Decline in birth rate to 1.35 births per woman, according to Federal Statistical Office
In recent years, Germany and many European countries have experienced a decline in fertility rates, with the German rate falling to 1.23 children per woman in 2024, a 30-year low[1]. This trend has led to rapid population aging across the continent, with the EU average fertility rate currently standing at 1.36 children per woman[3].
The consequences of this demographic shift are far-reaching. Projections indicate that by 2060, Germany’s working-age population will decline by 22%, and the ratio of old-age dependents to working-age individuals will rise sharply, from 0.39 to 0.60[2]. Across the EU, nearly 49 million people of working age (20–64) could be lost by 2050[4].
Economically, a shrinking workforce is a major drag on growth. In Germany, unless productivity increases, GDP per capita growth is projected to slow to just 0.27% annually by 2060 (down from 1.4% between 2006–2019)[2]. Lower fertility rates mean fewer young workers entering the labor market, leading to a smaller tax base and potentially higher burdens on public finances.
The rising number of retirees relative to workers intensifies pressure on Germany’s pay-as-you-go pension system and strains healthcare infrastructure[2][3]. Without reform, these systems face sustainability challenges, as fewer workers are available to support a growing elderly population.
Moreover, a smaller labor pool exacerbates skill shortages, especially in sectors requiring young talent. Countries may need to rely more on immigration to fill gaps, but even then, Europe’s total population is projected to stagnate by 2050, with significant losses in the working-age cohort[4].
In terms of workforce dynamics, the employment-to-population ratio in Germany is expected to fall by 4.63 percentage points by 2060[2]. This decline highlights the need for policies that encourage greater participation rates among women, older workers, and migrants.
The decline in fertility is not just an economic issue but also a cultural and social one. Changes in family norms, delayed childbearing, and shifting values have played a role[3]. There is a growing consensus that purely economic incentives cannot reverse these trends without addressing deeper societal factors.
Research Director Martin Bujard at the Federal Institute for Population Research attributes the low fertility rates to high investments in family policy[1]. However, the data available up to 2023 show that the fertility rate has continued to decline in most EU countries, raising concerns about the long-term sustainability of Europe’s social welfare systems.
| Indicator | 2006–2019 Baseline | 2060 Projection | |-----------------------------------|--------------------|--------------------| | Fertility Rate (children/woman) | ~1.5 | 1.23 (2024)[1] | | Working-age population | Stable | –22%[2] | | Old-age dependency ratio | 0.39 | 0.60[2] | | Employment-to-population ratio | Stable | –4.63 pp[2] | | GDP per capita growth (annual) | 1.4% | 0.27% (with current productivity)[2] |
Absent significant changes, these trends threaten to undermine both economic vitality and the sustainability of Europe’s social welfare systems in the long term[2][3].
Science and health-and-wellness sectors may see increased demand due to the aging population, as older individuals seek more medical services and educational resources on maintaining their health.
Moreover, economic and social policy must address the demographic shift by encouraging investment in family-friendly policies, facilitating labor force participation among underrepresented groups, and fostering immigration to fill skill gaps and sustain economic growth.
