GUEST COLUMN: European recession can be seen in declining birth rates
Generous and consistent family planning programmes have thus far saved Finland from a shortage of babies
By Anna Rotkirch
The world's developed nations were surprised by an unexpected turnaround in the last decade: After a long period of decline, the birth rate slowly began to rise.
Some countries, like France, started having a birth rate that approached the population replacement level; over two children per woman. Some hailed this change as the new population trend.
Then the economy collapsed in 2008, and this was followed by years of insecurity, unemployment, and cuts in public expenditure.
This has, for the time being, put a halt to the growth in the birth rate.
According to the most recent data from Statistics Finland, there were roughly 1,000 fewer children born in Finland in 2011 than there were the previous year.
This is a small change that can be accounted for in terms of the standard deviation that has occurred since the 1970s in a time of modest population growth.
Still, this development is a sudden turn away from the steady growth in numbers that has been recorded in the last few years.
Finns firmly believe that an economic recession is a fine time to make more babies.
During the bleakest years of our own economic recession in the 1990's, the birth rate in Finland actually grew.
This, however, is the bizarre exception, and certainly not the norm among Finland's European peers.
A basic rule of thumb is that when the economy is doing well, people are a little more enthusiastic about having children, and when it tanks, so does their enthusiasm.
Over the last thirty years, the birth rate has declined more often and more severely in countries that have experienced a recession.
In the year following a recession, the birth rate continued to decline in four out of five OECD countries.
After a year of economic growth, in only one out of two countries were fewer babies born.
In their recent study, Tomas Sobotka, Vegard Skirbekk and Dimiter Philipov concluded that a recession has a delayed effect on fertility rates, usually affecting birth rates a few years down the track.
Recessions have an especially profound effect on the families that are just being formed - influencing the decision to tie the knot and to have a first or second child.
The same pattern is repeating itself in this recession, too.
In the European Union, unemployment declined in 2007 and birth rates rose in 2008. In 2008, unemployment rose, and in 2009, the birth rate fell.
If an economic crisis is only short-lived, it doesn't necessarily impact on long-term birth rates.
People simply postpone the acquisition of children until their finances are more secure. This is especially true for highly educated women.
In Western Europe, a woman is, on average, already almost thirty when she gives birth to her first child.
Hence many women simply don't have that many years to wait around for the economy to turn, especially if they intend to have more than one child.
Owing to this fact, it is not possible as yet to know how much the current economic recession will impact the long-term birth rate.
Unemployment and consumer confidence have the largest impact on the birth rate.
In the last few years, the birth rates in Hungary, Latvia and Spain, to name but a few, have declined between 5 and 8%.
The same kind of development is expected across Southern Europe in the coming years. Continued drastic unemployment rates, insecure work relations, lack of prospects, and cuts in family benefits delay the age at which young people become independent and ready to establish a family.
Especially for men, the lack of jobs and adequate income makes forming a family more difficult.
In many countries, Finland included, male income and education levels have a direct correlation with the birth rate.
Poor and unemployed men are at the greatest risk of remaining without a partner and children.
The majority of both men and women want children, however.
So when a young man becomes alienated from the workforce, he is also alienated from the market for potential families.
It is estimated that a 10 percent rise in consumer confidence results in a 1.5 percent rise in the birth rate, and that this occurs after a little over two years.
The opposite can also be assumed to occur, as the birth rate is more sensitive to negative than it is to positive stimuli.
Finnish data shows us that consumer confidence declined by over 20% in 2008.
Two years down the line, the birth rate declined by about 1.7 percent.
The recession lowered the birth rate even in Finland [which comes as a surprise to many Finns], but the decrease could have been that much greater.
It seems that steady family benefits saved Finns from a larger shock.
In this sense, social policy can be seen to diminish the blow of a recession.
A prime example of this is the 1990s in Finland. The fact that Finns produced a surprisingly large amount of babies during the recession years is explained by successful family planning policy.
Before the recession hit, new policies had been written, granting families benefits such as household allowance and a universal right to children's daycare.
A generous family policy can spare communities from the blows of a short recession.
For example, Iceland - which suffered one of the most violent financial slumps in Europe recently - hardly experienced any change in their national birth rate.
Generous and consistent policies that favour families are correlated to higher birth rates in the developed world in the longer term, too.
The general expectation of the public has a significant role in tweaking the birth rate. Young adults are sensitive to even the smallest gestures that indicate how willing their society is to support them.
The multifaceted and functioning family-leave system and support packages should not be unravelled - especially not for the sake of short-term savings and without public debate or a full understanding on the implications of such changes.
Helsingin Sanomat / First published in print on 14.5.2012
Anna Rotkirch is the Director of the Population Research Institute at the Finnish Family Federation.
Previously in HS International Edition:
Shortening child home care allowance period would make for congestion at daycare centres (5.3.2012)
Government considering shortening child home care allowance period (2.3.2012)
Surge in births has ground to a halt (13.4.2012)
Population Research Institute