Abstract

Purpose – ageing population causes a number of economic and social problems related to changes in the labour market. This study aims to evaluate the effect of the ageing population on the labour force which is the main indicator of the labour market in EU member states. Research methodology – in order to achieve the aim of the study we applied the following methods: i) trend analysis to estimate and present population and changes of labour force over period, and ii) decomposition method to examine the effects of population and labour force structure in terms of age changes on size of labour force. Findings – over the 2003–2017 period volume of the labour force has declined in Romania, Lithuania, Portugal, Latvia and Greece. This negative effect is influenced by both depopulation and structural changes in the workforce, including population ageing. Size of the labour force has increased in 23 countries, but in 11 of them, these positive changes were influenced by the rising of population activity, while depopulation it influenced negatively. Research limitations – research results support the theoretical approach that ageing population may negatively affect the labour market but do not provide ways to solve this problem and this is the implication for further research. Practical implications – the obtained results are useful for policymakers of the labour market (including pension reforms). Originality/Value – the study contributes to scientific literature by sufficient understanding of ageing population problems that occur in labour market and fills the gap in research of ageing population impact on the labour market, using data of EU member states.

Highlights

  • The increasing number of older population creates demographic imbalances and social and economic consequences within society (Harper, 2014)

  • The scale to which the ageing population is causing the ageing of the labour force depends on the age-specific participation rates, but current Eurostat forecasts suggest that a significant change in the workforce age is expected

  • Carone (2005) and Fields et al (2017) investigate the impact of ageing population on overall labour market participation rate, which is the ratio of employed and unemployed people to the total working-age population; Fuch (2014) – on labour supply; Balassone et al (2011) – on size of the labour force. Research in this area is significant because countries are facing labour force shortages. Seeking to fill this gap, this paper aims to shed light on the effects of population ageing occurring in labour market expressed as the changes in the labour force size

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Summary

Introduction

The increasing number of older population creates demographic imbalances and social and economic consequences within society (Harper, 2014).

Literature review on the impact of population ageing on the labour market
An overview of population and labour force trends
Decomposing labour force growth
Findings
Conclusions
Full Text
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