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Germany

Germany Has A Big Old Demographic Problem

Germany is expected to lose more than 13 million inhabitants by 2060. Even when immigrants and higher birth rates are factored into the equation, Germany is growing too old too quickly. Only drastic political solutions, such as moving the retirement age u

Old man in Wuppertal, Germany
Old man in Wuppertal, Germany
Tobias Kaiser

BERLIN — If Germany does not take serious action, such as raising the retirement age, its current demographic course would devastate the country. That is the message from Federal Bureau of Statistics chief Roderich Egeler, as he recently released new population projections for the year 2060.

Many fewer people will be living in Germany then than do today, Egeler's data suggests. Specifically, researchers believe that the country's current population of 81 million people will grow slightly in the next five to seven years but will then drastically decline, leaving only 68 million to 73 million people living in Germany in 2060.

Exactly how much the population will decline in this time frame also depends on the rates of birth and immigration. More on that later, but what is certain is that German society's aging won't be significantly reduced by immigration or government family policy measures. Whereas only one in five people living in Germany is over 65 now, by 2060 every third person will be over 65.

Obviously, this will deeply affect the job market. The number of people between the active working ages of 20 and 64 is expected to diminish drastically — falling by 23% to 30%, depending on the rate of immigration. That would represent a considerable weight on the social welfare system. As of now, 100 people of active working age are needed for the government to support 34 retirees, whereas in 2060 the same number will need to support 60, nearly twice as many.

This development seems inevitable at the moment, and the latest numbers from the Federal Bureau of Statistics only confirm the prognosis. Though additional immigration from countries such as Poland, Romania, Bulgaria and the southern European countries in financial crisis has halted the population decrease for the time being, it can't stop the aging of German society.

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Old German couple in a park in Leipzig — Photo: florianric

Once the process of an aging demographic has been set in motion, it's very difficult to reverse population change. Any efforts to mitigate it can only be achieved over very long periods of time.

Each new generation

The annual birth rate has been steady at 1.4 children per woman for the last four decades. Every successive generation will have fewer children than their parents, which has led to the birth rate beginning its decline since the 1970s. "Germany is already experiencing a demographic change," Egeler says.

To illustrate the drastic changes that would have to happen to halt this process, the statisticians have created a number of different scenarios. According to their calculations, the country would require net migration of approximately 450,000 to 500,000 every year to keep the population at a constant level.

While this seems realistic for the next two years, it's not sustainable. The net immigration in 2013 totaled 429,000 people, and statisticians are assuming that Germany is going to gain half a million more immigrants in 2014 and 2015, respectively. But this number is expected to decline again next year.

In reality, even a steady stream of immigrants wouldn't change the age-related demographics of Germany much, as most immigrants are from southern and eastern Europe where birth rates are even lower than in Germany. To keep gainful employment numbers at the current level, immigration alone is insufficient.

That's why statisticians believe that retirement age would have to be raised to 74 years of age to achieve some semblance of balancing the welfare state with a sufficient number of workers. And even this wouldn't solve the problem entirely. The ratio between people who are gainfully employed and retirees would still be worse than it is today because of the growing numbers of elderly people in Germany.

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