The demographic decline is not a European fatality

The demographic decline is not a European fatality

Eurostat predictions show very interesting demographic trends that will shake the balance of power of the EU away from Germany and onto France and the United Kingdom thanks to fertility policies.  

European overview

Between 2010 and 2060, the EU's population will grow by 16 million inhabitants - however, Germany's population will shrink by 15 million inhabitants.  The two countries that will see their population grow the most in absolute numbers are France (9 millions) and the United Kingdom (17 millions).  As a result, the population ranking of Germany and the United Kingdom switch, making the United Kingdom first and Germany third in the Europe of 2060.

It is commonly thought that Germany is swarmed with immigrants: in the 2010-2060 period, Germany’s 0,13% net migration rate is much below the European Union’s average of 0,21%.  Germany ranks 18^th in terms of net migration as a percentage of population, much behind the 6^th position of German-speaking Austria.

On the fertility front, Germany’s improvement of its fertility rate over the 2010-2060 period places it 4^th in the European Union.  However, both its 2010 fertility rate of 1,36 and its 2060 fertility rate of 1,54 placed it 24^th in the EU: today, Germany is lagging behind too much to catch other EU countries up. 

France has a low net migration (0,11% average for 2010-2060, 19^th lowest in the EU) but benefits from second highest 2010 fertility rate in the EU at exactly 2.  The United Kingdom is ranked 3^rd for its 2010 1,94 fertility rate and has an average net migration of 0,24%, giving it the 13^th rank. 

If Poland followed the example the United Kingdom, its population would be 48 million high – however, as it imitates Germany by having a very low fertility rate and a low net migration, its population will drop, going from 38 to 33 millions.  However, it will remain firmly in 6^th place, although it will then lag 20 million inhabitants behind Spain rather than the current 8 millions. 

What does it mean for public policy?

An ageing population is often seen as a fatality that all Western countries will suffer.  However, some countries will not face a demographic decline as their policies are better-adapted and stimulate their population’s fertility rate.  Oddly, generous maternity programs are seen as being overly generous and socialistic.  However, countries that are not able to at least maintain their population level will face harsh pressures on their public debt: for instance, Germany’s debt as a percentage of its GDP will grow by 19% just by the sheer pressure of its demographic decline.  Are family-promoting policies bad for public finances?  Apparently not.  The Europe of 2060 is likely to see the economic triumph of social democracies that avoided a demographic decline. 

Data

You may download the complete data used for writing this article in Excel format.  

Source: Eurostat.  Assumptions [proj_10c2150a] and 1st January population by sex and 5-year age groups [proj_10c2150p]