Deindustrialization, job polarization and ageing in emerging Europe

This chapter looks at three important structural challenges that many emerging European economies are currently facing: early deindustrialization, job polarization and rapid ageing. In emerging Europe, the share of industry in production and employment is currently peaking at substantially lower levels compared to the experience of earlier industrializers. At the same time, medium-skilled occupations (such as clerks, craft workers, and plant and machine operators) have been declining as a share of total employment. Moreover, as emerging European populations are ageing rapidly, the ratio of the labour force to the overall population is shrinking. This chapter reflects on three policy responses to these three challenges: (1) the continuous upgrading of workers’ skills through lifelong learning; (2) improving healthcare systems to keep older workers in the labour force for longer; and (3) a greater use of automation to mitigate the adverse impact of ageing on income convergence.