DP179 | Demographic Change, Economic Growth and Social Welfare in Europe

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This paper examines the economic rationale for concern about the falling rate of growth of Europe's population. It also assembles demographic and economic time-series data for the countries of Eastern and Western Europe during the postwar period. The consequences of demographic developments for social welfare, broadly defined, are felt over a very long term. Issues discussed include the contribution of increases in life expectancy to social welfare; the potential effects of population growth on technical progress; and the impacts of changing age structure on intergenerational transfers and the financing of state pensions. The analysis suggests that, while the slowdown in European population growth raises some potential problems, there is no compelling case for pro-natalist policies.