Falling fertility rates pose threat to government revenues
This week, Britain is baby obsessed. But amid all this fascination with the new prince, there is a bigger question that investors might do well to ponder: namely, where are babies not being born right now, in the western world?
A striking report that has just emerged from Eurostat, the European statistical agency, shows that a subtle gap has emerged in the fertility trajectory of different European countries during the past couple of decades. In regions such as Spain and Italy, fertility rates have declined sharply since the 1970s (albeit from relatively high postwar levels.) However, in the core countries of the eurozone, such as Germany and France, fertility rates have been flat or even risen.
More interesting still is the recent picture. Between 2008 and 2011 the fertility rate in Austria rose a little, while in France it stayed unchanged and in Germany and the Netherlands it declined a touch. However, the fertility rate in Spain, Greece and Ireland has notably fallen. And the contrast among some population groups is stark. In Germany, the fertility rate among unemployed women has risen since 2008, for example, perhaps because the crisis created “a window of opportunity for child-bearing”, as a research note from Jefferies, the broker suggests. “In Spain, however, the opposite has happened and the fertility rate for this group of women has actually collapsed.”
Or as a separate report from a group of German economists echoes: “The recent economic crisis has left an imprint on European period fertility patterns. For some countries, it put a halt to the positive fertility trend that had started to develop. In other countries, we see significant declines in fertility… [and] unemployment has reduced fertility in Southern Europe in particular.”
To read the full report, please click here: http://www.ft.com/intl/cms/s/0/a2088728-f544-11e2-b4f8-00144feabdc0.html#axzz2aNVogL5A