In publishing its new socio-economic indicator dealing with the ageing of the occupied working population in Luxembourg on Wednesday, Liser warns the machine is running out of steam.

“Until the mid-2000s, the ageing of Luxembourg’s workforce was lower than the national population due to the steady influx of young cross-border and foreign resident workers,” it writes, adding that this allowed Luxembourg to delay the consequences of an ageing population. However, Luxembourg is catching up with its European neighbours, notably as the population which arrived in the 1990s approaches retirement age.

Liser cites as indicators the major increases in both average age and in the share of workers aged 50 and over among cross-border workers and foreign nationals. It also underlines a sizeable decline in young workers.

Shrinking share of young workers

The result is an increase in the mean age of foreign nationals between 1994 and 2017 of 6 years and among cross-border workers of 6.9, compared with 3.6 among working Luxembourgers.

The problem is further compounded by the shrinking share of workers aged 15-34. Among cross-border workers, it fell from 61.4% in 1994 to 30.6% in 2017, with the foreign resident population it fell from 55.8% to 30.8% while among Luxembourgers the shift was from 45.8% to 33.5%. At the same time, the share of workers aged 50 and over increased by a factor of 3.6 for cross-border workers, 2.5 for foreign residents and 1.9 for resident Luxembourgers.

In short, the dynamic is failing and “Luxembourg will have to deal with evolution of life expectancy and dependency ratios,” the report's author writes.

“Some firms and sectors are already feeling the impact of an ageing labour force... In this framework, and in the continuity of the European employment strategy...active ageing... remains crucial to social debates on sustaining pension systems and other issues.”