DEMOGRAPHY delivered an important message to Permanent Secretaries: Three key ways to adapt to demographic change and its consequences

The DEMOGRAPHY programme was invited to a workshop of Permanent Secretaries, where the highest level of management of the ministries discussed long-term demographic issues together with the Prime Minister’s Office. At the workshop, we presented three key ways to adapt to demographic change and its consequences. The longer decisions on adaptation measures are postponed, the more challenging adaptation will become. 

The population structure is undergoing a major transformation that affects all sectors of government. These are fundamental changes with wide-ranging impacts on society, the economy, and people’s lives. Finland is currently one of the oldest countries in the world, and low birth rates are further accelerating population ageing and reducing the number of people of working age. Growth in net immigration does not eliminate the problem. As the share of people with an immigrant background increases, Finland must also adapt to a more multicultural society. 

The number of workers is declining and increasingly dependent on immigration. 

Investing in education can mitigate the effects of low birth rates and population ageing

Research shows that education is a key tool for adaptation. Investing in education increases labour productivity, helping to compensate for a smaller workforce. The negative effects of very low birth rates can be alleviated by investing in education. 

This investment can be made without additional funding. The total amount spent on education remains the same when there are fewer children. Raising the educational attainment of men would have the greatest impact. 

Investing in education is also supported by the multiple links between educational attainment and well-being, such as health and length of working careers, as well as the decline in education levels in Finland, which reduces human capital and weakens the country’s competitiveness. 

Stochastic population forecasts are essential for enabling society to adapt to changing conditions and respond proactively to demographic change

Population forecasts are a key part of the knowledge base for population policy, forming a central foundation for long-term societal planning and decision-making. They provide estimates of future population size and structure, enabling efficient allocation of resources to meet future needs, for example in public services. Forecasts help ensure that society can respond to demographic changes in a timely and appropriate manner. 

Population development has been forecast in Finland since the 1930s. A point forecast based on the continuation of past trends does not provide a sufficient picture in today’s uncertain environment. 

Number of births in 1971–2023 and forecast for the number of 0-year-olds in 2025–2070. 80% prediction intervals are shown with dotted lines. 

Source: Alho, Juha & Valkonen, Tarmo (13 December 2024). “Finland’s population development 2025–2070”. Etla Brief No. 148. Figure 2. https://www.etla.fi/wp-content/uploads/ETLA-Muistio-Brief-148.pdf (In Finnish.)

In contrast, stochastic population forecasts take uncertainty into account: they produce a probability distribution that allows assessment of the likelihood of different development paths. They are better suited to capturing the rapidly changing dynamics of demographic development. 

Producing stochastic forecasts requires sufficient and sustained resources. In practice, Statistics Finland would be the best actor to produce a transparent and publicly accessible population forecast. 

Finland needs a comprehensive population policy programme

Population development should be examined broadly. When discussing population policy, all factors affecting fertility, migration, and mortality are relevant. All of these influence the future population structure. 

Population considerations should be a starting point and a cross-cutting element in all policymaking, as demographic issues affect all policy sectors. 

A demographically sustainable Finland requires comprehensive and long-term policymaking. 

A national programme for adapting to changes in the population structure would bring together different administrative sectors and cover the key components of demographic change. 

Immigration plays a central role. Could Finland, in a visionary sense, set a goal of becoming a “model country” for immigration? 

Through decision-making, it is possible to influence and adapt to demographic change and its consequences. However, this requires both political will and knowledge—impact assessments and a strong evidence base. The longer action is delayed, the more difficult decision-making becomes. 

Photo: Sami Siilin 

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