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Dear First Lady Nausėdienė,
First Ladies and first gentlemen,
Prime Minister Inga Ruginienė, Ministers, Distinguished guests, colleagues, friends all,
Thank you for the very warm welcome back to Vilnius and for the invitation to share some observations at this Growing Europe Summit on “Shaping Europe’s demographic future by investing in families and every new life.”
Investing in families, young people and children is of fundamental importance for the future of our societies and economies.
These investments help underpin – yes – individual, family and social well-being, but they are also a key foundation for future economic growth, social cohesion and intergenerational equity.
Supporting families, young people and children helps ensure economic security, boost labour market participation, reduce child and family poverty and it helps prepare children and young people with the foundational skills needed for lifelong success.
Public policies that facilitate parental employment and access to early childhood education and care lead to stronger household incomes and overall economic stability.
Investments targeted at vulnerable families and children drastically reduce the risk of poverty, particularly among single-parent households, while promoting equality of opportunity
Investments to ensure everyone has access to the best possible opportunities in education and the labour market, both today and into the future. Helping to ensure everyone has the best possible opportunity to live their best lives for themselves and for the benefit of all.
Investments to maintain a healthy, dynamic, and age-diverse workforce that is productive and innovative.
Investments to lay the foundations for economic growth while ensuring fiscal sustainability.
And investments to address some of the structural changes in our economies and societies.
Birth rates across OECD countries are less than half what they were six decades ago.
The fertility rate in the average OECD country declined from 3.3 children per woman in 1960 to 1.5 children per woman in 2022.
At 1.3 children per woman, Lithuania’s fertility rate is even lower – down from 2.4 in 1960.
With the exception of Israel, birth rates in all OECD countries, including in all European OECD countries, are below the level that would be needed to keep the population constant.
In terms of physical health outcomes at birth:
Data in our Health at a Glance publication, which we released last Thursday, illustrates the enormous progress that has been achieved in reducing mortality of very young children.
The infant mortality rate across the OECD – that is, the share of children who do not live until their first birthday – declined from 3.7% in 1960 to 0.4% in 2023.
Developments have been similarly positive in Lithuania, where at 0.3% last year, the infant mortality rate was below the OECD average – down from 3.8% in 1960.
However, as this Summit and on World Prematurity Day lets remind ourselves that pre-term births and low-weight births remain a significant challenge.
In 2019, the most recent year for which we have comparable data across OECD countries, 7.5% of all live births were pre-term – that is, at less than 37 completed weeks of pregnancy.
Compared with 1990, this is in fact up slightly from 6.9%.
Children born pre-term face a range of increased health risks, such as risks related to breathing and heart disorders after birth, learning disabilities and chronic diseases in later life.
Similarly, the share of babies with a birthweight of less than 2.5 kilogrammes has also slightly risen across OECD countries: from 6.3% in 2000 to 6.7% in 2023.
Investing in healthy children and families is our shared responsibility.
It is also a policy imperative in response to the economic, fiscal and social impacts of population ageing.
The OECD’s Pensions at a Glance report, which we will publish on Thursday next week, highlights how much old-age dependency ratios are set to increase.
25 years ago, in the year 2000, there were 22 adults aged 65 and over for every 100 people of working age across OECD countries.
Today, in 2025, that number has already grown to 33 out of every 100.
And in just 25 years from now, that number will have increased even further to 52 out of every 100 – that is, the number of adults aged 65 and over is expected to be more than half the size of the working-age population by then.
The economic, social and fiscal impacts of this trend are enormous.
We estimate that the decline in employment due to population ageing will lead to a level of per capita GDP 14% lower than it otherwise would have been, with significant implications for living standards.
In terms of fiscal impacts:
Lower growth means lower revenue for governments at a time when public expenditure needs on health, long-term care and retirement incomes for an ageing population will keep increasing.
Indeed our assessment is that a decline in both the level and growth of GDP caused by population ageing would cause a 14% reduction in tax revenue by 2060, compared to a no-policy change scenario.
Over the next 15 years, under current policy settings, we estimate that increased spending on pensions as a result of population ageing will add another 10% of GDP to the average public debt level and a further 9% of GDP in expenditure on health and long-term care.
In order to support families, promote child well-being, and address population ageing, we see four key policy priorities.
First, providing comprehensive support to families, including for childcare.
Policies that help reconcile work and family life can lower the costs of having children, facilitate parenthood decisions and ensure that family support appropriately reflects the societal benefits of children.
Last year’s OECD report Society at a Glance demonstrated that investing in early childhood education and care, parental leave, and family allowances has a statistically significant association with higher birth rates.
Family policies also help boost employment and working hours of parents, especially women.
In parallel, improving the affordability of housing is important to support those who wish to have more children.
Rental costs have risen faster than household incomes over the last 15 years in 14 of the 19 European OECD countries with available data.
Second, enhancing newborn and child health.
Targeted measures can help address the consequences of pre-term and low-weight births, and improve children’s health.
Timely access to, and high-quality provision of, pre- and post-natal and paediatric care are cost-effective ways to prevent severe problems, and further spending needs, later in childhood and adulthood.
Third, enhancing education outcomes.
Investing in high-quality school education and effective school-to-work transitions is a key foundation for growth, merit-based social mobility, equality of opportunity, and for boosting young people’s job prospects.
Our Programme for International Student Assessment – PISA – shows a significant drop in student performance across the OECD from 2018 to 2022.
Test scores of 15-year-old students declined in mathematics by the equivalent of nine months’ worth of education, and in reading by six months’ worth of education.
Skilled teachers are a key factor for high-performing education systems, as the results from the OECD’s recent Teaching and Learning International Survey highlight.
We need to continue to strengthen teacher training and the tools available to them, including those based on AI and other digital technologies, to ensure students have the right skills in our evolving economies and labour markets.
Fourth, addressing the economic and fiscal impacts of lower birth rates.
As we live longer, and live longer healthier, we need to work longer.
To counter the negative impact on employment participation rates, and hence productivity, we need to raise effective retirement ages and strengthen opportunities to work at older ages – by reducing disincentives in pension systems for continued participation in the labour market.
And we need pursue pro-competition regulatory reforms and invest more in productivity enhancing infrastructure, equipment and technologies, including AI and other digital technologies, to enable a smaller number of workers to achieve more in less time.
And on the fiscal front, given the shifts in proportions in the number of people 65 years and over compared to the working age population – to keep pension systems financially sustainable there are only really three options, pay higher contributions, pay contributions for longer, or accept lower incomes in retirement. In a context where we live longer and live longer healthier, to work and contribute for longer would seem to be the comparatively most achievable way to manage impact of population ageing on the financial sustainability of pension systems.
The OECD will continue to work closely with countries in their efforts to address lower birth rates and population ageing, and improve children’s well-being.
For example, the OECD Crete Centre on Population Dynamics, established in 2023, advances policy-oriented research and advice on demographic challenges and their impacts on economic prosperity.
We are also developing a “Recommendation on Promoting Child Well-being at Times of Profound Change” – with practical guidance on child well-being reflecting the OECD’s collective policy experiences.
In closing,
Family, health, education, pension, and economic policy tools are all needed for us to adapt to population ageing and declining birth rates, and to support families.
This Summit is an opportunity to exchange views on how we can optimise our investments in these tools to achieve the best outcomes for our children, and ultimately our shared future.
I look forward to our positive and productive discussions.
Thank you.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.