Abstract
The demographic challenge faces not just Europe but the world. It requires a global strategy as well as coherent reforms on the European and national levels. This article explores a number of solutions which could contribute to a more promising future prognosis, including legislation favouring families, improving infrastructure and funding care and education. Policies for migration, immigration and the ageing labour force are also lacking. The author's examples for each of these solutions centre on Germany, but the scope of the article is international.
The phenomenon of demographic change profoundly shapes the challenges of today's society. Europe is currently experiencing a dramatic alteration in demographics that is unprecedented in dimension and consequences compared with those seen before.
In former centuries, childhood mortality, death in childbirth, epidemics, wars and famine were determining factors in the development of a population. Today, Europeans live in peace and in unimagined prosperity. Food supply is guaranteed and modern medicine and health care provide high life expectancy. Paradoxically, however, the population in many European countries is stagnating or even decreasing. The media, politicians and sociologists generally describe this phenomenon as ‘demographic change’.
In order to stabilise a population in the absence of immigration, a fertility rate (the average number of children per woman) of 2.1 would be necessary. However, everywhere in Europe the rate is below this required threshold. The EU average was only 1.5 in 2005 [3, p. 6]. In 2003, average natural population growth in Europe was only 0.4% per year. Most of the new Member States have even documented a decline in population. The population of Europe will increase only slightly until 2025, mainly due to immigration. Afterwards, a decrease is expected. The decline in the total working age population (15-64 years) will be even faster and more dramatic: between 2005 and 2030 it will fall by 20.8 million [2, p. 2]. In many European countries, the contribution of immigration is decisive for the maintenance of population growth.
It should be noted that demographic ageing is, above all, the result of significant economic, social and medical progress, which has given Europeans the opportunity to live, in comfort and security, a long healthy life that is without precedent in our history. Also, the decreasing birth rate in Europe is, first of all, an expression of social and judicial progress in modern, developed societies where individualism has been accepted. It is one of the main achievements of the industrial nations in the twentieth century that women are free to make their own decisions such as whether or not to have children and how many; women's physical integrity and their possibilities for self-realisation are respected today. Moreover, children are no longer necessary for security in old age. All this means that having children is only one option among others. However, Europeans have fewer children than they desire (1.5 instead of 2.3; see [4, p. 8]). This illustrates the restrictions that influence potential parents’ decisions. It shows that a family friendly environment is not being provided and that there is a lack of incentives encouraging people to have children. Instead, families face obstacles like expensive housing and late or insecure access to employment.
The drastic changes in population structure are causing fundamental problems. Even though these changes have been obvious for a long time, they have been misjudged by society and politicians. Family structures are in motion; there will be more older workers (55-64 years), more retired persons (65-79 years), more very elderly people (80 years and older) and fewer children, youth and employed adults [2, p. 3]. As a result of low fertility, the young cohort entering the labour market will be much smaller. In about 10 years, total employment in the EU could start to fall despite the rising employment rates. Europe's potential growth rate could decline at a time when significant additional resources will be required to meet the needs of an increasing number of elderly people for whom adequate pensions and health and long-term care provision will have to be provided [5, p. 3]. Furthermore, ageing could cause potential annual GNP growth in Europe to fall from 2.25% today to 1.25% in 2040 [2, p. 2]. This could affect entrepreneurship and fundamentally endanger the future balance of pension funds and social security systems.
Thus, there is need for action. Everybody and every part of daily life are affected by the demographic factor. In view of the expected changes, society has to be reorganised for present and for future generations. Nevertheless, it cannot be the intention of any plan of action to interfere with the personal lives of individuals. Western conceptions of freedom and human rights disapprove of a policy to stimulate an increase in the birth rate. But it is necessary to create basic family friendly conditions that enable people to realise their desire to have children. This is the way to counteract demographic change.
The determining factors of contemporary demographic trends in Europe are fertility, mortality and migration. Firstly, a decreasing birth rate is not a recent phenomenon. From 37 births per thousand inhabitants in Germany in 1841, the birth rate already decreased to 15 per thousand inhabitants in the 1850s and 1860s, and then decreased further to 8.25 births per thousand inhabitants in 2005 [6, p. 15]. In premodern societies, a large number of children could be advantageous. But due to the modernisation of basic social and institutional conditions (such as increasing levels of education, compulsory education, the abolition of child labour, the outsourcing of employment from the family household and the development of social security systems) children are, on the micro level, hardly an economic advantage anymore. Then, in the middle of the 1960s, the birth rate began to decrease rapidly yet again. In West Germany, there were still 2.5 births per woman in 1965; in 1975, however, there were only 1.4. The rate has remained at this level ever since. This second decrease in the birth rate was caused by several factors.
In most European countries, women or couples usually plan to have children after completing their education, finding a job and when certain economic conditions are fulfilled. In Germany, for example, 60% of the population believes that a woman and her partner should have finished professional training or academic studies before they have children. Often, therefore, starting a family is postponed. Postponed family planning involves the risk that it cannot be realised. Many reasons influence this development: career, adaptation to a life without children or biological reasons, even though, according to the ‘value of children’ theory, satisfaction with life improves considerably with children–-even with one or only a few. This fact is also perceived by the Germans. Paradoxically, the strong appreciation of children is, in fact, a cause for renouncing them. Some people decide very consciously to have a child. They want the child to be able to grow up with enough time and attention, with educationally valuable parenting and without material problems. These potential parents claim that certain conditions have to be present, ideally all at once, before they start a family. This high ideal results in fewer people taking this step.
However, in the context of the ‘Population policy acceptance study’, which was carried out among German women between the ages of 22 and 39, the Federal Institute of Population Research found that, on average, German women want to have 1.7 children. That is more than they actually have, indicating that the current conditions do not encourage them to have children.
A major question in this context is the compatibility of job and family. The ‘compatibility model’, where parenting and employment occur at the same time and where man and woman contribute to both, has been socially accepted. It has replaced the traditional ‘provider model’. In the compatibility model, childcare by third persons is necessary. Since, for the most part, it cannot be done by family members, external childcare has become crucial. Working and having children at the same time requires a substantial logistical and organisational effort. Workable childcare is, therefore, a decisive factor in the discussion about compatibility of job and family, particularly since for most women it is not a question of self-realisation. The majority of mothers have to work simply to ensure the family's income. An increase in the provision of day care by cities and municipalities, but also by companies, would do most to ease the situation of families. These conditions have to be improved. A comparison between Germany and other OECD states shows that a broad provision of day care for children under 3 years correlates positively with a greater rate of employment among mothers and, at the same time, with a higher birth rate. Apart from that, an increased employment rate among younger women is important in light of the exhaustion of Europe's labour potential because of demographic change.
The below-average number of children from parents with a higher level of education can also be explained by the incompatibility of job and family life. Since women and men with a relatively high level of education tend to have a relatively substantial income, a longer time spent parenting is linked to a particularly high income loss. The German government has recently tried to counteract this by linking the education benefit to the previously gained income. 1 But it also must be considered that career opportunities deteriorate in cases of longer parenting. The resultant future income loss cannot be compensated for by the education benefit.
Elterngeld’ (‘parent money’), in effect since 1 January 2007, is money given to parents with small children who decide to quit their job for a certain period to parent their child. It is a temporary wage replacement.
Besides the loss of income, there are other economic factors that do not facilitate parents’ decisions in favour of having a child. Children mean an additional financial burden for the family due to such expenses as day care, housing or clothes. In order to cope with this problem, the German state offers particularly high transfer payments favouring families in Germany. However, people with children have relatively less money than people without children. In addition, although Germany ranks third in Europe with respect to aid money for families, behind Austria and Luxembourg, the birth rate is low. In Austria the situation is similar. Therefore, aid money is obviously not the key to more children; rather, normative and infrastructural factors are decisive.
Moreover, it is alarming that child and family poverty have increased. Since 1965, the percentage of children that obtain social welfare has increased by a factor of 16 [6, p. 35]. A less regressive way of supporting families is, therefore, necessary. The burdens on low-income families have to be removed in order to save children from social insecurity and from dependence on social benefits. Families should be able to manage this with the incomes they can earn. Indeed, employment for mothers with little children can protect against poverty. Another important aspect is the social difference between residential districts. To live in a neighbourhood that is considered trendy can be a key factor in the decision against children. Consequently, the importance of work to improve residential districts has to be stressed.
In order to unburden families, fiscal advantages should be obvious. There should be further development of the education benefit and a concentration of aid money in favour of families. A good example for supporting family policy is given by the current government of Hesse, a German federal state. There, the last year of nursery school is now fully funded, which leads to considerable financial relief for parents. It would be reasonable if the other years were also fully funded in the near future.
Concretely, the development of day-care possibilities for children younger than three years old–-institutional care as well as private providers of day care–-and flexible day-care modules are important for improving the situation of families. Additionally, day care for schoolchildren must be improved. A credible offer of schooling that is enabled by childcare throughout the timetable is essential. Also, the introduction of open all-day care in all kinds of environments is necessary. To enable the compatibility of children and education, day care in universities is as important as financial aid for single parents in order to enable them to continue their studies. In this context, the European Parliament suggested the creation of very-low-interest loans for student mothers in 2007.
Nevertheless, a central group with respect to the compatibility of family and employment are the employers. There are positive examples that not only offer internal company day care but also enable adaptable and flexible work schedules. Obviously, politicians are not in a position to directly regulate this, but they can motivate, especially by emphasising the advantages that could accrue to progressive employers.
In addition, the quality of life for families is significantly determined by the availability of sufficient and affordable living space and a corresponding town and residential structure. In particular, those families with many children often have difficulty finding affordable accommodation that is of adequate size [6, p. 45]. The particular needs of larger families should be considered in every domain of residential politics. For example, in the matter of support programmes for owner-occupied property, it would be possible to link the public benefits directly to the number of children. To appear attractive as a home for families, the family friendliness of towns is decisive. This is characterised by the availability of playgrounds and free-time facilities, but also by factors such as ready access to public institutions for parents with strollers.
In general, European countries have to pursue a family policy that offers assistance to families and those who want to start one, in order to give them the freedom of choice regarding their personal lifestyle. Finally, it is also the duty of governments to work towards a change of social norms and values concerning attitudes towards families: it is absolutely necessary that parents have social prestige and that the greater contribution to care and parenting by fathers have high social esteem and be judged positively. Also, higher importance should be attached to the goal of equality between men and women in professional and family life. Politicians should also insist on a fundamental change towards a more family oriented employment mentality in the professional world.
Migration is another important factor in the demographic change taking place in the EU. Europe is already today the target of considerable migrational flows from third countries. In 2004, the inward flow represented almost 2 million [5, p. 6]; as a proportion of the entire population this flow was even higher than in the US. As has been pointed out by the European Commission, increased immigration from third countries will become more and more necessary to meet the demand for workers and to maintain the prosperity of Europe [1]. But in view of the increasing percentage of people with immigrant backgrounds, the task of integration becomes more important. Migration has to be considered under different aspects: of these, the shrinking and ageing of the population, the integration of immigrants into society and the labour market and the recruitment of highly trained employees for certain sectors of business are crucial. The influence of immigration on the ageing of the population of Europe depends on the success of immigrants’ integration into the regular economy. Immigration can, if legally employed immigrants pay their contributions to the public pension funds, temporarily reduce the financial effects of increased ageing. Nevertheless, in the course of time, immigrants will acquire their own pension benefits; the lasting stability of public finances depends on pension schemes being based on a firm foundation. That can only be reached by overarching reforms.
State and society have to manage the pressure of immigration and the necessity to remain an efficient industrial state that copes with the requirements of global competition. Immigration policy has to be oriented towards these challenges; here, the immigration of qualified employees should be favoured. In order to maintain the population of Germany, a net immigration of 450,000 people per year would be necessary. In order to keep the age structure in the EU at the current level, 3.5 million people would have to immigrate per year. These numbers show that immigration is not the only solution to problems resulting from the demographic changes in Germany, but it can diminish its effects. It can help to partially compensate for the decreasing population until 2005 [2, p. 7], but it cannot replace economic reforms. Furthermore, immigration is an instrument for rejuvenating society, since most immigrants are younger people. They also offer higher degrees of flexibility and creativity, which could be an important impulse to innovation in the economy. Because of the decline in the potential for employment in all of Europe, an opening of the labour market towards qualified employees is necessary to compensate for the shortage of specialists in many sectors. Consequently, a convincing regional economic policy is necessary to offer attractive conditions to qualified employees.
In this context the important challenge of integration must not be disregarded. The consequences of neglecting an active integration policy have been underestimated for a long time in Europe. This is especially the case with respect to the lower-qualified immigrants. It is important, therefore, to rectify the ongoing high unemployment, insufficient language skills and failure in education. Integration means social, political and economic participation, but also partnership. Successful integration presupposes a definite legal order, the mutual acceptance of rights and duties as well as active measures in favour of equal opportunity. The need for integration should be addressed not only to immigrants, but also to the recipient society. At the centre of integration policy is facility in the host country's language. It is the absolute precondition for participation in the recipient society. Schools have a key role to play in this context. The following concrete measures have to be continued and developed: the detection of deficiencies at an early stage by proper screening procedures, systematic language teaching among nursery school children and compulsory language courses in schools. In order to effectively improve the immigrant children's language skills, the family and the social environment have also to be considered. Participation in the labour market and the educational market is another indispensable precondition for successful integration. Education policy plays an important role in this context for the improvement in professional opportunities, especially for younger immigrants. Disadvantaged younger job seekers who cannot be placed in regular apprenticeships, especially have to be promoted. Those who employ immigrants should be addressed specifically and informed, so that they can create apprenticeship training positions for youths with immigrant backgrounds. Integration can be successful only if a well-balanced social structure in the towns and cities is created by urban and residential policies and with the participation of the local community. Finally, it is important to include the local population, since integration is a project that is the responsibility of the entire society.
Furthermore, the impact of increased ageing has to be examined. A changing society has to find new ways to use the growth potential of different generations. The European Commission is right to call for a new solidarity between the generations that will accrue mutual support and the transfer of competencies and experiences. The number of young adults (25-39 years) is decreasing. This will accelerate after 2010. Between 2010 and 2030, the number will decrease by 16%. At the same time, the percentage of people over 55 will increase by 15.5% between 2010 and 2030 [2, p. 10]. Consequently, companies will have to rely more and more on the experience and qualifications of ‘elderly’ employees. In order to ensure a balance between the generations, working time has to be extended, spread over the whole life. The number of working people over the age of 55 has to be increased. Extensive reforms are necessary to eliminate the incentives for early departure from the workforce. The central question linked to the ageing of the labour force is the question of the productivity of elderly employees. In society's perception, ageing is generally linked to deficits such as a reduction in performance. According to the concept of ‘active ageing’, this discriminatory stereotype must be abandoned. In gerontology, it has been known for more than 30 years that there is no general ageing process linked to deficits; rather, the process develops differently for different people. That is why the group of elderly people is very heterogeneous. The competencies and capabilities in old age depend first of all on a person's opportunities for training and practice, the challenges being faced, as well as on the incentives to study that a person receives. Also, certain abilities like judgement, precision and thinking increase in old age–-because of the experience gained [6, p. 114].
The provision of ‘lifelong learning’ and the assurance that one has the capability to be employed are valuable for the individual, but are also important factors in economic competitiveness. In order to cope with the ageing of the workforce caused by demographic change, appropriate labour and organisational conditions within companies, as well as the possibility of continuing education and the upgrading of competencies, especially of elderly workers, have to be created. The opportunity for those workers to be employed has to be improved. A reintegration programme for older unemployed persons has to be implemented by giving information and offering consultancy services to companies. Above all, a rethinking of the entire society is necessary: elderly employees have to be regarded as capable of higher productivity because of their knowledge and experience. Especially in light of the spectacular increase in the number of very old people (80 years and older), from 18.8 million today to an expected 34.7 million in 2030 [2, p. 10], there is need for conditions to enable them to live an independent and self-determined life as long as possible. Also, the infrastructure for older people needing support must be developed. That can, for instance, be achieved with mobile care services and flat-sharing communities for seniors as well as classic nursing homes.
These social changes will also have an impact on the development of traffic patterns and transportation and are a challenge for public infrastructure. Especially in rural regions, where the decrease in population due to migration is already clearly perceptible, new solutions must be found for the maintenance of the public infrastructure. They must be adapted soon to the developments within the population, by concerted planning and intermunicipal cooperation. This is also the case with respect to construction and urban development policy. Despite the decreasing population, the number of households (with a decreasing number of persons per household) will increase. The demand on the residential market depends on the number of private households, as well as on their size and structure. Anticipatory planning and the adaptation of policies are necessary. Even in regions with a constant or increasing population, the demands for housing will change because of the demographic developments. The increasing average age has to be considered in this context. For example, it is necessary to provide a sufficient number of suitable living quarters with barrier-free access and good security.
In conclusion, in view of the complex effects of the described demographic trends, global strategy is indispensable. Both on the European and the national level, coherent reforms must be developed. Nevertheless, with all the necessary realism concerning the negative effects of the demographic alteration, the potential and opportunities resulting from the changes in society must not be ignored. The above-mentioned human and professional potential that lies within the growing elderly population has to be considered as well as the purchasing power of elderly people and the market opportunities for new products that are opened up by the ‘silver economy’. This could be an enormous competitive advantage for Europe. It is possible to benefit from these opportunities and thereby to master the coming demographic changes.
Footnotes