The outcome of improved gender equality on demographics and labour supply
Improved gender equality measures could also help address demographic challenges for the EU, such as the ageing population. Previous research suggests that gender equality in education, labour market participation and a more balanced sharing of unpaid work between women and men is linked to higher fertility rates, which would lead to a larger population and an increase in long-term labour supply.
This is important in light of current EU demographic projections, which predict a rise in the number of older people out of the labour force.
Demographics - GDP
The impacts of higher fertility rates on GDP per capita are negative initially, as a higher dependency ratio leads to a fall in consumption per capita (despite an overall increase in consumption and GDP).
In the long term (after 2040), there is an increase in the size of the labour force as the new-borns reach working age. At this point, growth in GDP per capita increases rapidly relative to the baseline.
Demographics - Employment
An initial increase in fertility rates generates an increase in consumption, leading to an increase in demand for goods and services which affects positively employment.
Over the 2040-2050 period, the pace of increase in employment is more rapid, as more men and women reach working age. This increases the potential productive capacity of the economy, increases real incomes and, through the multiplier effect, leads to additional increases in economic output and employment.
By 2050, there are an additional 2.5 million people in employment under the rapid progress scenario.