The Issue of Ageing in the European Union

Abstract

Nowadays ageing is one of the biggest social and economic challenges around the world. The problem is not only a typical condition in the developed states, but it also shows an accelerating rate in the developing countries. The study examines the effect mechanisms of an aging society from a fiscal and economic growth approach. Based on the literature review and according to the theoretical framework, it can be stated that ageing affects the macroeconomics through four channels: rising health and pension expenditures, the decreasing of the number of active workers, the reduction of population growth and the mitigation of productivity growth. Based on the cluster analysis carried out on the Member States of the European Union in empirical studies, it should be emphasized that the states of the “aging vulnerable” group are most affected by the problem. Nevertheless, the aging society can generate significant effects in the short term in all EU countries, which can easily escalate through spill-over effects.