Demography - once again and still challenging the welfare states

Ageing and the related progressive reduction in the ratio between those of working age and those of non-working age in the population constitute a significant challenge to the sustainability of European welfare systems. This contribution highlights how the ageing population could potentially harm European social security systems by focusing mainly on the pressures generated related to the demand side, the supply side and their combined effect in terms of economic and financial needs. It concentrates mainly on the areas more exposed to the ageing population (pension, healthcare and long-term care sectors) in a limited set of EU countries. Using aggregated data from Eurostat and recent European Commission reports, the chapter analyses how different demographic pressures will impact different welfare state sectors. The chapter also focuses on the mitigating drivers that can offset these pressures. The analysis confirms that ageing is among the primary challenges to welfare systems and indicates that it is essential to consider, besides the different magnitudes at the national level and potential positive side effects, the specific timing and composition of age-related expenditure.