The share of older people aged 65+ in relation to the population of working age has significantly increased throughout the European Union over the past 20 years. How does this threaten European economies and how are things in Cyprus?
The coefficient of economic dependence of the elderly reflects the ratio of the number of citizens over 65 years to the population of working age (20–64 years). It grows both in Cyprus and in the whole EU. This is evidenced by the statistics published by the Eurostate on the occasion of the International Day of the elderly.
The coefficient of economically dependent elderly persons increased by 10.2 percentage points in 20 years. In 2004, the share of elderly addicted persons in the EU was 26.8%, which means that a little less than four adult working age was per elderly at the age of 65+. As of January 1, 2024, this figure was 37%, that is, each elderly person accounted for less than three adult working age. In Cyprus, this indicator is 28.6%, fixing the gradual growth since 2019, when it was 25.8%.
The lowest indicators of the elderly dependent are recorded in the French overseas territories of Mayott (6.1%) and Gayan (13.8%), as well as in the suburbs of Bien in Copenhagen (17.8%). In the Belgian coastal region of the Verne district, the highest indicator of the share of pensioners (72.8%) was observed.
The coefficient shows what kind of load working generations carry in relation to the content of the elderly. Its growth in the EU is an alarming signal, since the aging of the population leads to an increase in pension costs, healthcare and social services, while the number of people who can work and form a tax base is reduced. As a result, European economies are faced with a threat of labor shortage, overloading of pension systems and the need to carry out large -scale reforms, including raising the retirement age, stimulating the birth rate and attracting expans or migrants.
In Cyprus, the situation so far looks softer: the coefficient is 28.6% against the average in the EU 37%. This means that the load on workers here is still less, but the dynamics is similar - in recent years, the indicator is growing confidently. Given the dependence of the Cyprus economy on the service and tourism sector, where a significant number of active employees are required, the country risks facing similar problems if it does not take measures in advance. Thus, Europe as a whole already feels serious pressure from the aging of the population, while Cyprus so far uses a temporary delay, which should be used to prepare for future challenges.
The text is prepared based on Eurostat materials
