Demographic Change, Labour Market and Social Policies. Singularities of Southern Europe

Demographic changes and labour market are mutually related influencing each other, in  ways that modify the research traditions of the two related disciplines. On the one hand, aging, low fertility, migrations, postponement of the transition to adulthood modify the population age structure (and, thus, the workforce age structure) with clear implications not only on pension system and intergenerational transfers, but also on the kind of labour contracts and more frequent jobs. On the other hand, the structure of labour force and the welfare regime play a key role in influencing the main demographic trends. For example, specific labour market traits may attract immigrants (pull factor); women’s job and, labour contracts and work-family policies may influence the tempo and quantum of family formation and fertility, and then population structure.

The recent economic crisis may have strengthened the relation between demographic trends and labour markets. For example, recent studies show that countries that were hit hard by the recession, such as southern European ones, show reduced fertility when compared with a continuation of recent trends, especially at younger ages. A possible explanation is that for younger women it is easier to postpone family formation and child birth when the economic situation is perceived as particularly uncertain.  Moreover, the recent breakdown of nuptiality suggests that something more than a simple ideational change is at work. High unemployment, unstable working conditions and temporary jobs can easily increase the perception of instability especially when the welfare system is less generous with the young couples. It is not a case that where governments have devoted resources (monetary transfers, services) to youths, young families and women as in France,  both employment and fertility levels show a better trend. This point highlights the relevance of social policies within the system of relation between demographic changes and labour market. Public policies must take into account measures of reconciliation between work and family life and, at the same time, they should be readjusted according to the current demographic changes, supporting a longer working life. This results in a beneficial effect on the structure of the labour force and more widely on the social sustainability of the aging process. Pension reforms implemented in many European countries in recent years fall in this perspective.

The aim of this paper is to focus on the complex and double-sided relation between demographic changes and labour market dynamics in Europe,  with a specific focus on the evolution of this relation during the recent economic recession, taking into account the relevance of social and employment policies. More in details, on the one hand we show how the recent trends in ageing, fertility and migration are changing the workforce composition and what we can expect for the future. On the other hand we see how the labour market traits and regulation, mainly in terms of unemployment and welfare regimes as well as employment regulation and policies, influence fertility, family formation and migration.