The Impact of Population Aging on the Sustainability of European Social Model

The objective of this study is to examine briefly the features of the European social model and to present the main demographic evolutions. The social model is sustainable as long as there is a virtuous correlation between the objectives settled in the Lisbon Strategy: productivity – employment – social cohesion. This correlation gets efficiency in line with social equity, stimulating the economic growth process under the terms of public finances’ stability. Any internal or external factor, which generates the break of the previous correlation is able to result either in the slowing down of the economic growth rate (or even recession), or in a decrease of the employment, an emphasis of the social inequities or all, on the most unfavorable conditions, even in all the three effects together. As a consequence, the public debt of the EU member states would get increased, thus decreasing the possibility to provide social and economic cohesion through budget transfers. One of the factors which could represent a threat for the model is constituted by the ageing of the population, which is caused by the increase of life expectancy and by fertility rate decrease. In this study, we have analyzed the changes in the population structure, the evolution of the age pyramid and the budgetary impact of aging.