We are living increasingly longer lives and – even more importantly – with better health. This is undoubtedly excellent news for all of us. However, this longevity, combined with a persistently low birth rate, is reconfiguring the demographic structure of our societies. This demographic shift calls for a profound transformation in how we organise ourselves that goes far beyond the necessary – but insufficient – use of population levers such as immigration or birth rates. In this article, we address the demographic dimension of this challenge before going on to analyse, in the following four articles of this Dossier, how this transition will impact three key areas: macroeconomics,1 public finances2 and savings and interest rates.3

In order to understand the magnitude of the demographic change that is coming, it is important to observe in more detail the trends that are shaping this new reality. Fertility rates are declining throughout the world and in the US, China and most European countries they are already below replacement level. This threshold, estimated at 2.1 children per woman, is the level at which the population would remain constant without migratory flows. In the case of Spain, the fertility rate has already been well below this threshold for over 40 years: it reached a low of 1.1 children per woman in the 1990s and is expected to remain very low over the next 25 years (1.3 children per woman). At the same time, life expectancy at birth increased by approximately seven years globally between 2000 and 2025, to 74 years, and by five years in the case of Spain, to 84 years (see first chart). Only the COVID-19 pandemic caused a temporary setback, with a fall of up to two years in some countries, from which it has already recovered. This improvement is expected to continue, with an additional three-year increase between 2025 and 2050, both globally and in Spain. Thus, by 2050, the world's population will be longer-living and older, but will also enjoy better health, since it is estimated that most of the increase in life expectancy will be in good health.4 In fact, between 2000 and 2021, 70% of the improvements in life expectancy at 60 years of age already corresponded to improvements in healthy life expectancy, defined by the WHO as years without major diseases or injuries.5 However, population ageing will also mean an increase in the prevalence of chronic diseases and dependency, and this will translate into an increase in the total burden of disease (Disability-Adjusted Life Years, or DALY) globally.

In this context of population ageing and stagnation, birth rates would be a first demographic lever to counteract population ageing. The reality of the last few decades and the forecasts for the next few do not invite optimism in this regard. Public policies that reduce the cost of having children can help promote child birth, but they generally have a very limited impact and, as the OECD states in its latest Employment Outlook,6 even the best known policies would not bring the fertility rate up to replacement level. Also, an increase in birth rates would only begin to have an impact beyond 2050, since it will not change the demographic reality of the working-age population for the next 25 years.

Thus, immigration emerges as the unavoidable demographic lever to curb population decline, albeit only partially. Between 2022 and 2024, in a context of the post-COVID rebound in migratory flows, almost 1.2 million immigrants entered Spain. The National Statistics Institute’s migration forecasts for the coming years are equally significant, with net inflows of approximately 375,000 per year between now and 2053, although demographic forecasts of migratory flows are the ones most subject to uncertainty. And yet, the migratory flows needed to maintain the current dependency ratio would be around one million immigrants a year in a sustained manner for three decades.7 It would be very difficult to receive influxes almost three times greater than those expected and, at the same time, offer the resulting population adequate public services to avoid the saturation of healthcare, infrastructure, etc. Moreover, immigration is a sensitive issue, as it affects social, economic and cultural aspects, and sometimes public perception can be distorted. For example, 7 out of every 10 European citizens overestimate the proportion of the foreign-born population in their country. In 2024, 13.9% of the EU population had been born abroad, a figure that in Spain reached 18.2%. Despite some prejudices, in most European countries citizens have a positive view of the economic impact of immigration.8 In Spain and Portugal, 47% of the population has a positive view of immigration, 40% a neutral view and only 13% a negative one. However, in some countries such as Italy, opinions tend to be more negative (24% in favour vs. 34% against, with 40% neutral).

Since neither immigration nor a rise in birth rates seem capable, on their own, of reversing this demographic transformation, it is essential to explore how the economy, the welfare system and private savings can adapt to this new population reality.