“One of the inevitable consequences of demographic aging in France is the increase in social spending” | EUROtoday

LDemographic getting old now impacts nearly all international locations, excluding sub-Saharan Africa and South Asia. But what are its results for France?

The first consequence is the slowdown in development. The working age inhabitants (15-64 years) declines from 2023 and is predicted to lower by 0.1% per yr between 2025 and 2030, which mechanically reduces development potential. It is probably going that productiveness features additionally decline with getting old, because of the diminished agility of older individuals for guide jobs and jobs with important technological content material. In France, labor productiveness elevated by 0.9% per yr from 2010 to 2018; since its peak in 2019, it has fallen and is now 2.5% beneath its degree of the third quarter of 2019. By combining a decline within the lively inhabitants and stagnation in productiveness, the one potential supply of development turns into the rise within the employment fee, which we observe: the employment fee of 15-64 yr olds elevated from 66.4% in 2019 to 69.4% within the third quarter 2025. Growth seems set to be weak for the long run.​

Structural underindexing

The second, equally inevitable, consequence of demographic getting old is the rise in social spending and the rising deficit of social safety programs if no corrective coverage is carried out. This is true for retirement plans. The contributor/retiree ratio should enhance from 1.67 in 2025 to a degree between 1.3 and 1.4 in 2050, in a context of speedy decline in fertility (1.62 youngsters per girl in 2024) and uncertainty over pension reform and the indexation of pensions to costs. With unchanged guidelines, the pension programs deficit would enhance from round 7 billion euros in 2025 to 30 billion in 2045, in keeping with the Court of Auditors.​

The similar reasoning applies to Medicare. Social Security exhibits a deficit of 23 billion euros in 2025, primarily as a consequence of Health Insurance. The outlook is unfavorable as a result of well being expenditure will increase with age: the common annual expenditure is 1,807 euros for a French particular person aged 17 to 59, 4,195 euros for an individual aged 60 to 74, 6,448 euros for these aged 75-84 and eight,360 euros for these over 85. Added to this are 33 billion euros in spending linked to dependency in 2025.

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