The European Union is confronted with a significant demographic change stemming from various elements, such as an aging population, a declining working-age population, de-population, skills shortages and brain drain in certain parts of the EU. These trends raise significant challenges for the economic growth, social cohesion, competitiveness and the sustainability of public finances.  

The Commission Communication on a Demographic change in Europe: a toolbox for action of October 2023 calls on Member States to develop and implement integrated policies to tackle demographic change and to mainstream demographic concerns into all policy areas. The toolbox proposes a range of legal, policy, and financial instruments, including the Technical Support Instrument.

The Communication on Harnessing Talent in Europe’s Regions of January 2023 proposes measures to address the lack of workforce and skilled employees, a trend that is affecting many regions that are ageing, and depopulating, notably of young people. For this purpose, it launched the Talent Booster Mechanism, an initiative that supports regions in training, retaining, and attracting people with the necessary skills and competences to mitigate the impact of demographic transition.

With an expected decline in working-age population over the coming decades, higher employment rates would help to ensure sustained economic growth. At the same time, a major challenge which needs to be addressed is overcoming labour and skills shortages. Nearly two thirds (63%) of small and medium-sized businesses said in a Eurobarometer survey of September 2023[1] that they cannot find the talent they need. In addition, the Commission has identified 42 occupations which have shortages, including accute shortages in certain sectors – nurses, teachers, tourism, construction, IT across the EU. At the same time, 21% of people aged 20-64 in the EU are currently inactive and require targeted assistance to enter the labour market.

Demographic change will exacerbate labour market challenges. The working age population will decline from 265 million in 2022 to 258 million in 2030 in the EU. Without concerted action, the current trends can undermine the green and digital transitions, dampen the EU's competitiveness, and weaken public services in areas already facing a shortfall of workers, such as healthcare and long-term care.

On 20 March 2024, the Commission adopted an action plan on tackling skills shortages. It contains key actions that the EU, Member States and social partners should take in the short to medium term: supporting the activation of under-represented people in the labour market; providing support for skills development, training and education; improving working conditions in certain sectors; improving fair intra-EU mobility for workers and learners; attracting talent from outside the EU.

Basic skills are the foundation skills for the future. They represent the basis for more complex tasks, upskilling and reskilling, and crucial for personal, academic and professional success. The results of the OECD’s 2022 Programme for International Student Assessment (PISA) are concerning. They showed that in the EU, around 30% of young people fail to reach the minimum competence level in mathematics, and around 25% in reading and science.  

Demographic change requires integrated solutions, reforms and investments, including on skills, to maintain the EU’s competitive edge and to build a more fair and resilient society.

[1] European Year of Skills: Survey highlights skills shortages in small and medium-sized enterprises (SMEs) - Employment, Social Affairs & Inclusion - European Commission (europa.eu)

The proposed flagship aims to address some of the pressing challenges posed by demographic change through reforms that range from supporting youth, the working-age population and the elderly at national and regional level, to enhancing the fiscal and data collection capacity of Member States to deal with demographic challenges.

The proposed flagship will support Member States to implement the EU priorities in the social, education and health areas: 2024 Commission Action Plan on Tackling labour and skills shortages in the EU, the 2023  Commission Communication on a Demographic change in Europe, the Action Plan on the implementation of the European Pillar of Social Rights (EPSR), the European Education Area, the European Skills Agenda, the European Child Guarantee and the Communication on Harnessing Talent in Europe’s Regions.

More concretely, the flagship will support Member States to:

• Enhance the level of basic skills for the youth;
• Revise education and training curricula to better meet the labour market needs through equipping children and young people with the skills needed in the labour market;
• Enhance the up- and reskilling of people and lifelong learning;
• Tackle labour and skills shortages at national, regional or sectoral level;
• Support the elderly population through reforms of active aging policies, long-term care and health care, including mental health and well-being services;
• Strengthen Member States' data collection and fiscal capacities;
• Support regions through tackling labour shortages and skills mismatches, countering the brain drain phenomenon, strengthen social dialogue, addressing regional discrepancies in access to social protection.

Member States may opt for technical support under one or several of the following [non-exhaustive] work packages:

Work package 1: Addressing skills and labour shortages at national, regional or sectoral level

• Providing access to lifelong learning and upskilling and reskilling opportunities relevant for the labour market, including for those with insufficient basic skills or reskilling opportunities for those who wish to acquire a wider or more specific set of skills, including in cutting edge areas, thereby contributing to address labour and skills shortages;
• Supporting measures to enhance green and digital literacy and skills for working-age adults;
• Boosting the participation of women on the labour market, including by strengthening quality and accessible early childhood education and care and tackling existing gender gaps (gender employment gap, gender pay gap, lower participation of women in STEM professions etc);
• Ensuring the availability of individualised support, including through a combination of active labour market policies (ALMPs) and social integration measures;
• Supporting the labour market integration of working age third country nationals, including by strengthening language acquisition measures;

Work package 2: Supporting the working-age population by strengthening social protection:

• Supporting parents and caregivers by expanding access to adequate and affordable care and work-family reconciliation measures;

• Providing social support for vulnerable households, including financially vulnerable and/or single-parent households;

• Strengthening social protection including for non-standard or atypical workers and pensions systems to ensure income adequacy in retirement and enhancing pension literacy.

Work package 3: Supporting and empowering the young generation through education reforms:

• Improving the inclusiveness, quality and accessibility of education and training systems at all levels (early childhood education and care, general school education, vocational education and training, and higher education), including non-formal and informal learning, also through the engagement of families in children learning;
• Addressing teacher shortages and increasing the attractiveness, diversity and prestige of the teaching profession to facilitate learning and improvement of educational outcomes;
• Facilitating the acquisition and consolidation of basic skills and key competences in education and training, including by analysing the drivers behind the decline in basic skills, and proposing targeted interventions addressing underachievement, reducing inequalities as well as fostering excellence;
• Promoting whole-school approaches to combatting underachievement and early leaving from education and training and promoting school success for all learners, through partnerships with local services, NGOs, social and health professionals, businesses and the community at large, including parents;
• Supporting the adaptation, effectiveness and reorganisation of education and training systems, networks and infrastructure considering demographic factors (e.g. projected changes in student numbers, ageing and other challenges affecting the teaching profession) and changing labour market needs; 
• Tackling youth unemployment and reducing the high number of young people not in education, employment or training (NEETs) by enhancing outreach and ensuring access to individualised educational and career guidance and labour market activation support, e.g. by establishing “one-stop-shop” centres;
• Enhancing access to social services for young people, including access to housing, (digital) well-being and mental health services, in particular for vulnerable youth.
• Mainstreaming youth perspectives across all policy areas, including by using available impact assessment tools (i.e. “Youth checks”) to determine the impact of legislative changes on young people, in line with the European Youth Strategy 2019-2027. 

Work package 4: Supporting an active life and the health and well-being of the elderly population, by:

• Supporting the design and implementation of active aging strategies, to prevent cognitive decline, improve health outcomes for the elderly, and enable them to remain economically and socially active, including through the acquisition of basic skills (where needed) and digital skills;  
• Increase access to affordable and high-quality long-term care for the elderly, including community and home-based health and social care, in line with the European Care Strategy and the Council Recommendation on affordable and high-quality long-term care;
• Support the well-being and mental health of the elderly to combat social isolation and loneliness, including through the development of inter-generational programmes to foster interactions with the younger generations.

Work package 5: Supporting regions by:

• Tackling labour shortages and skills mismatches, countering the brain drain phenomenon - including by investing in local and regional education and training ecosystems - and developing regional strategies to train, attract and retain talents, in line with the Talent Booster Mechanism, in regions that are in a talent development trap or at risk of falling into one;
• Addressing local and regional discrepancies in access to social protection, including social assistance benefits and labour market activation support;
• Supporting strategies to foster cultural and social inclusion within regions, including remote and isolated areas, acknowledging diversity and promoting cohesion among different communities.
• Supporting measures to strengthen social dialogue by facilitating the involvement of social partners, local communities and NGOs in the identification of skills needs and decision-making processes.

Work Package 6: Strengthening Member States' data collection and fiscal capacities to mitigate demographic change by:

• Strengthening capabilities to use advanced modelling and simulation tools to assess the impact of demographic change on various aspects of the economy, including labour markets, public finances, and social welfare systems;
• Strengthening capacity to incorporate demographic projections into medium-term fiscal frameworks and debt sustainability analyses;
• Enhancing the ability to identify, measure, and manage fiscal risks associated with demographic change;
• Developing evidence-based policy recommendations on tax reforms for mitigating demographic challenges;
• Assessing the needs of an aging population related to user-friendly tax administration tools and services;
• Enhancing the collection, processing, and analysis of demographic data to improve the quality and availability of information on demographic trends;
• Developing and disseminating tools and methodologies for analysing and interpreting demographic data.

The template will be available soon

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