Europe is facing a demographic shift that is increasingly affecting its economy, welfare systems and political landscape. Birth rates across much of the continent have fallen sharply, while the proportion of elderly people continues to increase, leaving governments with a shrinking workforce and growing pressure on pensions and healthcare.

The change is already visible in several European communities. In Vilardevos, a village in Spain, a primary school originally designed to accommodate hundreds of children now has only 31 pupils. Classes have had to be combined because there are too few students to maintain separate grades.

Many houses in the surrounding area have been abandoned or placed on the market, while the population that remains is largely elderly. Although Vilardevos represents an extreme case, similar trends are emerging across Europe.

Fertility falls below replacement level

A fertility rate of around 2.1 children per woman is generally considered necessary to maintain a population without migration. The European Union, however, recorded a fertility rate of just 1.34 in 2024, according to Eurostat.

Spain's rate was even lower at 1.1. The United States is also experiencing a sustained decline, with its fertility rate falling to 1.6 in 2024, according to the US Centers for Disease Control and Prevention.

The reasons behind the decline are complex. Rising housing costs, job insecurity and longer periods spent in education have made starting a family more difficult for many young adults.

Social attitudes have also changed. People are marrying and having children later, while many couples wait until they feel financially secure before becoming parents. Delaying parenthood can eventually mean having fewer children than originally planned.

Why family policies struggle

European governments have introduced childcare programmes, tax benefits and financial incentives in an effort to encourage higher birth rates. However, the results have generally been limited.

Germany expanded childcare facilities for young children over the past two decades. Its fertility rate initially rose from around 1.4 to approximately 1.6 before falling again. By 2025, the country's fertility rate had reached a record low of 1.32.

Hungary has similarly used tax concessions and financial support to encourage larger families. While fertility improved temporarily, the increase was not sustained.

These experiences suggest that government assistance can reduce some of the financial burden associated with raising children, but reversing a long-term demographic decline is considerably more difficult.

Immigration fills the workforce gap

As domestic birth rates remain low, immigration has become an increasingly important part of Europe's response.

Spain offers a prominent example. Despite its low fertility rate, the country's population has continued to increase, rising from roughly 46.5 million a decade ago to nearly 50 million today.

Foreign-born workers accounted for more than 70 per cent of employment growth in Spain between 2019 and 2024, according to an analysis cited by Politico.

The government under Prime Minister Pedro Sanchez has consequently treated immigration as an important economic tool. It has also introduced a major programme aimed at regularising undocumented migrants. By early July, around 1.2 million applications had reportedly been submitted.

Immigration sparks political debate

Immigration, however, is far from an uncomplicated solution.

Large inflows of migrants can increase demand for housing, schools and public services. Questions surrounding integration and employment have also become increasingly important.

Far-right political parties across Europe have made immigration a major part of their campaigns, tapping into concerns among sections of the public about the scale and pace of migration.

This has created a difficult policy dilemma. Governments need younger workers to support ageing populations, but policies designed to attract migrants can themselves become politically divisive.

A changing demographic map

The demographic transformation is not happening uniformly across Europe.

Luton in England illustrates a contrasting pattern. The city's fertility rate is around 2.0, significantly higher than England's national rate of approximately 1.4. Women in Luton also tend to have children at younger ages.

Migration is a major factor behind the difference. Around two-thirds of babies born in the city in 2025 had mothers who were born outside Britain.

The result is a younger and more diverse population, particularly because of migration from South Asia and other regions. At the same time, Luton has also witnessed political tensions over immigration, reflecting the broader debate taking place across Europe.

The difficult choices ahead

Europe's demographic challenge is ultimately about more than declining population numbers. Fewer workers mean a smaller tax base at a time when governments face rising expenditure on pensions, healthcare and elderly care.

Family-friendly policies can make parenthood more affordable, but evidence so far suggests they cannot easily reverse deeply rooted demographic trends. Immigration can provide workers and slow population ageing, but it brings political and social challenges of its own.

For European governments, the task ahead will therefore involve balancing economic needs with public concerns while preparing welfare systems for a future in which older people make up an increasingly large share of the population.

The emptying classrooms of communities such as Vilardevos offer a glimpse of what that future could look like. Europe's demographic transformation is already underway, and the choices made today will determine how successfully the continent adapts to it.