IOBE calls for measures to stem demographic trend

Demographics is a matter of “major importance” for Greece due to the serious challenges it causes both in terms of economic development and social stability, according to the Foundation for Economic and Industrial Research (IOBE).

Analyzing the population developments in its report on social and economic trends in the Greek regions, IOBE has found that since the outbreak of the debt crisis the permanent population of the country has been shrinking rapidly.

From 2010 to 2022 it decreased by 5.9% (from approximately 11.1 million in 2010 to 10.5 million in 2022). On the contrary, between 2000 and 2010 there had been a population increase of 3.2%. 

IOBE focuses on the population evolution in relation to its age stratification, which is of great importance both for policy planning and for the effective distribution of resources.

A proportionally larger labor force promotes economic growth, while a proportionally larger aging population poses a variety of fiscal and social challenges. For example, the planning of health policy must be based on age demographics, in order to provide health services adapted to the modern epidemiological challenges faced by individual age groups.

Broader interventions will be required, IOBE recommends, in the social protection system, such as the pension apparatus, the welfare system and family policies (such as childcare) and long-term care, that are affected by age distribution and demographic trends.

Finally, the design of educational and labor policies should be based on age analysis to identify educational infrastructure needs and broader trends in the labor market.

Labor market

As a direct result of population aging, there is also a generally negative trend in the development of the percentage of people of productive age, which is also the major issue in terms of participation in the labor market and fiscal revenues. Especially in the regions of Attica and West Macedonia, there is a significant decrease in the percentage of people of productive age that started in the 2010s, and continued during the debt crisis.

Another key feature is the emergence of the oldest age group as the second most populous group in all regions of the country. In most cases, with the exception of the North Aegean, the Ionian Islands and the Peloponnese, in 1990 the youngest age group was the second most populous.

This reversal of the relationship between the oldest and the youngest age groups observed is another point of strong concern regarding future population development, as these trends seem to start almost 20 years earlier.

In connection with the overall evolution of the population and its aging, the question of immigration emerges as particularly important. The increase in births emerges as the second key point for achieving economic growth through strengthening the labor force, though this has a longer horizon than immigration, IOBE points out.