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The Cost of Low Fertility in Europe

  • David E. BloomEmail author
  • David Canning
  • Günther Fink
  • Jocelyn E. Finlay
Article

Abstract

We analyze the effect of fertility on income per capita with a particular focus on the experience of Europe. For European countries with below-replacement fertility, the cost of continued low fertility will only be observed in the long run. We show that in the short run, a fall in the fertility rate will lower the youth dependency ratio and increase the working-age share, thus raising income per capita. In the long run, however, the burden of old-age dependency dominates the youth dependency decline, and continued low fertility will lead to small working-age shares in the absence of large migration inflows. We show that the currently very high working-age shares generated by the recent declines in fertility and migration inflows are not sustainable, and that significant drops in the relative size of the working-age population should be expected. Without substantial adjustments in labor force participation or migration policies, the potential negative repercussions on the European economy are large.

Keywords

Fertility Population dynamics Economic growth 

Le coût de la basse fécondité en Europe

Résumé

Nous analysons l’effet de la fécondité sur le revenu par habitant, avec un intérêt particulier pour le contexte européen. Pour les pays européens avec une fécondité inférieure au seuil de remplacement, le coût de la baisse continue de la fécondité ne pourra être apprécié que sur le long terme. A court terme, nous démontrons que la baisse de la fécondité réduira le rapport de dépendance des jeunes et élèvera la part de la population d’âge actif, ce qui entraînera une hausse du revenu par habitant. A long terme, le fardeau de la dépendance des personnes âgées pèsera toutefois plus que la baisse de la dépendance des jeunes, et la poursuite de la chute de la fécondité conduira à un abaissement de la part de la population d’âge actif, en l’absence de mouvements migratoires de grande ampleur. L’étude apporte la preuve que la part très importante de la population active résultant du déclin récent de la fécondité ne pourra pas se maintenir, et que des baisses significatives de cette part sont à prévoir. Si des ajustements importants en matière de participation au marché du travail ou de politiques migratoires ne sont pas mis en œuvre, les répercussions négatives sur l’économie européenne pourraient être considérables.

Mots-clés

Fécondité Dynamique des populations Croissance économique 

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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • David E. Bloom
    • 1
    Email author
  • David Canning
    • 1
  • Günther Fink
    • 1
  • Jocelyn E. Finlay
    • 1
  1. 1.Harvard School of Public Health, Program on the Global Demography of AgingCambridgeUSA

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