Demographic Change and Employment: Path Dependencies and Institutional Logics in the European Commission

Europe is experiencing a “demographic crisis” because of population ageing. The economic old age dependency ratio, defined as the inactive aged 65 and above relative to the employed aged 20-64, was 43.1 in 2016 and is projected to increase to 68.5 by 2070. Such changes will particularly affect employment and social policy fields but there is little literature on how policymakers approach this issue. As the executive branch of the European Union and an important ideational agenda-setter, the dissertation investigates the European Commission’s approach to demographic change. Specifically, I examine how ideas and institutions govern the Commission’s construction of demographic change in the context of employment and social policy. Applying ideational and institutionalist theories, a framing paper and three papers address the subject using qualitative analyses of publicly available reports on employment and social issues and interviews with Commission officials. The findings suggest that the Commission faces a politicised institutional context that seems to limit the capacity for innovative thinking on demographic change. The strength of existing policy ideas on the labour market, especially the importance of economic growth and increasing employment rates of underrepresented labour market groups, creates a path dependency that makes it difficult for the Commission to innovate ideationally. In the case of active ageing, which the final paper explores, I use institutional logics to explain why the Commission has difficulty bridging traditional dividing lines between economically oriented and socially oriented ideas, but also under what conditions the different ideas tend to win. In conclusion, the dissertation suggests that not only institutional constraints but also the slow-burning nature of the demographic crisis is influencing the Commission’s ability to innovate ideationally on the topic. The finding is important for our understanding of how policymakers address other slow-burning crises.