Low fertility and population aging have become two of Europe’s most significant long-term challenges. Europe’s demographic transformation will eventually shape future employment and welfare systems. Sustained low fertility means that fewer young people will enter the workforce, while rising life expectancy increases the number of people eligible for pensions. Together, these trends are shifting the balance of the population pyramid, with migration further influencing population change. The policy challenge is to help people achieve their family plans while also adapting employment, pensions and care systems to an aging society.
According to Eurostat, there were 3.55 million live births in the EU in 2024, 3.3% fewer than in 2023, with the total fertility rate falling from 1.38 to 1.34 births per woman over the same period, reaching a record low. This measure estimates the average number of children a woman would have over her reproductive life if she experienced that year’s age-specific fertility rates. In low-mortality populations, replacement-level fertility is approximately 2.1 children per woman: the level at which one generation would replace itself over time in the absence of migration. With 1.34 births per woman, the EU figure is well below this benchmark. However, it does not alone determine whether the total population grows or declines, as migration also shapes demographic trends.
Meanwhile, people aged 65 and over accounted for 22% of the EU population on January 1, 2025, up from 17% in 2005. Life expectancy at birth reached 81.5 years in 2024. Longer lives are a positive development, but combined with sustained low fertility, they shift the population’s age structure towards older age groups. It affects labor supply, pension financing and demand for healthcare and long-term care.
European governments have adopted a wide range of responses to address low fertility, but a comprehensive strategy must also give young people greater economic security, stable employment and the independence to start families.
Why fertility rates are falling and what it means for Europe
The causes of declining fertility are complex and cannot be traced to a single factor. They include changing family trajectories, longer educational and professional pathways, housing constraints, economic uncertainty and the difficulty of combining paid work with caring responsibilities. People with stable employment, secure and affordable housing, and access to childcare services are in a better position to realize their family plans compared to those facing unemployment, temporary work or economic insecurity.
For many young Europeans, graduation no longer represents an immediate transition towards economic independence. Instead, it is often followed by internships, temporary contracts, unemployment or repeated short-term job placements. This persistent uncertainty can delay important life-course transitions, such as leaving the parental home, purchasing a home or starting a family.
Recent graduates generally enter employment at relatively high rates: In 2025, 87% of recent tertiary graduates aged 20-34 were employed in the EU. Yet finding a job does not necessarily mean achieving economic stability. In 2024, 31.1% of EU employees aged 15–29 held temporary jobs, compared with 7.4% of those aged 30–54. A study of 27 European countries found that temporary employment can delay women’s transition to parenthood, although its effects vary across national policy contexts.
Demographic change is also linked to changing expectations and life trajectories. A comparative study covering 31 European countries shows that the transition to adulthood has become longer and less standardized, with the completion of education, labor-market entry, home-leaving, partnership formation and first birth generally occurring later or following more varied sequences. The timing of these transitions also differs according to gender, family background, birth cohort and national context. Consequently, important life transitions, such as leaving the parental home and having children, are frequently postponed.
Population aging and low fertility have consequences that extend beyond changes in population size. The European Commission projects that the EU labor force could shrink by around 25 million people between 2022 and 2070. A relatively smaller working-age population may contribute to labor shortages and weaker economic growth, while a growing older population increases demand for pensions, healthcare and long-term care. These developments may place greater pressure on public finances and on younger generations through taxation and social contributions.
Policy responses across Europe
European countries have adopted different strategies to encourage higher fertility rates and support families. One of the most common approaches has been the introduction of financial incentives, including child allowances, tax reductions and lump-sum transfers for parents. These measures aim to reduce the economic costs associated with raising children and provide families with greater financial security.
However, a review by the Organisation for Economic Co-operation and Development (OECD) suggests that financial incentives on their own tend to have only modest or short-term effects on fertility. While financial incentives can support families who already intend to have children, they rarely address deeper structural problems such as employment insecurity, housing difficulties or uncertainty about the future. For this reason, successful demographic strategies increasingly focus on creating a social environment in which individuals feel able to make long-term decisions.
France is often considered an example of a European country that has developed a comprehensive family policy system, combining financial support with extensive childcare services and policies designed to facilitate the combination of work and family life. France has historically invested in creating conditions that make parenthood more compatible with professional careers, contributing to fertility rates that are comparatively higher than many other European countries. In 2024, France recorded 1.61 births per woman, the second-highest fertility rate in the EU. This makes France a relevant comparative case.
Access to childcare services represents another fundamental component of European demographic policies. The availability of affordable and high-quality childcare allows parents, especially mothers, to remain available in the labor market during parenting. Yet, access remains highly uneven across Europe. In 2024, 39.3% of children under 3 years old were enrolled in formal childcare or education in the EU, ranging from 5.1% in Slovakia to 78.9% in the Netherlands.
Germany has expanded childcare provision and reformed parental leave to make paid work and family responsibilities easier to combine. Since 2013, children from the age of one have had a legal entitlement to a childcare place. A quasi-experimental study found that, following the expansion, mothers living in districts with larger increases in childcare provision had employment rates 5.7 percentage points higher than those in districts where provision expanded less.
The Nordic countries are frequently cited as examples of policies aimed at achieving a better balance between professional and family responsibilities. Their systems generally include paid parental leave and measures encouraging fathers’ involvement in care. This provides an opportunity to examine how fathers’ use of parental leave is associated with subsequent childbearing.
A natural-experiment study of parental-leave reforms in Norway and Sweden found that fathers’ quotas substantially increased fathers’ use of parental leave, while their effects on subsequent fertility were limited and differed between the two countries. These findings suggest that a more equal division of care can form part of a broader work-family strategy, but should not be treated as an automatic solution to low fertility. Even though its effects on fertility are not uniform, greater fathers’ involvement in care remains important for gender equality and work-family balance.
Towards a comprehensive European strategy
The demographic challenge cannot be addressed only through traditional family policies. Although childcare services, parental leave and financial support are important, they do not remove the uncertainty that many young adults face when planning their future. Employment insecurity can make long-term decisions more difficult, particularly when unstable working conditions persist during the transition to adulthood.
Strengthening the relationship between universities and the labor market can play an important role in this process. Universities should provide stronger pathways towards employment through career services, professional training, apprenticeships and cooperation with companies and institutions. Stronger cooperation with businesses and public institutions, improved career guidance and practical training opportunities can support smoother transitions into employment.
Expectations about the future also matter. A controlled experiment involving 1,674 participants in Florence and Oslo found that exposure to positive or negative future economic scenarios significantly affected participants’ intentions to have a child within the following three years. This suggests that fertility decisions may depend not only on current economic circumstances, but also on how individuals perceive their future prospects.
Labor market policies should therefore be part of a broader demographic strategy. The objective should not simply be to increase employment, but also to improve the quality and predictability of early-career opportunities. Greater employment security cannot reverse demographic decline on its own, but it can complement childcare, parental leave and financial support by making long-term planning easier.
A broader demographic strategy should also consider the period before people become parents. A 2026 study of 6,009 adults in Italy found a substantial gap between desired and realized fertility, with economic and work-related factors, inadequate housing conditions and insufficient family policies among the most frequently reported barriers.
European countries should continue developing policies that support parents after childbirth. Affordable childcare, parental leave, flexible working arrangements and measures promoting a more equal division of care remain fundamental. Rather than choosing between employment and family policies, a long-term demographic strategy should combine them, integrating support across the different stages leading to and following family formation. A comprehensive response may consequently require a combination of family support, accessible childcare, housing policies, labor market measures and investment in young people’s transition to economic independence.
Ultimately, Europe’s demographic challenge is not simply about encouraging more births but about creating the conditions in which individuals can reconcile professional and family aspirations and realize their personal and family plans.
[Sangeeta Mohanty edited this piece]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
Source: www.fairobserver.com
