Wednesday, February 10, 2016

Some thoughts on the origins of low fertility in Germany in reactions to totalitarianism

In Europe, northern and western European countries have relatively high levels of completed fertility, higher than those of southern and eastern European countries. This is a generalization, and this generalization like all others is accurate until it is contradicted. The contradiction in this case comes clearly--and famously--from Germany, as shown in this Eurostat graphic.

This is a trend not concentrated in any one region of Germany. As the below map shows, sustained low fertility is a nation-wide trend.

One might think that fertility in Germany would look more like than in neighbouring western European countries like France and the Netherlands, or northern European countries like Denmark and Sweden. Instead, fertility in Germany has been consistently as low as--or even lower than--fertility in southern Europe. Why?

Back in 2009, I wrote a blog post called "On the contradictions between traditional family structures and high completed fertility in developed countries". In it, I briefly compared France with the former West Germany. Both territories are countries at similar levels of economic development with populations of similar size, yet completed fertility has consistently been stronger in France after the Second World War. Jean-Marie Le Goff's paper "Cohabiting unions in France and West Germany: Transitions to first birth and first marriage", in issue 7.18 of Demographic Research, examines the contrast in depth.

French total fertility rates (TFR) have traditionally been higher, on average by the value 0.3 to 0.7 since 1965 (Council of Europe, 2001). In 1965, the TFR was 2.7 in France and 2.4 in West Germany. In both countries, the TFR decreased drastically until the middle of the seventies and levelled off thereafter. In 1999, the TFR was 1.8 in France and 1.4 in West Germany. Moreover, pronounced differences in nonmarital births between France and West Germany have emerged since the beginning of the eighties. France witnessed a big increase in non-marital fertility rates; from roughly 11% in 1980 they reached 41% in 1999. In West Germany, the increase in non-marital births was less pronounced, from 8% to 18% (Council of Europe, 2001). In most developed countries, an increase in non-marital births occurred simultaneously with an increase in non-marital unions (Kiernan 2001a and b). France appears to follow this pattern, but West Germany constitutes an exceptional case.

Women in France, Le Goff argues, have access to a whole variety of family structures, from the traditional nuclear marriage family to a family marked by cohabitation to single motherhood, with a relatively long tradition of recognizing the responsibilities of parents towards their children regardless of their legal status, with the idea of mothers working outside of the home not only being accepted but supported by any number subsidies to parents to affordable and accessible day care. In West Germany, social and policy norms tend to support traditional family structures. The result? In France, people are childbearing age are split between two sectors, one defined by marriage relationships and the other defined by cohabitation relationships. On the other side of the Rhine, people of childbearing age are split between people who have children and people who don't. Katja Köppen's Second births in Western Germany and France" (Demographic Research 14.14) further points out that whereas Frenchwomen seem to enjoy an institutional structure that encourages motherhood and there isn't a contradiction between high levels of education--hence employment--and fertility, there is such a contradiction in western Germany, with government spending priorities in the latter country being directed towards the support of traditional families. It's not too much of a surprise, then, that the German Federal Statistics Office reported that the proportions of childless women were rising, particularly in the former West Germany.

The number of childless women is increasing in Germany. As reported by the Federal Statistical Office (Destatis), in 2008 21% of the women aged 40 to 44 years had not given birth to a child. By contrast, 16% of the women who were ten years older (birth cohorts from 1954 to 1958) and only 12% of the women who were 20 years older (birth cohorts from 1944 to 1948) were childless. A share of 26% of the women aged between 35 and 39 years had no children yet in 2008. However, the proportion of childless women will still decline in this age group.These and more 2008 microcensus core results regarding childlessness and births in Germany were announced today by Roderich Egeler, President of the Federal Statistical Office, at a press conference in Berlin.In the eastern part of Germany, the number of childless women is by far smaller than in western Germany. While in the ‘old’ Länder, 16% of the women aged 40 to 75 years have no children, their share amounts to only 8% in the ‘new’ Länder. Regarding younger women, too, the difference is considerable. In the ‘old’ Länder, a share of 28% of the women aged between 35 and 39 years (birth cohorts from 1969 to 1973) have no children yet, while the relevant proportion amounts to not more than 16% in the ‘new’ Länder.

In the former East Germany, where in the Communist era different and decidedly non-traditional norms of family prevailed, rates of fertility is now noticeably higher than in the West.

Why was this the case in the first place? Why was West German family policy so much more conservative than in neighbouring western and northern European countries? Why does Germany not look more like France, or perhaps more plausibly given cultural similarities the Netherlands or even Nordic countries? In West Germany, as Toshihiko Hara suggests in the paper "Fertility Trend and Family Policies in Germany, Austria, Switzerland and the Netherlands"

In Germany, any arguments and policies to promote births are tabooed still today due to nightmare memories about pro-natalistic policies which accompanied racial discrimination under the Nazi regime. For this reason, the basic stand point for family policy is that the government should be responsible for family according to constitutional prescription but act only in a subsidiary function to marriage and family and avoid any intervention in individual affairs. Thus, the family policies in former West Germany, historically have been designed to encourage and sustain the traditional, two parent family with an "at- home" mother caring for children, through financial measures to realize an equitable distribution of the burden of maintaining a family. However, with the social changes in the 1970s, i.e. legalization of abortion, the reform of divorce law, improvement of juristic status of extra-marital child, the family policy has become increasingly concerned with various family models. Then, since the 1980s, the weight of the family policy is shifting to the support for labor participation of mothers and for improving the child rearing environment, through the extended three-year parental leave with the child-rearing allowance, an acknowledgement of the rearing period in pension law and so on.

In contrast to former West Germany, the government in former East Germany performed a series of pro-natalistic policy measures from 1976 under the slogan of " build up the Socialist Nation" and they realized even a short term rise of fertility. The major purpose of this policy was to promote labor participation of women (and fertility) for expanding of labor supply source (in future) . In fact, they were supportive of labor policy rather than family policy. They have realized the high level of job participation in married women and the developed child care facilities. On the other side, they have increased the extra-marital births through the preferential dwelling support for single mothers and decreased the mean age of first marriage and birth, by giving the priority to married mother for using the child care center. These legacies remains still today in former East Germany long after unification.

A reaction, in West Germany, to the totalitarian motives of East Germany in deeply involving itself in family formation also seems to have played a role in dissuading West Germany policymakers from making institutional changes to the traditional social conservatism of the German welfare state. The eventual result of this sustained commitment to traditional family structures, as described in Jürgen Dorbritz's 2008 "Germany: Family diversity with low actual and desired fertility" (Demographic Research 19.17), was to accentuate the shift in Germany towards low fertility, with one notable theme being people who--given different policies--might have opted to form families with children in non-traditional families opting not to have children at all.

This anti-totalitarian reaction is understandable. I can readily believe that in democratic West Germany immediately after the horrors of the Second World War, the depoliticization of intimate life was a high priority. The sharp drop in fertility in Germany relative to its regional peers may well have been overdetermined. It should go without saying that keeping the reaction of the post-war years well after the reaction was useful has not been at all helpful. This can conceivably change over time, though, but there is still going to be a demographic deficit in the numbers of people of childbearing age in Germany, a consequence of the below-replacement fertility that has prevailed since the early 1970s. This will echo indefinitely, if and until we get sustained increases in completed fertility. Thus does history echo.

Saturday, February 06, 2016

"How the world went from 170 million people to 7.3 billion, in one map"

This video, publicized by Vox, does a nice job illustrating the general contours of world population growth in the past two millennia. I might find some issues with the video--population growth in the pre-Columbian Americas may be substantially underestimated--but the broad outline is correct

Tuesday, January 26, 2016

On Alberta, and Canada, after the end of the oil advantage

The collapse of oil prices worldwide has hit many oil-exporting economies hard. Here in Canada, Alberta has been hit particularly hard. A recent CBC post illustrating a Facebook post
which went viral underlines the issue.

An oilpatch worker's widely shared social media post accuses Justin Trudeau of ignoring Alberta's economic pain and pleads for help during the economic slump.

Since Lloydminster's Ken Cundliffe posted the letter on Jan. 10, it has been shared thousands of times.

"Since you will not acknowledge what the low oil prices have done to our own people, I will," wrote Cundliffe, an operator with Husky Oil. "It's hard to say in words how scared and desperate people are becoming."

The letter paints a dire picture of layoffs and unemployment insurance running out for many, alongside a jump in theft and suicide rates.

"Alberta has not taken an equalization payment for over 50 years and has done more than its fair share in supporting the East in that time. Now that the Alberta economy is struggling due to low oil prices, why do you refuse to acknowledge the problem?" he wrote, questioning why the Liberal government has given away "BILLIONS of Canadian taxpayer dollars to other countries."

"Please start helping our own people through these tough times," the letter urged.

Some might disagree with the angst, but the scale of the collapse is real. Jason Markusoff's article in MacLean's, "The death of the Alberta dream", outlines the scale of Alberta's issues.

the great oil rout of 2014-15 seemed, at least at first, to be following a similar pattern to other busts. Some big oil sands projects get delayed, rig and well activity shrivels and Employment Insurance rolls spike, leading to knock-on effects: Calgary towers thin out, the real estate market softens, and cuts spread to everything from shops to restaurants. Yet past plunges were reliably followed by a bungee-like snap back in growth, as oil prices regained their upward momentum. It’s a pattern a generation of Albertans has come to expect, after the 1998 Asian financial crisis, the 9/11 terrorism shock and the 2008 financial crisis.

But the broad optimism of early 2015 has gradually given way to dread. This feels more like the awful 1980s, with no swift recovery to come—not in a world glutted by oil, as Saudi Arabia battles to squeeze out higher-cost producers like Russia and the United States. Before Christmas 2014, as prices thudded from above US$100 per barrel to below US$60 for the first time since the Great Recession, oilpatch observers wondered how soon US$80 oil would return. Instead, the OPEC cartel’s decision to keep pumping, and the surprising resilience of U.S. producers, have pushed oil down to below US$40.

Energy companies are preparing for a grim 2016. Analysts predict budgets will get slashed further, and that more energy firms may have to cut staff, having already laid off thousands. Ongoing oil sands construction projects will continue to wind down with little to replace them, hitting both the residential and commercial real estate sectors hard. For instance, in nearly one-sixth of all the office space in downtown Calgary, the fluorescent lights now shine on empty cubicles, and it’s forecast to get worse. Reports of the symptoms pop up almost daily: more insolvencies, more business for moving trucks and repo crews, even a noticeable uptick in suicides. The Calgary Stampede itself has been forced to lay off staff, as its offseason event bookings dried up. In November, the Alberta unemployment rate came within one-tenth of a percentage point of the national average, the closest it’s been since 1989. Those trend lines are expected to cross over next year, making it more clear to Canadian job-seekers that the Alberta dream is in decline.

The rest of the country isn’t immune from those ominous grinding sounds coming from Canada’s longtime economic engine. Canadian GDP dipped into recession territory in the first half of 2015 on the oil shock, and though the country managed a rebound in the third quarter, Alberta’s troubles—as well as slumps in other oil-rich provinces like Saskatchewan and Newfoundland—have left a gaping wound. The energy sector had long driven Canada’s trade surplus, papering over weakness elsewhere while soaking up large numbers of unemployed and underemployed people from regions like the Maritimes and hard-hit southwestern Ontario. Many economists predict a gradual rebound, but nothing head and shoulders above national growth rates, as had been typical for Alberta. “Average growth” is an unfamiliar term in Alberta, and will take some getting used to.

But even average growth seems a ways off, as troubles keep filtering through the province. In Alberta’s southeast, Medicine Hat drew international acclaim in the spring of 2015 after it became the first city in Canada to eliminate homelessness, having pursued an ambitious five-year agenda to put people into subsidized housing within 10 days of them landing in emergency shelters. After so much progress, Medicine Hat’s Salvation Army shelter is back to averaging 17 clients a night, up about one-third since 2014—too many to promptly find them all affordable housing. Local demand for donated clothing and household items also rose by more than a quarter over the last year, says manager Murray Jaster. But donations slumped too, and he had to reduce staff. When he’s out along the Trans-Canada Highway that dissects Medicine Hat, Jaster has noticed more hitchhikers than he’s seen in years—people looking to take the long road home, or perhaps to wherever in Canada the jobs may be. “Man, we’re a have-not province all of a sudden,” Jaster says. “Who can believe it? I can’t.”

As Toronto Star writer Antonia Zerbiasias noted in her "Ottawa’s focus on Alberta oilsands is killing manufacturing jobs in Eastern Canada, economists say", many of these returning migrants won't find jobs at home. The high Canadian dollar of previous years, sustained by high oil prices, may have inflicted Dutch disease on the Canadian industrial sector.

In his report, Coulombe and his co-researchers determined that our petro-currency was responsible for 42 per cent of job losses between 2002 and 2007. That translates to at least 140,000 manufacturing jobs gone as a direct result of the oilsands development.

It didn’t get any better after that. Our manufactured exports dropped another 12.6 per cent between the second quarter of 2007 and the first quarter of 2011.

If Dutch Disease is allowed to spread, Coulombe and other economists warn, Canada’s ailing manufacturing sector will face still more job losses, while consumers, farmers and non-oil producing industries will feel increasing pain through inflation and gas prices at the pump.

The long-unprofitable oilsands, which require the expensive and water-intense extraction of tarry bitumen, suddenly became economically feasible.

That increased oilsands development boosted crude exports. By 2006, oil became our biggest export, displacing autos and auto parts. The loonie surged against the weakening U.S. dollar. That made our manufactured exports — long dependent on a low Canadian dollar — more expensive. And that cost factory workers jobs.

Over the past year, alarm bells have been sounding.

As noted by the CBC in relation to the Atlantic Canadian province of Nova Scotia, the returned workers have nothing to look forward to but lower incomes and higher levels of unemployment. Some local companies have taken advantage of the returnees to alleviate worker shortages, but this cannot be a general solution.

What next? I, personally, am not sure I want to know.