ABSTRACT
Despite differences between European Union (EU) member countries, most experience demographic change characterised by a decrease in mortality and fertility rates leading to a growing proportion of older people with effects on the working population. As the baby boom generation, born in the middle part of the twentieth century, approaches retirement age, larger cohorts of workers will be retiring while the numbers of new labour market entrants will be insufficient to replace them. Social stability, physical security, improved living conditions and economic as well as medical progress have contributed to longer life expectancy and improved quality of life (Commission Communication 2006). As a result, a major labour shortage is expected, which will pose a serious threat to macroeconomic performance and competitiveness, despite productivity and technological advances (Villoso et al. 2008). It is argued that free movement of labour across EU member countries has further affected the demographic situation (Pollard et al. 2008), leading to a decline in the proportion of people in work in many regions of the EU (De Jong and Eding 2000).
