The Impact of Population Ageing on Public Finances in the EU-27

María Cadaval-Sampedro, Santiago Lago-Peñas, Xoaquín Fernández-Leiceaga and Alejandro Domínguez-Lamela

No WP2614, IDEAGOV Working Papers from IDEAGOV - International Center for Decentralization and Governance

Abstract: The paper analyses the impact of demographic ageing on age-related public expenditure in the EU-27 over the period 1992-2024. The analysis covers healthcare, long-term care (LTC), and pensions. The results reveal three patterns. First, demographic effects are heterogeneous across countries, driven by short-run responses that vary by spending category—limited in healthcare, absent in LTC. Second, advanced ageing (80+) tends to be more important for long-run dynamics, especially in healthcare. Third, Central and Eastern European economies show weaker or delayed responses, while Western and Nordic countries exhibit stronger adjustments, more evident in healthcare and LTC than in pensions, reflecting the decisive role of institutional design.

Keywords: Ageing; public expenditure; demographic change; European Union (search for similar items in EconPapers)
JEL-codes: E60 E62 H20 H51 H55 J11 J14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2026-07-08
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