Europe Faces Demographic Decline and Labor Shortages Beyond Our Country

An aging society and labor shortages are not unique to Hungary, but rather structural challenges affecting the entire European Union. Based on reports, between 2022 and 2060, the working-age population (aged 15–64) in the EU will decline by an average of 13%. This process is even more pronounced in the Visegrad countries, a new report from the Oeconomus Economic Research Foundation pointed out. 

According to Eurostat forecasts, Poland will see a decline of 6.5 million people (-26%), Slovakia a decline of 893,000 people (-25%), Hungary a decline of 1 million people (-17%), and the Czech Republic a decline of 600,000 people (-9%).

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The consequences of demographic decline are far-reaching: the shrinking labor supply will result in persistent workforce shortages and wage pressure, moderate economic growth potential, and place an increasing burden on pension and social systems.

With fewer active workers, economic expansion will increasingly depend on productivity growth.

Most European countries are trying to address this challenge by increasing automation, raising the retirement age, or bringing in foreign labor. Hungary, on the other hand, is focusing on increasing the fertility rate, supporting families, and activating internal labor reserves.

The three main pillars of the domestic approach are:

• strengthening the family support system,
• supporting the return to work of parents raising young children and expanding flexible employment,
• and involving groups on the margins of the labor market – young people, older people, people with disabilities.

Demographic trends in the Visegrad region pose a common challenge. Addressing aging is not only a social policy issue, but also one of the keys to the region’s long-term competitiveness and economic stability.

Via Oeconomus Economic Research Foundation; Featured photo: Pexels

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