The Cost of Low Fertility in Europe / David E. Bloom, David Canning, Günther Fink, Jocelyn E. Finlay.

Format:

Book

Author/Creator:

Bloom, David E.

Contributor:

National Bureau of Economic Research.

Canning, David.

Fink, Günther.

Finlay, Jocelyn E.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14820.

NBER working paper series no. w14820

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

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.

Notes:

Print version record

March 2009.