Europe: Quality Instead of Quantity
Reiner Klingholz | Hoover Institution | January 2010
The European Union is set to lose 50 million inhabitants by 2050, which is equal to the populations of Greece and Poland combined. Not only does Europe’s population persistently decrease, it continues to age as well. Europe’s demographic decline has military experts and economists alarmed as to the future of European security and economic well-being. However, the premise is unfounded that declining population numbers are necessarily bad news in a world plagued by overpopulation and dwindling resources. While the figures undoubtedly present a challenge to Europe, they also represent a unique opportunity to reconsider demographic development in Europe and the world.
For one, the losses in Europe are being partly compensated for by immigration, which also takes some of the population pressure of the immigrants’ countries of origin. More importantly, the Finnish example shows that low population numbers need not imply economic decline. The so-called “Nokia economy” has demonstrated that a key to economic development lies with education. The knowledge-intensive sector of the economy bears great potential which can be further enhanced by investments in education and lifelong learning programs. The idea that older workers take jobs away from younger ones is not supported by the data. Evidence from Switzerland clearly demonstrates that workers over the age of 55 are so productive that their work creates additional jobs. Europeans will have to rethink their policies regarding a later retirement age, irrespective of the topic’s politically sensitive nature. Moreover, European society will have to reconsider its attitude toward older workers. Interestingly, those economies in which employees are allowed to work longer also show a greater participation of women in the workforce and higher birth rates. Financial security apparently facilitates the decision of families to have children. Modern family policy hence is not only economically but also demographically viable. The greater integration of hitherto underprivileged participants in the workforce along with an emphasis on creating equal opportunities for them will be as central to economic development in Europe as increased productivity and a focus on innovation in knowledge-intensive industries.
Economic well-being thus can be assured even in face of declining population numbers. To this end, it is necessary to mobilize existing reserves such as female and older workers, to invest more in education and to encourage the immigration of talented foreigners. On the other hand, ill-considered policies directed at promoting population growth for its own sake in an already overpopulated world may well prove counterproductive. The point is not to raise population numbers, but to improve the existing labor pool’s qualifications so that Europe can compete in tomorrow’s world. Sustainability is a concept that deserves consideration in the debate on demographics, too.
This summary was prepared by the Atlantic Community Editorial Team from "Europe's Real Demographic Challenge" published here by the Hoover Institution.
