economicsGreecedemographicsageingproductivityfertilitypolicy
Greece’s Demographic Crossroads: Ageing, Productivity, and the Road Ahead
Prof. Dr. Nikolaos Antonakakis
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Greece is living longer but shrinking faster. Here’s why fertility, life expectancy, and an ageing workforce matter for productivity, and what policy can do next.
Greece is at a demographic turning point, living longer, but having fewer children.
The headline numbers are stark. Fertility hovers around the low 1.3s (well below the 2.1 replacement rate) while life expectancy has rebounded post-pandemic. Fewer births and more years lived shift the age structure upward, raising the share of people aged 65+ and pushing the old-age dependency ratio higher.
Why this matters for the real economy: demographics and productivity are linked. A smaller inflow of young workers means tighter labor supply; an older workforce can mean slower mobility across sectors, lower risk-taking, and a rising share of public resources devoted to pensions and healthcare instead of investment, R&D, and skills. Left unchecked, these forces weigh on output per worker and the growth capacity of the economy.
A key insight from recent research is that the impact of ageing on growth is not linear. At low levels of ageing, experience, savings, and capital deepening can support productivity. But beyond certain thresholds, the balance turns negative as labor supply shrinks and fiscal pressures mount.
For Greece, which already sits above the EU average on old-age dependency, the policy question is twofold: how to bend the fertility trend over the medium term, and how to lift productivity now to offset demographic headwinds.
What could move the needle:
• Family support that actually reduces the cost of the “second and third child” margin: universal early-childhood care, predictable parental leave for both parents (with a non-transferable portion for fathers), and targeted housing support where rent burdens are high.
• Workforce activation and upskilling for the 35–54 core cohort: large-scale, credential-based programs in data, AI-enabled tools, green technologies, and advanced services, co-funded with employers and tied to recognized certifications.
• Smart flexibility at work: trusted remote/hybrid options and flexible hours for parents of young children, without career penalties, so family decisions don’t force labor market exits.
• A “ReBrain” pathway: tax preferences and streamlined recognition of qualifications to bring home Greek talent from abroad, complemented by a fast, skills-targeted migration channel in shortage fields (healthcare, renewables technicians, software) plus structured language and cultural onboarding.
• A capital-deepening push for SMEs: an Automation & Robotics Accelerator that co-finances equipment on the condition of staff training, so technology augments (not replaces) scarce labor and raises output per worker.
• Fiscal rebalancing toward investment: a transparent “golden rule” that safeguards spending on R&D, infrastructure, and education, areas with the strongest productivity multipliers, while rigorously evaluating family policies with real-world evidence (A/B pilots and administrative micro-data).
Success shouldn’t be defined by an unrealistic jump to a 2.1 fertility rate. A practical target is to stabilize fertility closer to 1.5 over the medium term, keep net skilled migration positive, and lift labor productivity by 1–1.5 percentage points annually through skills, technology, and better work organization. That combination shifts the economy back to the “healthier” side of the ageing–productivity curve.
For the economic logic behind this, see the “Ageing Population Kuznets Curve,” which explains how ageing can help up to a point, and then hurt beyond it, especially in advanced economies. The policy task is to move the thresholds outward and raise productivity enough to stay ahead of the demographic drag.
Read the research article here: Is there an ageing population Kuznets Curve?
The headline numbers are stark. Fertility hovers around the low 1.3s (well below the 2.1 replacement rate) while life expectancy has rebounded post-pandemic. Fewer births and more years lived shift the age structure upward, raising the share of people aged 65+ and pushing the old-age dependency ratio higher.
Why this matters for the real economy: demographics and productivity are linked. A smaller inflow of young workers means tighter labor supply; an older workforce can mean slower mobility across sectors, lower risk-taking, and a rising share of public resources devoted to pensions and healthcare instead of investment, R&D, and skills. Left unchecked, these forces weigh on output per worker and the growth capacity of the economy.
A key insight from recent research is that the impact of ageing on growth is not linear. At low levels of ageing, experience, savings, and capital deepening can support productivity. But beyond certain thresholds, the balance turns negative as labor supply shrinks and fiscal pressures mount.
For Greece, which already sits above the EU average on old-age dependency, the policy question is twofold: how to bend the fertility trend over the medium term, and how to lift productivity now to offset demographic headwinds.
What could move the needle:
• Family support that actually reduces the cost of the “second and third child” margin: universal early-childhood care, predictable parental leave for both parents (with a non-transferable portion for fathers), and targeted housing support where rent burdens are high.
• Workforce activation and upskilling for the 35–54 core cohort: large-scale, credential-based programs in data, AI-enabled tools, green technologies, and advanced services, co-funded with employers and tied to recognized certifications.
• Smart flexibility at work: trusted remote/hybrid options and flexible hours for parents of young children, without career penalties, so family decisions don’t force labor market exits.
• A “ReBrain” pathway: tax preferences and streamlined recognition of qualifications to bring home Greek talent from abroad, complemented by a fast, skills-targeted migration channel in shortage fields (healthcare, renewables technicians, software) plus structured language and cultural onboarding.
• A capital-deepening push for SMEs: an Automation & Robotics Accelerator that co-finances equipment on the condition of staff training, so technology augments (not replaces) scarce labor and raises output per worker.
• Fiscal rebalancing toward investment: a transparent “golden rule” that safeguards spending on R&D, infrastructure, and education, areas with the strongest productivity multipliers, while rigorously evaluating family policies with real-world evidence (A/B pilots and administrative micro-data).
Success shouldn’t be defined by an unrealistic jump to a 2.1 fertility rate. A practical target is to stabilize fertility closer to 1.5 over the medium term, keep net skilled migration positive, and lift labor productivity by 1–1.5 percentage points annually through skills, technology, and better work organization. That combination shifts the economy back to the “healthier” side of the ageing–productivity curve.
For the economic logic behind this, see the “Ageing Population Kuznets Curve,” which explains how ageing can help up to a point, and then hurt beyond it, especially in advanced economies. The policy task is to move the thresholds outward and raise productivity enough to stay ahead of the demographic drag.
Read the research article here: Is there an ageing population Kuznets Curve?
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