terça-feira, 28 de setembro de 2010

Demography and the Future of Europe*

by José Ramos-Ascensão**

As the school year starts in Portugal this month, 701 primary schools will have their doors closed. The initial forecast of the Government suggested that around 500 schools, each with less than 21 pupils, would be closed. Maternity hospitals are also being closed all over the country.

These are only some of the impacts of the so-called demographic transition, or change, or more dramatically, the demographic challenge, implosion, or indeed demographic winter, that is devastating, not only Portugal, but all of Europe.

In the course of the next few minutes I will try to review the actual situation, its causes and its consequences, as well as to explore some of the solutions that have been proposed. Because the original title of this conference questioned the existence of an “anti-birth” mentality in Europe, I will pay special attention to the low fertility aspects of the demographic issue. Whenever appropriate, I will duly make reference to Caritas in Veritate which sheds some light on this issue. Actually, it is Pope Benedict VI who says herein that “coherence does not mean a closed system: on the contrary, it means dynamic faithfulness to a light received. The Church's social doctrine illuminates with an unchanging light the new problems that are constantly emerging” (no. 12).

As a result of increased longevity and lower fertility, Europe is ageing. The age pyramid is turning upside down. The absolute number of children is projected to decline gradually from 2020 onwards. Half of the population today is 40 years-old or more[1]. In 2060, half of the population will be aged 48 years or over. The number of elderly persons aged 65 or more already surpassed the number of children (those below 15) in 2008; but, in 2060, there will be more than twice as many elderly than children. In 2008, there were about three and a half times as many children as very old people (that is, those over 80). In 2060, children would still outnumber the very old, but only by a small margin.

Although a modest recovery in the total fertility rate is foreseen on a 50-year projection, that would not be sufficient, in all EU countries, to achieve the natural replacement rate of 2.1 births per woman.

The population of working-age had already started to decline in 2010; but by 2060 it will have fallen by 15 per cent in the EU as a whole. And although there is a projected increase in the labour participation rate - due mostly to an increase in the participation of older workers aged between 55 and 64 - a decline in the labour supply and in the labour input (that is, hours of work) will lead to a doubling of the old-age dependency ratio.

With the current legislation enacted, the population would peak by 2035, due mostly to immigration, but then the impact of immigration will disappear and a steady decline will take place, although with important differences among countries.

The underlying causes of this situation, particularly of low fertility, are multiple and complex. Family instability, the falling marriage rate and increasing divorce help to explain it. One out of every two marriages ends in divorce (in some countries, one of which is Belgium, it is 2 out of 3). This marital breakdown rate has doubled in about 25 years (that is, from 1980 to 2006).

Young adults are entering later into the labour market, because of studying longer, for example, and average age of motherhood jumped from 27.1 years in 1980 to 29.7 in 2006 (in other words, by more than two and a half years in the period!). This is due also to such factors as job instability at a time characterized by unusual economic and social uncertainties, pessimism regarding the future, the high cost of quality child education, and even the lack and cost of appropriate housing, with young couples being forced out to the suburbs, with a negative impact on their mobility, and far distant from an available network of informal care services.

But these study, working and family life contingencies and choices are also linked with life-styles and mindsets that are not conducive to assuming family responsibilities. A child, after all, is a lifelong bond.

The dominant culture is individualist, hedonist, consumerist. It is not now a predominantly Malthusian anti-birth culture, but rather a culture of women’s rights, such as so-called sexual and reproductive rights, that include the so-called right to abortion and to contraception. Human life is undervalued in this “culture of death” and a “safe-sex ideology” – safe from diseases, but also ‘safe’ from pregnancies – is inculcated in our children through sex education in the schoolroom. A widespread contraceptive mentality and behavior disconnects human sexuality from its procreative dimension, reflecting a reluctance to mutual self-giving by the spouses.

The consequences of the present situation are evident. Caritas in Veritate calls attention to the fact that “formerly prosperous nations are presently passing through a phase of uncertainty and in some cases decline, precisely because of their falling birth rates; this has become a crucial problem for highly affluent societies. The decline in births, falling at times beneath the so-called ‘replacement level’, also puts a strain on social welfare systems, increases their cost, eats into savings and hence the financial resources needed for investment, reduces the availability of qualified labourers, and narrows the ‘brain pool’ upon which nations can draw for their needs. Furthermore, smaller and at times miniscule families run the risk of impoverishing social relations, and failing to ensure effective forms of solidarity.” (no. 44).

European structural weakness is revealed by this simple fact: a century ago 15% of the world’s population lived in the area which is now correspondent to the EU-25; today this share is about half of that, and in the year 2050, it will be just a third.

Even without taking into account the potential negative impact of the current economic crisis, the annual average potential GDP growth rate in the EU is projected to fall to a meager 1.3% in the period 2041-2060. This is most disturbing when we consider that “man is constitutionally oriented towards ‘being more’ ”, as it is stated in the Encyclical (no. 14). In other words, development pertains to human nature.

Furthermore, long-term fiscal sustainability is being put at risk. On the basis of current policies, age-related public expenditure – that is, expenditures on pensions, healthcare, long-term care – is projected to increase on average by about four and three-quarter percentage points of GDP in the EU by 2060. Of course, we ought to consider as well the potential offsetting savings in public spending on education and unemployment benefits, but these are likely to be very limited (-0.4% of GDP). Nevertheless, these numbers should be broken down and examined in finer detail because there are considerable differences between Member States.

Anyhow, a further strain will be put on the productive, private sector where, at the end of the day, the resources will have to be found. The alternative is a clear restraint on the levels of social protection, with the fading of the European model of a social market economy: the vulnerability of the elderly would increase.

Living standards will therefore most probably be affected as each worker has to provide for the consumption needs of a growing number of elderly dependents. But the doubling of the old-age dependency ratio has also another even more drastic effect: namely, a likely exacerbation of social tension and conflict, putting more stress on social cohesion.

Finally, with an ageing population, serious issues of justice regarding the allocation of healthcare resources may also rise, with particular relevance when it comes to the case for legalizing euthanasia, for example.

When it comes to solutions, one thing is clear: coping with the challenge posed by an ageing population will require determined policy action.

Since 1997, the European institutions and specially the European Commission have issued a number of documents on the subject. In a 2006 Communication (called “The demographic future of Europe – from challenge to opportunity”), which followed a Green Paper of 2005 called “Confronting demographic change: a new solidarity between generations”, the Commission proposed five key areas for policy responses: i) promoting demographic renewal; ii) promoting employment (more jobs and longer working lives); iii) a more productive and dynamic Europe; iv) receiving and integrating migrants; and v) sustainable public finances to guarantee adequate social protection and equity between generations. Forums, platforms, surveys, reports, have been edited and regularly re-edited to appraise the new developments in research and the evolution of the demographic and family situation across Europe, assess its risks, and to exchange best practices.

At the EU level, the causes are identified, the consequences are foreseen, but when proposing solutions, sometimes attention is diverted to attacking the consequences or less important causes of the problem, instead of tackling low fertility itself. Reducing debt, raising employment rates and productivity, reforming pension, healthcare and long-term care systems, receiving and integrating migrants, these are certainly important policy goals, but they are linked with realities derived, at least partially, from the demographic problem itself.

In 2007, the European Economic and Social Committee contributed to the debate by issuing an Opinion on “The family and demographic change” and calling for the Member States to sign a “European Pact for the Family”.

The EU rightly starts from a recognition that the decision to have children is a private matter, and that the scope of policy is to enable couples to make their own choices with regard to the number of children they want to have. This approach is demanded by respect for freedom and for subsidiarity. Surveys suggest that Europeans generally would like to have more children than they actually have. In almost all EU countries, the number of desired children exceeds the replacement level. Responsible procreation is part of the Church’s teaching and is considered in Caritas in Veritate to be “a positive contribution to make to integral human development” (no. 44). What is up to the public authorities is to reinforce the incentives for making these choices, and to foster the best conditions for couples to exercise such responsible parenting.

Some of the policies which are promoted are undoubtedly pointing in the right direction: reconciliation of work and family life is an example. However, fostering the provision of formal childcare services (and care services for the elderly and other dependent people), outside one’s home, should not impede a recognition of the social, economic and educational value of informal family work. Financial support for a parent to take care of their children at home (which goes beyond extended maternity and paternity leaves), or for childminding by a grandparent, who would therefore keep active, would be more advisable, from the perspectives of both subsidiarity and intergenerational solidarity. As has already been called for in a Resolution of 2008 of the European Parliament, Member States should examine the possibility of recognizing length of service, social security and pension rights for those who carry out such family work.
One must keep in mind that in demographic policy, more than in other policies in general, it is the structural, long term perspective that makes much sense. Migration is not a long term solution (and it also raises problems of integration and the question of social cohesion in a multicultural society); neither is easy access to in vitro fertilization, whose diverse ethical difficulties are also well expressed in Caritas in Veritate.

Many other policy measures could be mentioned here: regarding, for example, fields as diverse as urbanism, mobility, VAT, education. It is extremely important to reduce the costs of education supported by the parents, not necessarily by public provision– as it is most important to ensure subsidiarity and pluralism through freedom in education. Nevertheless, it is true that there are reasons supporting public funding of education, at least at the primary level.
COMECE has already contributed some suggestions for policy measures, namely the ones included in our document of 2007 called “Proposal for a Strategy of the European Union for the Support of Marriage and Family”.

In general, however, policies and legislation should attend to five requisites.
First, they should promote adequate incentives or at least not produce distortions or convey wrong signals to society. For instance, cohabitation, divorce, abortion, should not be promoted by permissive, facilitating legislation that sanctions the very mentality that fragments values such as family and human life.

Notwithstanding the clear correlation between financial benefits per child and the number of children a couple has – and without questioning, for instance, that social assistance, including financial support to pregnant women, is certainly an advisable measure to avert abortion –, it is worth saying that before considering incentives the public authorities should work towards guaranteeing at least policy neutrality. Tax law, for example, should not discriminate against couples, married people or large families vis a vis singles, couples in cohabitation or divorced, and childless or one-child families. Which leads us to the second requisite.

Policies and legislation should respect the principle of subsidiarity. Besides what has been already said on this principle, it is important to bear in mind what is stated in the Encyclical: The principle of subsidiarity must remain closely linked to the principle of solidarity and vice versa, since the former without the latter gives way to social privatism, while the latter without the former gives way to paternalist social assistance that is demeaning to those in need” (no. 57). Only when the couples, the family, are unable to perform their natural functions, should the public authorities intervene. In the words of Pope Benedict VI, the principle of subsidiarity is “an expression of inalienable human freedom” (no. 57).

Thirdly, policies and legislation should be transversal; the causes of the problem are multiple, so family and demographic policies must tackle a broad set of public measures – the larger picture should always be kept in mind.

Fourthly, participation: pro-family associations and federations, in particular, should be listened to and involved in policy definition and in the preparation of legislation.

Lastly, and in line with what has already been said, policies and legislation should be long-term oriented and stable, resistant to economic cycles.

One final word specifically on family policy.

Demographic policies should not be isolated from family policies and this must also be taken into account by the EU, although such policies are not within its sphere of competence. Society is built up from families. The family, based on the marriage of husband and wife, is best fitted for the success of marital life, parenthood and development of the children. It is best in performing the natural functions of the family: supplying human capital, the ultimate source of prosperity in a society, fostering social solidarity and emotional stability, transmitting values such as respect. It is imperative that the political actors recognize its social effectiveness: other familial structures are intrinsically more unstable and represent higher social risks – risk of poverty, exclusion, school drop-out, poorer health, lower skills. Family structure is not indifferent to the best interests of the child.

Pope Benedict VI, in Caritas in Veritate, states clearly that “it is thus becoming a social and even economic necessity once more to hold up to future generations the beauty of marriage and the family, and the fact that these institutions correspond to the deepest needs and dignity of the person. In view of this, States are called to enact policies promoting the centrality and the integrity of the family founded on marriage between a man and a woman, the primary vital cell of society” (no. 44).

Family mainstreaming, meaning in the first place the process of identifying the implications for families of any planned action, including legislation, policies or programmes, should be promoted both at EU and Member State levels.

In conclusion, one can say: demogaphy is not destiny.
As was stated in COMECE’s document of 2007 which I have already mentioned, we must create once again a “climate of joy and confidence in life, a climate in which children are not seen as a burden, but rather as a gift for all”.

Or, as Caritas in Veritatis puts it, “on this earth there is room for everyone: here the entire human family must find the resources to live with dignity, through the help of nature itself — God's gift to his children — and through hard work and creativity.” (no. 50).

* Speech at the “Conference on the Encyclical ‘Caritas in Veritate’ from the Perspective of Politics, Economics and Theology” promoted by the EPP Group in the European Parliament on 14 September 2010.
** Legal adviser, COMECE (Commission of the Bishops’ Conferences of the European Union).
[1] The text of this speech includes direct quotations from official documents. I also take the opportunity to gratefully acknowledge that European Commission’s The 2009 Ageing Report: economic and budgetary projections for the EU-27 Member States (2008-2060), of 2009, was the source for much of the quoted data in the speech.