citizens, creating new avenues for economic growth and job creation. This can drive innovation in healthcare, technology and financial services.
The report notes that the EU is undergoing a major demographic shift that is reshaping its labour market, requiring to boost participation and productivity. Around 20% of working-age people are outside the labour market, with a 10% gender gap in employment, while 8 million young people are not in education, employment or training. At the same time, employment among people aged 55–64 is rising compared with few decades ago. The EU is supporting these trends by promoting women’s participation, helping young people gain skills, enabling older workers to stay active if they choose, and boosting productivity through innovation and AI.
Boosting productivity and unlocking untapped talent will be key to addressing the impact of a shrinking workforce, helping sustain economic growth and strengthen public finances.
The report also shows that birth rates have fallen, while European society gets older, which means the workforce age population is decreasing. Skilled migration is already playing an important role in helping address labour shortages. By attracting talent from outside the EU, skilled migration can support key sectors, strengthen innovation, and help offset the effects of an ageing population. While it can ease demographic pressures, the priority should remain to upskill and reskill people already in the EU.
The shift to a longevity society also increases demand for healthcare and long-term care, with the number of people needing support expected to rise from 36 to 48 million by 2070 and the share of people aged 80+ doubling. While this brings fiscal challenges, it also drives innovation and more efficient care systems.
The impact of demographic change in Europe – European Commission
