Population in crisis hit EU countries will suffer for decades

Joint press conference of Viviane Reding and Olli Rehn, Vice-Presidents of the European Commission, on the proposal of the EC on increasing Gender Equality in the Boardrooms of Listed Companies, (EC Audiovisual Services).

Joint press conference of Viviane Reding and Olli Rehn, Vice-Presidents of the European Commission, on the proposal of the EC on increasing Gender Equality in the Boardrooms of Listed Companies, (EC Audiovisual Services).

The positive relation between economic growth and the size of population is one of the best established principles in economic theory. There is no doubt then that today’s birth rate and future GDP are positively related, despite the fact that the dynamism of the correlation between those two crucial variables, seems to vary according to social structures, traditions and other variables.

Eurostat, the statistical service of the European Union, conducted a very interesting study of the relationship between fertility rates and the current economic crisis, under the title of “Towards a ‘baby recession’ in Europe?” The main conclusion of this work identifies a positive relationship between fertility rates and the future evolution of the GDP.

The study is examining fertility trends in 31 European countries against selected indicators of economic recession. Eurostat clarifies that, “Fertility rates are also computed for women differentiated by parity, employment status, educational attainment and migrant status, highlighting the impact that the economic crisis may have on specific population groups”.

Birth rates and crisis

The prime findings of this study confirm that since 2008, when several European countries entered into a period of economic crisis suffering substantial losses of GDP, the total fertility rate (TFR), started to decline across Europe. Income and fertility rate developments confirmed in an unquestionable manner that their relation was a positive and strong one.

According to Eurostat, “in 31 European countries, the economic crisis spread in 2009, while decreases in fertility became a common feature in Europe with a time lag. The peak of the crisis (in terms of geographic reach) in 2009 was accompanied by stagnation of the TFR in several countries, followed by a distinct fall. In 2008, there were no falls in the rate compared to the previous year, but by 2011, the TFR had declined in 24 countries. With some exceptions, these trends in fertility rates mirrored the changes that occurred in the number of live births. From the beginning of the crisis, the total number of live births in Europe reversed the previous upward trend. Between 2008 and 2011, the total number of live births fell by 3.5 %, from 5.6 to 5.4 million, and the number of countries which recorded a fall compared to the previous year grew from 1 to 26 out of 31”.

Given all this, it is well established that the current economic crisis has created what is swiftly called ‘lost generations’, even in reference to those who are not yet born. Consequently the divergence that exists between the European Union member states in respect to economic growth, has a very concrete influence on the evolution of their population in the coming decades. In reality, the population of countries which were not touched by the crisis will continue to evolve naturally, while the economies ravaged by the crisis will be unable to keep their current population levels growing.

On top of that the fall of the fertility rate today will create shortfalls in the labour force in the distant future. Consequently, a prolonged economic crisis today may, through the fertility rate drop, undermine the growth potential of the countries in question during the decades to come. People are unquestionably the main and most important factor of production. But let’s return to data.

Eurostat observes also that, “The number of live births can be broken down into the product of the age-specific fertility rates by the respective number of women of childbearing age (WCA) — the ‘would-be mothers’. The overall size of this population group has been slowly decreasing over recent years and, by 2011, it was shrinking in about two-thirds of European countries (post-census revisions of the population size in various countries may affect the current estimates). Although the year-on-year change in relative terms of the total number of women of childbearing age is much lower than the corresponding relative changes of the TFR (which is the sum of the age-specific fertility rates), its impact can be more significant”.

Childbearing

In short Eurostat has found that the crisis has not only affected negatively the future numbers of productive workers, through the fall of the TFR, but has depressed also the numbers of women in childbearing age. The drop in the numbers of this special group will extend in time the negative impact on total population in the distant future. It is well established then that the shorter or longer duration of the present crisis, will have repercussions on the ability of the affected countries to grow during the very distant future. By the same token this is one more argument for Europe to do whatever it takes to effectively put an end to the ongoing crisis, if we Europeans want to stop its negative repercussions that undermine our economies for many decades in the future.

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Comments

  1. Austerity measure is medicine but poisoned its aftermath affect is for long time and add up more problems. May be the term capitalism is towards demise to let new era emerge.

    Capitalism is good as long benefits reaches to entire population. Initial stage of capitalism favoured by all as it opened up resources and generated employment in 17-18th century. Second stage of capitalism gave better taste, as fruit when ripe tastes sweet with flavour, and kept expanding and more and more. Capitalists helped surging migration to cities and education was accordingly to suit urban population. Urbanization was boon to capitalism and another sector emerged that was banking retail sector, which developed real meaning of capitalism and its distribution and ripe fruit among citizens. More and more corporate sectors entered in banking sectors that promoted financing not only to enterprises but also to individuals. Corporate sectors began exploring new fields like speculative investments which could drive high profits. When stagnant situation arrived and cost of living increased citizens began defaulting. This situation gave birth to third stage of decay as fruit after extreme ripe has to rot and fall on earth for new life or new system. That is “Socio-Capitalism” both communism and capitalism have reached at the extreme life span to rot and give birth to new system.

    Socio Capitalism is an economic structure which privileges Communities, Individuals, Capitalists and Governments involve together to achieve Economic Goal. Thus Growth Share reaches entire population. Socio Capitalism is a system where capitalist invests and gets due reward. Its role is to invest but functions by communities and its people to promote the project and shared by all involved, encourages involved having equal interest in the growth. Government’s role does not merely sticking to running public sectors rather priority is protecting society’s interest and social order, obligates thorough watch on financers and society functioning, market economy and have upper hand on both categories. As socialism and capitalism both together attached to economic order, their endeavour is to make project successful. Unlike socialism socio capitalism encourages energetic challenging behaviour among involved citizens, communities, and investors as incentives and disincentives involved. And unlike capitalism the objective is profit with social consciousness.
    1. As each individual is a contributor to the objective, would prefer the success to survive. Share of the result shared with all involved according to their capacity. This objective promotes success economy. System helps sliding poverty level down.
    2. System facilitates population to involve in economic and social sectors to build a powerful stable economy. Reluctance of Capitalist’s investment in agro and rural based industries escaped rural growth causing heavy migration to cities.
    3. Educational Institutions and Societies: Socio Capitalism is a community initiation to explore its resources to benefit people. So educate and train is priority to identify sectors for economic growth. New system encourages introducing new research based education system to identify new resources and sources helping employment generation.
    4. Environment and Society: Communities initiation towards identifying usage of natural and cultural resources to attract tourism and so-on is promotion to environmental importance. Environment- cultural related and small sector opportunities to soar employment opportunities in neighbourhoods.
    5. Health and medical care and societies: Entrance of capitalism in Health and Medical sectors have soared manifold the cost of treatment and medicines reaching beyond ordinary citizens capacity. In Socio Capitalism system each neighbourhood to have health care units with qualified doctors and nurses. Financed by institutions or Government and governed by communities, thus would transform present system to social compatibility.
    6. Layoffs – Job cuts – contract worker and Capitalism: Job cuts is easy privileged systems of capitalism to hire and fire when want. On the other hand under Socio Capitalism each involved is share holder. An eligible person hired is an asset to the company thus on hire, shares offered at subsidised value. That may be as easy payable or bank finance recommended by the company credibility. These shares are only transferrable during way out or retirement. Unlike socialism pattern workers are equally responsible for functioning.
    7. In fact individuals investing in stock exchange are more or less unproductive as earnings not directed to companies rather exchanged between seller and buyer of shares. In socio capitalism people are encouraged to invest in projects rather than speculative stock exchanges. Careful Government regulation assures secured investments.
    8. The objective of the society shifts to humanity and human needs. Social security and social order is priority as all are linked to each other.
    9. Political and administration systems would have different philosophy to match social needs. Money and vote wouldn’t be the criteria rather performance and experience in respective fields would invite candidates to enrol for competition.
    10. Large private sectors too are obliged and have flavour of socio capitalism in regard to employment, production and marketing.
    http://www.sadashivan.com/Socio-Capitalism/

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