Europeans are growing older or, more precisely, we are not giving birth in sufficiently high numbers any longer. As a dramatic example of this, Germany’s population is projected to decrease from its current 82.5 million to around 75 million by the year 2050. What’s worse, half the population of the EU’s biggest country will be over 48 at that point and one third will be over 60, which does not bode well for an already struggling welfare system. OECD numbers tell a similar story, indicating that up to 45% of the old EU 15’s population will be over 65 by the year 2020. A tiny community in the North Atlantic seems to have it all figured out. While being at the top of the class in Europe as regards birth rate, Iceland is also on top regarding female labour force participation. At the same time, Iceland has the lowest unemployment rate for both men and women. How is that possible? Part of the explanation may be found in its generous and, perhaps more importantly, highly developed “gender-equality oriented” parental care system. In relative terms, Iceland spends a significantly higher share of its GDP on child and family benefits than the EU average. Nevertheless, at 19.5% of the GDP, overall spending in the social sector is far below the EU average.