Building a resilient future for Europe

CPC members Professor Jakub Bijak and Dr Emily Barker have recently concluded their contribution to the FutuRes project, describing labour market challenges and what can be done to create resilience in ageing societies, many of which have decreasing populations. Their key messages and subsequent recommendations are presented in the project's final discussion paper, 'A resilient future of Europe: Strengthening families, work and pensions in the face of demographic change'.

Since early 2023, the FutuRes project (“Towards a Resilient Future of Europe”), funded by the European Union's Horizon Research and Innovation Programme, has been bringing scientists and policymakers together to address challenging societal situations. Professor Bijak and Dr Barker are part of an international project team that has been examining what makes people and society resilient, and how resilience can be applied to the challenges posed by demographic change. Over the coming decades, the size of older population groups in the EU is projected to increase significantly, and that of younger cohorts will decrease. FutuRes looked at the potential challenges for labour markets, health care, social security programs and inter-generational fairness, and asked how our societies can remain resilient through these changes.

Along with providing the newest scientific research, the project has been in a constant exchange with policymakers in the EU, state governments, and regional authorities. Their feedback has improved the research design, and has been invaluable for translating the findings into policy recommendations.

Speaking about the importance of the FutuRes work, Professor Arnstein Aassve, Head of the FutuRes research project, concludes: "The consequences of demographic change are difficult to address, but dangerous when left unchecked... Ignoring this reality will have dire consequences".

To address labour force challenges, FutuRes research by Professor Bijak and Dr Barker looked at the extent to which job automation (including robots and AI algorithms) and immigration can work in combination with other strategies. For this, they developed economic models to examine several detailed case studies.

In the first study, they found that there is significant potential to mitigate some of the challenges related to population ageing by increasing older workers’ workforce participation, especially those aged 65–74 years. They developed a model that simulates how two large and linked European economies like Germany and Poland might cope with a shrinking workforce. This model serves as a useful case study to test labour market policies, for two reasons: migration between these countries is quantitatively one of the largest in Europe, with Germany being historically a net receiver of Polish migrants, and labour market automation in these two countries is very uneven. While the models demonstrate the need for plans that still harness the benefits of migration and automation, they also show that both countries will be helped by investing in older workers (65–74) by incentivising them to continue to work. This holds true even if they remain in the labour market part-time. Of course, barriers in the labour market exist, preventing people of that age who wish to work from participating, so for this strategy to work, these barriers would have to be significantly reduced.

In the second case study, they carried out simulations for Germany, Sweden, Italy, and Poland, to model possible futures for typical economies in Western, Northern, Southern and Central-Eastern Europe. The findings confirmed that increasing migration and investing in automation would fill some labour gaps, but regional challenges would remain, alongside labour market problems specific to the contexts of different countries.

They conclude that if the aim is to both reduce pressures on government budgets in countries with a smaller workforce (and tax base) and to maintain living standards across society in the long term, there needs to be an expansion of workplace and private pensions. This would ensure that younger generations can expect more support beyond their prospective government pensions, which in many countries in Europe already don’t cover even basic living costs. It may also indirectly encourage people to stay in the labour force for longer than they would otherwise. This recommendation is based on models with detailed information on existing and future education level needs, age-specific employment dynamics, and simulated age-related spending by governments across Europe until the year 2100.

Together, Professor Bijak and Dr Barker’s FutuRes case studies reconfirmed earlier findings: policies that incentivise immigration and invest in automation can help boost employment rates and fill labour gaps in the short term. However, additional and more durable policy strategies are also needed for societies to be resilient in the face of shrinking workforces in the longer run. Based on their findings, they recommend that, instead of relying only on migration or job automation, the potential of domestic labour forces should be maximised. Governments, education systems and employers can do this by:

Increasing flexibility
• Develop attractive options for people who wish to work until older ages, for example with reduced hours or in an advisory capacity
• Invest in the skills of migrants and recognise their skills and qualifications, including for those who are not “labour migrants”, but who still would like access to the labour market, such as people with refugee status

Making “needed jobs” more attractive
• Regularly update projections of long-term labour shortages, to allow for prioritisation
• Increase the status of care work by improving wages and employment conditions
• Make applied apprenticeships and education an attractive option besides traditional tertiary education
• Promote and steer job automating technology by developing proactive strategies that facilitate and support investment in AI tools and job automating technology

Increasing support
• Help people who wish to transition between jobs or return to the workforce by accessible and attractive support in planning and options for re-skilling
• Improve “matching” between employers and employees, so that the latter are not working below their potential and skill level

Expanding workplace pension schemes
• Implement (higher) tax breaks for pension savings so that people have the incentive to contribute
• Start contributions relatively low, so that younger people are encouraged to “opt and stay in”

You can read the full report on ‘Work’ by Professor Bijak and Dr Barker from page 14 of the discussion paper. You can also watch Dr Barker's CPC-CG webinar on 'Are migration and automation possible solutions for Europe's ageing challenges?':



Further reading and listening

A resilient future of Europe: Strengthening families, work and pensions in face of demographic change (FutuRes Discussion Paper)

How robots will change our jobs (FutuRes Research Digest)

How will robots change my job? (Population Europe – In Touch with Tomorrow video)

Resilience and vulnerability – Migration, ageing and technological change (FutuRes Policy Paper)

Skills shortage in the EU: Ways towards labour market resilience (Population Europe Policy Insight)

Specification and initial analysis of dynamic model for examining policy resilience (FutuRes Research Report)

To the labour market’s rescue: Policy pathways forward (Population Europe Policy Insight)

Nine months per year - Episode one (Certain Futures podcast)

They’re our future - Episode four (Certain Futures podcast)

Acknowledgements

The FutuRes consortium is coordinated by the Dondena Centre for Research on Social Dynamics and Public Policy at Bocconi University in Milan. It includes SGH Warsaw School of Economics, the University of Southampton, TU Vienna, the Population Research Institute at the Family Federation of Finland, Population Europe, AGE Platform Europe and VDI/VDE Innovation and Technology GmbH. FutuRes is funded by the EU's Horizon Europe Research and Innovation programme.

Posted 13/11/2025 10:42