The German government has revised its demographic projections in a recent report: instead of shrinking as anticipated, Europe’s most populous country is expected to have a steady population until 2060. Currently at 82.8 million, Germany is experiencing a new population high. The main causes are high immigration and a recent increase in birth rate.
In 2015, over one million people entered Germany, mostly as refugees, in 2016, 750,000. Birth rates grew from 1.47 in 2014 to 1.6 in 2016.
While it had long been forecast that Germany’s population would decrease to 68 million by 2060, the report states that its population is in fact likely to remain at its current high until 2060.
Despite such growth, Germany’s population is still ageing mostly as a result of an increase in life expectancy.
Professor Enzo Weber, of the Institute for Employment Research, notes that 13 million baby boomers will soon retire and leave the labor market. An increase in birth rate cannot stabilise the workforce because retirement at 65 is causing the workforce to shrink far more quickly than the overall population. Only immigration can help in his view, but would require 400,000 more people to immigrate every year than emigrate. The balance is currently at 300,000.
In contrast to concerns raised in Germany, Japan’s prime minister Shinzo Abe recently declared Japan’s ageing population to be an opportunity rather than a threat.
Dealing with ageing
Addressing the issue of an ageing population with more working-age people (or attempts to increase the birth rate) is a short-term solution: it only means more elderly people in due course. A lower birth rate reduces the amount of dependent children, reducing health and education costs and freeing parents (mainly women) to be more economically active. Reduced child care expenses to parents also frees them to invest more in pensions.
Retired people already contribute to the economy through activities such as childcare for working-age parents and volunteering. While ageing does represent a challenge, creative solutions, increasing productivity and a higher priority for social care in national budgets can address these challenges without increasing numbers of young people.