Demographic Pressure in the European Union
AbstractOn top of the sovereign debt crisis in the European Union, demographic change is exerting enormous pressure on public finances. We analyse four policy options: lowering pension benefits, increasing labour market participation of the native population, immigration and participation of older people. Our results show that the most publically indebted EU economies face the highest increases in public spending on the retiring baby boom generations over the coming decades. Fortunately for these economies, it turns out that adjusting their labour market participation is easier than for their neighbouring economies within the EU. Increasing labour market participation to 60% keeps several countries largely out of the woods.
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Bibliographic InfoPaper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2012_11.
Date of creation: 11 Jul 2012
Date of revision:
Demography; fiscal policy; labour; ageing; European Union.;
Find related papers by JEL classification:
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- D6 - Microeconomics - - Welfare Economics
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-07-23 (Economics of Ageing)
- NEP-ALL-2012-07-23 (All new papers)
- NEP-DEM-2012-07-23 (Demographic Economics)
- NEP-EEC-2012-07-23 (European Economics)
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