Gerontocracy in Motion? – European Cross-Country Evidence on the Labor Market Consequences of Population Ageing

Michael Fertig and Christoph M. Schmidt

Table 1

Live Births per 1,000 People in EU-15 Countries

1970-2000

Source: United Nations Demographic Yearbook, various volumes.

timing suggests that an explanation relying on changes in the technology of
birth control alone might not suffice.

During this period, these European countries also experienced a steady de-
cline in child and old-age mortality rates and, correspondingly, a continuous
rise in life expectancy. This progress fell much more uniformly on the various
countries. Together, the decline in birth rates and rising life expectancy have
generated a considerable shift in the population age structure throughout
Europe. Most notably, the population share of younger cohorts declined re-
markably. Figure 1 documents the changes in the population shares of under
20 year olds in the EU-15 countries for the most recent decade. It demon-
strates that the population of the youngest cohorts in all EU-15 countries - ex-
cept Luxembourg and the UK - decreased during the 1990s. Greece, Ireland,
Italy, Portugal and Spain experienced an especially pronounced decline rang-
ing from more than two percentage points in Greece to nearly 6 percentage
points in Ireland.

Most importantly, nothing in recent fertility trends suggests that we are likely
to see a recovery of the population shares of the young in the future. To the
contrary, these shares will remain low in the decades to come. This develop-
ment together with the still increasing life expectancy of older cohorts leads to
sharp increases in the predicted old-age dependency ratios for almost all
European countries (e.g. World Bank 1999).

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