Delayed retirement ‘may avert ageing crisis’ within eurozone

Longer working hours and delayed retirement may prove the only ways to avert a sharp decline in long-term economic growth causedby an ageing population in the 12-country eurozone, according to research published by the EuropeanCentral Bank, August 2006.
The abstract of the paper says:
This paper examines the macroeconomic consequences of future demographic trends for
economic growth, financial markets and public finances. It shows that in the absence of reforms
and responses by economic agents, the currently projected demographic trends imply a decline
in average real GDP growth and a severe burden in terms of pay-as-you-go pension and health
care systems. Population ageing will change the financial landscape, with a potentially larger
role for financial intermediaries and asset prices. All this points to a need to closely monitor demographic change also from a monetary policy perspective. While population projections are surrounded by considerable uncertainty and the effects of demographic change tend to be drawn out, the magnitude of the potential effects calls for an early recognition of this issue. This paper provides some input to the examination of possible policy issues.

ECB: Occasional Paper, No.51, 2006: Macroeconomic implications of demographic developments in the euro area Macroeconomic implications of demographic developments in the euro area

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