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Demographic Changes

Conference Report - April 2012

Demographic change – a wake-up call for all of Europe.

The working population of Europe is declining, while the ageing population is expanding. Solutions are needed to prevent stress of citizens and companies workers and at the same time improve affordable childcare services to allow more women to join the labour market.  On the other hand, the provision of better organised home-help services for households and support services for the elderly can become a substantial source of new jobs.

These were some of the key messages emerging from an innovative Breakfast Debate in Brussels, 24 April on demographic change and future job opportunities in the home help, childcare and eldercare sectors organised by Edenred, the pioneer of the ‘Ticket Restaurant’ system, together with Toute l’Europe.eu, the online European information service. 

The event was the first of a series of ‘Policies & Practices’ debates being organised with the aim of bringing together policy makers with practitioners from the field to help develop constructive and workable policy solutions.  

Highlighting the current demographic situation in Europe was Dr Erika Schulz from the prestigious German Institute for Economic Research (DIW) in Berlin. She presented the latest population trends in Germany which show that the number of elderly people requiring care will rise from the current 1.3 million to 3 million by 2050, while the number of carers to look after them is steadily declining. Dr Schulz anticipates a shortfall of some one million carers with evident consequences.

As a participant in the pan-European research project ‘ANCIEN’ (‘Assessing Needs of Care in European Nations’) Dr Schulz was able to point to the similar disturbing patterns emerging in many regions of the EU -  an indicator of an impending crisis in the long term care for the elderly.

“The ‘baby boom’ generation of the 1950s who typically had two or three children has been replaced by a more cautious generation less certain about the future and less willing to commit to large families,” she said. “The labour force in Germany will decline from 43 million today to 34 million in 2050 while the number of elderly they have to support continues to increase.” 

Jean-François Lebrun from the European Commission’s Directorate-General for employment, social affairs and equal opportunities said that at the EU level the number of over 65 year olds will double over the next 50 years from 87.5 million in 2010 to 152.6 million in 2060, according to Commission estimates. 

Mr Lebrun presented the Commission’s analysis of the demographic challenge and provided the audience with a preview of new  important consultative document “Towards a job-rich recovery” being presented by the Commission later this year. 

The EU has set an objective of increasing the employment rate in the 20-64 age group to 75% by 2020 and is investigating a number of strategic areas for potential job creation. One of the areas it highlights is the employment potential in the sector for personal and household services (PHS). It also believes many jobs can be created providing long term care (LTC) for the elderly and people with disabilities. 

Potential for jobs in household services

Mr Lebrun points out that home help and care for the elderly do not demand the technical skills levels of professional health services. Encouraging jobs in these sectors can allow people to get a foothold in the labour market while opening up possibilities for later skills development (‘up skilling’). They can offer various levels of job skill requirements from ‘do it yourself’ to the higher levels of care services. 

The Commission also recognises that Europe also needs to implement measures which will attract more women into the workforce by improving their support services and overall work-life balance. Importantly, the expansion of trustworthy and affordable PHS services will enable women in particular to be free to focus on their own higher productivity work.

New model for the low skilled

Mr Lebrun points out that there is a need to develop a ”new model of jobs for the low skilled”. The Commission’s proposals for the PHS sector have considerable job creation potential. By subcontracting chores such as housework at a rate of just one hour per week, a potential of 5.5 million jobs can be realised, he said.

As a practical way of organising PHS, Mr Lebrun presented the example of the ‘Titres services’ (services voucher) system operated in Belgium which could be a useful model for other countries.

Instead of going to the informal market to find domestic services such as cleaning, laundry, cooking, shopping etc., a household can buy service vouchers at 7.5 euro per hour from an agency regulated by the public authorities and have the services of a fully legalised helper. The full hourly cost of the service in the Belgian system is 20.80 euro with the difference being financed by the national employment office (ONEM).  

Take-up of the system has been good and more than 10% of users say they are able to increase their own work availability and employability as they can delegate mundane takes. Others have found that when freed from doing housework they were able to seek employment work once more. 

This Belgian approach provoked a lively discussion with particular interest being focused on the potential application of this system to child care and elder care services. Representatives of family organisations pointed to the importance of being able to work with the same people on a long term basis. Others discussed the potential for providing higher skills accompanied by higher service voucher tariffs.

Jean Francois Lebrun pointed to the advantages of being able to bring a lot of people in from the black market to work fully legally – a benefit for both householders, employees and the state. 

While the cost of this system is currently relatively high for the public purse, Lebrun pointed to the potential for refining the system by finding the optimum price for the service vouchers.

“With suitable refinements the system can become highly affordable for the public purse. An extrapolation of the Belgian system across the EU would give a net cost of 1.2 billion euros for creating 4 million new jobs in housework services,” he explained. 

Direct benefits to the public purse can include reductions in unemployment benefits, additional revenue from personal taxation and social security contributions. Indirect benefits can include savings from other support schemes, the greater possibility for the elderly to stay at home, a better work-life balance and increased aggregate demand at the macroeconomic level.

Discussion centred on the expansion of the scheme to enterprises which have every interest in ensuring a fully committed and focused workforce, particularly the females, freed of household worries.

Other participants pointed to the potential of filling the shortage of carers for the elderly by using unemployed youth, and more males in a sector currently dominated by females (85%). The sector had to be made more attractive to attractive more people to work in the area it was suggested. 

For these schemes to succeed, Mr Lebrun stressed, the public authorities have to take a global, long term vision and level of service has to be maintained through adequate training and where necessary supervision.