Can flexible work policies reverse impact of ageing population?
As birthrate decline threatens economic growth and workplace dynamics in Europe, could flexible work policies inspired by Japan offer a solution to reverse the trend?
European birthrates are at an all-time low. The number of children born in the EU in 2022 reached its lowest point since the 1960s, continuing a downward trend. The knock-on impact of this decline means that the working-age population is shrinking, limiting economic growth. But what’s driving the decline, and could flexible work policies play a role in reversing it?
Europe’s declining birth rates
The Financial Times recently reported on Germany’s plummeting birth rate, now at 1.35 children per women – below the UN’s ‘ultra-low’ threshold of 1.4 which marks a point where reversing birth rate declines becomes particularly challenging.
Germany, Europe’s most populous country, is the latest European country to join nine others with birth rates falling below this threshold. According to the Organisation for Economic Co-operation and Development (OECD), a birth rate of 2.1 is required to maintain a broadly stable population.
The decline has been attributed to political and economic uncertainty, as well as young people reaching milestones – such as buying a house – later in life. Over the past decade, the average age of first-time mothers in Europe has risen by a year to around 31.
The implications of an ageing population will be profound for the world of work, from stagnating economic growth to re-evaluating flexible work policies and investing in more inclusive workplace design and infrastructure.
Lessons from Japan
While Europe grapples with this issue, Japan provides a sobering case study. As one of the first nations to experience severe population ageing, Japan has spent three decades experimenting with new policies and initiatives to combat declining birth rates.
Since the 1990s, Japan’s government has implemented initiatives such as generous parental leave, childcare subsidies, and direct financial incentives for parents. These measures, while impactful, have only partially mitigated the issue.
Today, Tokyo is trialling new approaches. Starting in April, the Tokyo Metropolitan Government, one of the country’s largest employers, will introduce a four-day work week and a ‘childcare partial leave’ policy, enabling employees to work two fewer hours per day.
Tokyo Governor, Yuriko Koike, commented in a speech during a Tokyo Metropolitan Assembly’s session that, ‘We will continue to review work styles flexibly to ensure that women do not have to sacrifice their careers due to life events such as childbirth or child-rearing.’
An article by Fortune Magazine reported that ‘Moving to a four-day workweek could help address some of the core issues associated with Japan’s heavy work culture, which can especially weigh on working women.’ The four-day workweek has been shown to improve the productivity and wellbeing of employees, impacting factors such as sleep, burnout and stress.
Can Europe follow suit?
Adopting similar strategies could help Europe mitigate its demographic challenges. Many organisations have already embraced hybrid work policies, offering employees more flexibility. However, these policies often fall short of the structural support needed to encourage family growth.
Flexible work schedules, subsidised childcare and robust parental leave could form the backbone of a new strategy. But reversing demographic decline will require a collective effort between governments, organisations and society at large.
As Europe stands at a crossroads, policymakers and organisations must embrace a new vision for work. Investment in family-friendly policies, flexible work arrangements, and social infrastructure will be key to building a sustainable, thriving workforce for future generations.
