Urban Expansion Persists: Cities Continue to Thrive, While Rural Regions Witness Population Decline by 2040
Catching Up with the Changing EU Landscape: Demographic and Economic Challenges in Remote Rural Regions
The EU landscape is undergoing significant changes, with population decline and aging taking center stage. This demographic shift poses various challenges for economic growth, public services, and social support systems. However, it's not a one-size-fits-all scenario as the effects of this transition vary greatly across different regions. Particularly, remote rural areas are experiencing some of the most profound impacts.
Remote rural regions face a dual challenge: an increasing elderly population and a dwindling workforce. While many regions experience this issue, remote rural areas are hit the hardest. In addition, their lower level of development and slower economic growth make it harder for them to attract new residents.
Understanding the Interplay of Demographics and Economy: A Colored Lens
Navigating these trends can be tough for local and national policymakers without a thorough understanding of how demographic and economic factors interact with each other. Moreover, applying uniform solutions across regions may fall short, as depopulation and aging affect territories differently.
To address this, the JRC published a working paper titled "Outlook and demographic perspectives for EU's rural regions. A modelling-based exercise". This paper analyzes population trends from 2000 to 2022 and projects figures up until 2040 for four regional typologies in the EU: urban, intermediate, rural close to a city, and rural remote regions.
The analysis relies on the DELi (Demography, Economy, Land use interaction) model, a sophisticated tool capable of providing detailed sub-national projections for population, employment, GDP, and land use. Unlike most current socioeconomic projections, the DELi model can capture the complex interplay of demographic and economic factors moderated by regional specificities. It also provides insights into age-group-specific drivers of net migration rates.
A Shrinking, Urbanizing Population
Overall, the EU population is expected to decline by 0.04% every year until 2040. However, this forecast is subject to variations across countries and territorial typologies. The Eastern regions are anticipated to experience the most significant decline with Latvia and Lithuania's populations expected to shrink by nearly 1%, while Malta, Ireland, Luxembourg, Cyprus, and Sweden are projected to grow by more than 0.5%.
Changes in population are influenced by two main factors: natural change (births vs. deaths) and net migration (incoming vs. outgoing migrants). Urban regions are likely to attract individuals of working age, compensating for negative natural change, leading to a slight annual increase of 0.18% in their population. Population is expected to decrease at a faster pace in rural regions close to a city by 0.35% and in remote rural regions by 0.46%.
An Aging Population and GDP Shifts: Notable Regional Disparities
Overall, the EU population is aging, with births continuing to decline. These demographic trends impact a society's age structure, causing economic and social consequences. According to DELi model projections, the ratio of individuals aged 65 and older over those in working age is expected to increase significantly in all EU regional typologies, with a more substantial impact on remote rural regions. The share of the working-age population (aged 20-64) is projected to slightly decrease in all regions, but the effect will be most acute in remote rural areas.
Both these changes will have the most profound impact on remote rural regions, where migration preferences also play a role. Younger generations usually prefer urban regions with higher GDP per capita and more economic and social opportunities, while older age groups seem to prioritize less congested and less densely populated regions. Since the DELi model considers the interaction between economy and demography, the analysis reveals a clearer territorial pattern, with urban regions projected to attract more population compared to projections that do not take this interplay into account.
Remote Rural Regions: Leading the Charge in Adapting to Demographic Change
Remote rural regions risk being left behind. However, some regions with special local factors offering additional sources of income and employment, such as specialized industries, tourism, or natural resources, could become models for effective adaptation to the ongoing demographic change that will affect an increasing number of regions in the future.
Strategies to address these challenges should focus on increasing labor productivity with new technologies, boosting labor market participation, particularly of young and older people, women, and immigrants. For example, leveraging the knowledge and capital of older populations to spur new business initiatives. These strategies should also ensure that public services are well distributed and easily accessible to cater to the essential needs of all age groups.
As remote rural regions move forward to overcome challenges related to their demographic situation, it's crucial for policymakers to engage regional actors and consider local specificities when addressing evolving needs and demands for services, particularly healthcare.
- Policy-and-legislation and politics are crucial for addressing the demographic and economic challenges faced by remote rural regions, as highlighted by the JRC's working paper titled "Outlook and demographic perspectives for EU's rural regions. A modelling-based exercise."
- The analysis conducted with the DELi model, a sophisticated tool that captures the complex interplay of demographic and economic factors, reveals that remote rural regions face significant effects from an increasing elderly population, a dwindling workforce, and lower levels of development.
- In the process of adapting to demographic change, remote rural regions should focus on implementing strategies that increase labor productivity with new technologies, boost labor market participation, and cater to the essential needs of all age groups, particularly in healthcare.
