OXPOP Oxford Centre for Population Studies Working Paper Series no. 22 Responses to Population Ageing: Lessons from Europe? (Published 2003 in the ‘Proceedings of the Seminar on Low Fertility and Rapid Ageing' Seoul, Korea. National Statistical Office and the Population Association of Korea. pp 83 - 110.)

David Coleman, Professor of Demography, University of Oxford Department of Social Policy and Social Work Barnett House, 32 Wellington Square Oxford OX1 2ER +44 (0)1865 270345 tel +44 (0)1865 270324 fax david./[email protected] http://www.apsoc.ox.ac.uk/oxpop

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Low Fertility and Rapid Ageing in Korea: Demography, Analytical Tools, and Socioeconomic Issues. October 31, 2003, Grand Intercontinental, Seoul, Korea 11:00-12:00 Session: Analytical Tools

Responses to Population Ageing: Lessons from Europe? David Coleman St John’s College, University of Oxford [email protected] http://www.apsoc.ox.ac.uk/oxpop/

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Introduction In this paper I review some responses to population ageing in Europe and other Western countries to see if they may have any relevance to the situation in Korea. While Korea preserves its own unique political, economic and cultural characteristics, it is clearly heading along approximately the same trajectory of population ageing as the rest of the industrial world. But as Korea is at a relatively early stage of this process, it might be worthwhile looking at the experiences of those populations, which have traveled further down the same path. At the very least it may be possible to conclude which of the perceptions and proposals made in Europe are well founded on demographic and economic principles, and which are delusions, without making any presumptions about applying European lessons to Korea’s specific issues. I will consider briefly how Korea compares with Europe, review critically the assumptions behind current concerns, and then consider what demographic and non-demographic ‘solutions’, or at least responses, are available. Comparisons with Europe Europe comprises a very diverse set of populations, despite the effects and the intentions of the European Union. Central and Eastern Europe will not be considered here at all. Most of those populations share a distinctive traditional demographic regime, now overlaid with the demographic hangover from communism and the demographic confusion arising from recent economic and political turmoil. To the west of the former Iron Curtain, great demographic diversity still persists. It has generally been assumed that for a variety of economic, political and cultural reasons, that Western populations will converge on a similar set of institutions and on a common demographic regime. So far, this expectation has not been supported by the empirical evidence (Coleman 2002a). We must therefore be specific about which of these diverse populations might most usefully be compared with the Korean situation. In broad terms, the populations of ‘Western’ Europe sort themselves into three geographical clusters on demographic criteria. NW Europe, including Scandinavia, France and the United Kingdom, preserve relatively high and in some cases increasing birth rates, high proportions of births outside marriage and somewhat atomised household structures, with high proportions of single-person households and relatively few complex households with co-resident married children and older parents. Welfare and family policy is well-developed. The more central Germanicspeaking populations are intermediate in these respects. Southern Europe maintains the lowest levels of fertility while preserving more traditional family structures. There, cohabitation and illegitimacy rates are low or very low, and complex households more common, than in the North-West of Europe. Family policy is relatively undeveloped and gender roles remain differentiated. In all these respects, Korea, like the other industrialised countries of Asia, more closely resembles the ‘Southern European’ category and has moved closer to those countries as its mortality levels have improved during the 1990s. Korea and Southern Europe share exceptionally low birth rates and low teenage fertility; despite great cultural differences they share a ‘familist’ culture with a relatively high proportion of three-generation households; like Southern Europe, Korea has not embraced the attractions of the ‘second demographic transition’ in the form of elevated levels of cohabitation and illegitimacy. Also like those European countries, Korea faces the 3

fastest pace of population ageing, the most imminent prospect of population decline and the most substantial political and cultural obstacles to the more expensive family polices and reform of gender relations which may be essential if their birth rates are to increase. Contrary concerns The background paper to this meeting: ‘Perspectives on Low fertility and Rapid Ageing’ was most illuminating. In commenting on the need for a family-friendly policy in Korea it also noted that ‘some Korean demographers argue that the antinatalist policies are still necessary in Korea because the nation is one of the most densely populated countries where many couples (wish to avoid) unwanted, unexpected, or untimely births’. These positions are by no means incompatible. A practical and ethical pre-requisite of any family-friendly policy intended to facilitate women’s desire for children and simultaneously encourage a more benign demographic regime must be the achievement of full control over fertility, so that every child is wanted and cherished. There can be no future in modern democratic societies for policies which attempt to restrict access to family planning or abortion in order to force up birth rates. Pronatalist results cannot depend on the continued production of unwanted children, not the least because the lives of such children, and of their parents, are handicapped by the circumstances of their birth. Insofar as unplanned or unwanted childbearing in Korea persists, it constitutes a welfare problem which needs attention. By the same token, if women are not having the number of children that they say they would like to have by a substantial margin, then that possible ’unmet demand’ for children also constitutes a welfare problem demanding attention. It is one with substantial implications for the national future. To varying degrees, this dual problem persists in many Western countries. There are great difficulties in defining desired family size, and ‘unwanted’ children (whether unwanted in respect of their timing or altogether). Nonetheless it has been estimated that up to 25% of children in some western societies are unplanned or unwanted, at least in respect of their timing, and that there is still a modest unmet need for contraception (Klijzing 2000), even though current usage is generally about 70% and ever-usage 90% . Teenage childbearing, undesirable under almost any circumstances, is a prevalent problem in the UK and in the US, and not just among their ethnic minority populations. Almost all these births are outside marriage. In Britain and even more in the US, most are to lone mothers lacking partners and any means of support other than welfare. These are extreme examples, but in other European countries as well a need to reduce such premature and unplanned childbearing co-exists with a long-term need to facilitate wanted births. With Korean period total fertility below 1.2 in 2002, it is difficult to see how a modest increase in wanted births could promote or exacerbate environmental difficulties. In the UK and elsewhere, environmental groups such as the Optimum Population Trust (Willey 2000) urge rapid and substantial population decline to an ‘optimum’ of 30 million (compared with today’s 60 million). They oppose family-friendly policies insofar as they might retard such outcomes. Many people (including this writer) sympathise with the notion that population growth is currently too high and that there would be benefits from a smaller population, without having much faith in the

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‘optimum’ concept. But for obvious demographic reasons, rapid population change in any direction is undesirable because of the distorted age-structures thereby created, which last for decades, and the serious mismatch which inevitably arises between population and the available infrastructure, which is either over-strained or made redundant. Who’s afraid of population decline? Before the eighteenth century, European and other countries often experienced population decline or stability, between periods of growth. Then population growth became the norm, and we have taken continued growth, and its supposed merits, for granted. That era of growth is ending. In Europe, population decline is expected to become general by the mid-twenty-first century, and by the end of the century, global population itself may be falling. The only general exceptions are those cases such as the US and the UK where growth is increasing thanks to record levels of immigration. Nonetheless influential bodies persist in assuming that population decline is ipso facto undesirable, for example the UN Report on Replacement Migration (2000). These notions reflect transatlantic rather than universal Western concerns; population stabilisation or reduction may be contrary to the American dream but it may be regarded with equanimity elsewhere. It is true that ‘Malthusian’ views do not find favour among some European opinion, notably in France (Chesnais, 1995). However the last official report on population in the UK (Population Panel 1973) welcomed the prospect of an end to growth. In Germany, too, the management of population decline has been discussed with equanimity by authoritative sources (Höhn, 1990). The government of the Netherlands has in the past defined the end of growth as a long-term policy aim. For example the report of the Dutch Royal Commission on Population 1977 stated that ‘termination of natural population growth is desirable and possible as a consequence of below replacement fertility as expected in the official population projections. However, government should not lose sight of reaching, in due time, a more or less stationary population situation which could imply that in the longer term government should promote fertility stabilising on a level guaranteeing the replacement of successive generations’. The Dutch government response (Tweede Kamer der Staten Generaal 1983) concluded that ‘Continuing population growth will have an adverse effect on the well-being of the nation, and therefore the perspective of growth coming to an end as a consequence of below-replacement fertility….. is welcomed’ ( both quotations translated and summarised by van den Brekel and van de Kaa (1994), pp. 234 – 236). More recent official Dutch statements still maintain the view that ‘in the longer run a stationary population is viewed as desirable’ (Government of the Netherlands 1998 p 9). Even in the United States, the report of the Commission on Population Growth and the American Future (1972) saw an end to U.S. population growth, although not a decline, as on balance, advantageous. In the US, in Australia and other countries environmental activists and others continue to argue the ecological benefits of lower population size, arguing from considerations of sustainable environmental footprint (the area of land needed to sustain the current consumption or lifestyle of an particular community or country). While many are sympathetic to the notion of the benefit of a smaller population, the definition of ‘optimum population’ has so far defied any consensus. The economic and social consequences of population stabilization and decline (as opposed to population

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ageing) are seriously under-researched, and seem to have received little systematic attention since the time of Reddaway (1938). While population decline brings problems, it may be also be argued that a smaller but stable population, once achieved, has advantages. Problems of overcrowding are ameliorated and the environment is potentially better protected. Unsatisfactory infrastructure, notably urban housing, hastily constructed to accommodate the population growth of the 19th or 20th centuries, can be demolished. Labour shortage may reduce unemployment and moderate inequality through higher wages, and promote capital substitution and labour productivity as wages rise. With international trade and alliances, markets and security transcend frontiers. Economists tend to put too much emphasis on overall national gross domestic product (GDP), which of course must be smaller in a rich country with fewer people. But what matters for human welfare is the GDP per head, which defines the standard of living for the individual. In Western populations there is no statistical relationship between the GDP per head (standard of living) and population size or rate of population change of particular countries (Figure 1). Population ageing is unavoidable Policy-makers and the media in Western Europe persistently fail to understand the absolute inevitability of a very substantial level of population ageing in the future, come what may, even if birth rates rise somewhat. Population ageing, and the end of population growth, are the inevitable consequence of low vital rates throughout the world. Declines in the birth rate were initially the primary engine behind population ageing. Lower birth rates reduce the size of young cohorts and therefore the burden of youth dependency (‘ageing from the bottom’, or ‘ageing from the base’ in Pressat’s terminology). In most Western countries, a two-child family norm was established about 60 years ago and birth rates have not declined since the early 1980s. Because of this relative stability, low fertility is giving way to low mortality as the primary force behind population ageing. Today in modern societies, 97% of babies can expect to live to age 50, which is above the average age of the population. Death rate improvements are now inevitably and increasingly concentrated among the late middle aged, the old and the ‘oldest-old’ aged over 85. Death rates continue to fall at between 1-2% per year even among the very elderly – an unexpected and remarkable phenomenon (Wilmoth and Robine 2003). All this directly increases the number of elderly – ‘ageing from the top’ or ‘ageing from the summit’. In those countries where birth rate decline happened first, notably France, almost all population ageing is now due to continued falls in the death rate (Calot and Sardon 1999). Eventually, all other countries, including Korea, will follow as long as birth rates fall no further. The extent to which declines in the death rate can continue at their present rate is hotly disputed (Olshansky and Carnes 1996). Few have much faith in expectations of life beyond age 85, although in the last few decades, national and UN projections have consistently under-stated the improvements of survival which have been obtained in reality and may well continue to do so.

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Figure 1 relationship between population size and growth, and GDP per head and growth in GDP per head , 2001-2002, Western Countries and Japan.

G DP per head in relation to pop ulation size, W estern countries and Japan, 2002. 60000

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If continued improvement in expectation of life contributes to yet further population ageing, it may be natural to regard this benefit to individuals as a burden on society. In fact, however, increased expectation of life may at least in part bring with it its own solution, as long as active and healthy life is also being stretched in reasonable proportion. If healthy life expectation increases pro rata with expectation of life, then longer active working life can, indeed must, follow longer lifespan (Lee and Goldstein 2003). Evidence on this rescaling of the life-cycle is mixed. Earlier evidence from the UK, for example, showed that since 1981 expectation of life at birth has increased by 3.3 years for males and 2.6 for females. Of these additional years, 2 years in the case of each sex are 'healthy' additional years, 1.3 and 0.6 are unhealthy. Methods using cohort data, however, capture more substantial advances in expectation of active life. For the US population, for example, these new methods give almost double the expectation of active life at some ages compared with traditional methods. For males in the 1990s, this amounted to 13.7 years of active life out of a total of 15.7 from the completed-cohort estimates compared with 7.4 active years out of 15.1 for the period estimates (Manton and Land, 2000, table 4). The more recent the research, the more favourable the result. ‘Solving’ population ageing: replacement migration and other temptations The question of population ageing bring us to the concept of so-called ‘replacement migration’. Many in the European political class and in the media have been persuaded, partly thanks to an influential but misunderstood UN report (2000), that Europe ‘needs’ very large numbers of additional migrants to save itself from its own geriatric future, to make up for the babies which Europeans cannot be bothered to have, to stimulate the economy, to pay its pensions, and so on. The UN’s ingenious calculations showed that if Europe wanted to preserve the present size of its population of working age on present trends, then it would need to import millions of persons every year into the foreseeable future, assuming that the birth rate did not return to the replacement level. Demographers understand that population ageing is a fundamental and unavoidable consequence of low birth and death rates. Any modern population, which enjoys a high expectation of life of (let us say) 75 years, where family size is controlled even at the replacement level of an average of about two or less, is bound to acquire a permanently different age structure from that of the present, forever. Today’s age structure, inherited from the 20th Century, was created by its vital rates, not those of the present. It is unstable and non-sustainable. The only way in which it could be preserved into the future is either by cutting back expectation of life to about fifty years, by persuading the average family to have at least three and a half children, or by importing very large numbers of immigrants. The latter options, especially the last, would unleash unsustainable levels of population growth and eventually exhaust world population. Today the potential support ratio (PSR; the number of people of potential working age, nominally 15-64, for every person of retired dependent age, normally over 65) stands at just over four to one in most European countries. That is not the real ratio of actual workers or taxpayers to retired dependents, which is much less (about 2.5 to 1). Only about 64% of Europeans aged 15-64 are at work.

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In the future it is likely that the potential support ratio will go down to not more than two and a half, and in some countries not more than one and a half, depending mostly upon the future level of the birth rate. The official projection by the UK Government Actuary’s Department (GAD) of the potential support ratio for the UK until 2100 is given in Figure 2. On its assumptions of mild increases in survival and in fertility, with 95,000 net immigrants, the PSR falls from about four about two and a half. Figure 4 shows the likely future in other European countries on current assumptions as projected by the United Nations (2000). France, the UK, Germany, Italy and Spain all begin with a PSR of around about four but decline to different levels: over two in the case of France and the UK, well under two in the case of Germany, and in the case of Italy and Spain, less than one and a half (Spain 1.36). These results imply quite big differences in future implications for the economy, productivity, dependency, and other indicators. Figure 2 UK PSR projection on various scenarios

Potential support ratio

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Figure 3 Various countries, PSR projections on various assumptions. Source: United Nations

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Cannot these problems be solved with more immigrants? The answer is ‘yes’, but only if very high levels of population growth can be contemplated. Figure 4 derived from official calculations (Shaw 2001) shows the population size consequent on the migration needed to preserve the current potential support ratio in the UK up to 2100. By 2050 the UK would have to import 1.2 million net immigrants per year, which would double today’s population of 60 million to 120 million. By 2100, up to five million new immigrants would be needed every year, and the population would have risen to 312 million, not much less than the present population of the whole European Union. To preserve through immigration the PSR of the EU itself up to 2050 would require its population to rise to about 2500 million, approximately the same size as today’s populations of India and China put together. Figure 4 Population trend in the UK to maintain current PSR (millions). Source: GAD unpublished

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The reductio ad absurdum of all this is what one might call the ‘Korea syndrome’. It concerns the level of immigration required in order to preserve the current potential support ratio in the Republic of Korea and its consequences for population growth. As this audience will be well aware, in order to preserve the present potential support ratio of Korea – 10: 1– the population would need to increase to 6.2 billion people by the year 2050. Just by coincidence, this happens to be the entire population of the planet at the present time, so all of us who are not Korean would have to move to Korea. Perhaps this conference is a rehearsal for that great migration. Attempting to maintain the PSR is an extreme aim, and it would not do to pretend that immigration does not have a favourable impact upon the age structure. The problem is that the effect is not very great and immigration is an inefficient way of achieving this end. Immigrants are only about 10 years younger, on average. than the average of the Western populations to which they move. They themselves age and then require even more immigrants, as it were, to replace their number and compensate for the inevitable ageing of the earlier immigrants and of the native population. Also, there is a tendency for immigrant birth rates to converge on those of the host population, although by no means a complete one. Population ageing is a consequence of low birth and death rates, not of a failure of migration: birth rates are a more effective way of changing age-structure without the complication of inevitable population growth. We noted earlier that population ageing cannot be ‘solved’ by fertility either, although it is easier to moderate it by that route. Even if the birth rate rose up to replacement level (TFR 2.1 in low mortality countries), the support ratio would only increase to about 2.9. But that would imply no further population growth and eventually, as with all constant rates, an end to further population ageing. To keep the PSR at four, a family size of three and a half would be required, which would generate population growth of 1.8% per year. In real populations, fertility and migration levels both act to affect the rate of population ageing (Lutz 2003). A more flexible set of replacement scenarios than those afforded by the UN, which recognize the importance of the possibility of further substantial declines in mortality, show the equivalence of given levels of migration and fertility. They omit, however, the different consequences for population growth; replacement fertility requiring no further growth, replacement migration having more substantial consequences either for the population growth or replacement of the original population. Can immigration ‘solve’ economic problems? In a related argument, it is claimed that Europe and other developed countries 'need’ more immigrants to fill specific labour shortages, generally to maintain the size of the labour force. Immigration is held to promote economic growth (even in the absence of demographic shortages) and thereby benefits both migrants and natives. These are complex and controversial maters which can only be addressed here very briefly. The actual record of immigration Few doubt the short-term advantages to employers, and probably to the economy, of recruiting highly-skilled workers to fill real job vacancies, although these tend to be 11

on a modest scale, temporary, and often reciprocally balanced between (developed) countries. Many analyses of the net economic effects of immigration to Continental Europe, especially those done during the 1960s guest worker period when most immigrants were workers, came then to unequivocally favourable conclusions. But many of those ‘temporary’ workers stayed on even when unemployed when the economy moved on, and were joined by their dependants, contrary to expectations. In the long run, the guest worker era, which Japan notably avoided, may have retarded the inevitable and necessary automation of production in Europe, and reduced its competitiveness. Over time, the pattern of economic demand and of immigration has changed. Modern economies should not need large inflows of unskilled labour. It was interesting to hear the complaints from employers in Korea, noted in the briefing papers, about their inability to hire unskilled workers from abroad. The lessons are obvious; to make the processes more productive, increase wages, or export the enterprise. The growth sectors of the economy now demand skilled or professional workers, and changes in systems to enhance productivity. Recent research findings on the economic benefits of migration have become more nuanced and in some cases negative. Since the 1970s the majority of legal migrants to the UK, and to Europe, and also to the United States have come as dependants, as students, as new spouses for the growing immigrant populations or more recently as asylum claimants. Only a minority entered specifically for work reasons: in 2000 well under 20% in Denmark, the US, France, Norway and Sweden, for example (OECD 2002 Chart 1.2). In France in 1999 78% of the inflow was family related. The skills of such migrants, especially those from outside Europe, are not usually at a high level. Unemployment among existing foreign populations in Europe is about double the national average in many countries, and workforce participation rates, especially among women, are typically lower, just 20% and 30% among Bangladeshi women and Pakistani women in Britain, for example.. Computing the benefit or cost of immigration is obviously difficult. The US National Research Council (Smith and Edmonston, 1997) concluded even on a narrow fiscal calculation that all immigration (legal and illegal) to the US might add as little as $1 billion or as much as $10 billion per year to the US economy, which was then growing at $400 billion per year. Immigration might thus contribute as little as 0.25 per cent to the annual rate of growth or as much as 2.5 per cent. More certain is the fact that immigration was then adding about 0.5 per cent per year to population growth and comprised about 60 per cent of that population growth. If the lower end of the growth estimate is taken, in the 1990s immigration was making the average US resident slightly poorer, not richer. In the US as in Europe immigration may bring cheap services and a wider choice of ethic restaurants to the middle classes and elites, but it is not to the advantage of the lower paid. Borjas, Freeman and Katz (1997) conclude that ‘Immigration has had a marked adverse impact on the economic status of the least skilled US workers (high school dropouts and those in the bottom 20% of the wage distribution). Borjas (1999) more recently concluded that more recent immigrants to the United States contributed much less to the economy than in previous decades, partly because of a declining skill level, and that their presence might well disadvantage poorer American workers.

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This deterioration is shared in the immigration experience of some European countries, where in net terms resources are transferred from natives and rich immigrants to poor immigrants (Wadensjo 1999). In the UK, at local level, a 1 percent increase in the share of immigrants leads to an increase of between 0.2 and 0.6 percentage points in the local unemployment rate (Dustmann, Fabbri , Preston and Wadsworth 2003). Also in the UK, immigration promotes out-migration of natives and creates unemployment in areas remote from the area of settlement, which may explain some of the ‘benign’ results of earlier research (Hatton and Tani 2003). In Denmark, while immigrants from rich countries are judged to be economically beneficial, those from poor countries impose a net cost on the host society (SchultzNielsen 2001). In Sweden the net economic effect of recent immigration has been negative, amounting to an annual net transfer to immigrants of between 1% and 2% of GDP (Ekberg 1999). There, more recent migrants tended to be much less wellequipped in terms of capital and also much more prone to be unemployed or economically inactive. The conclusion varies from country to country; Sweden has a well-developed welfare system and many of its immigrants are poor and unskilled asylum seekers. Even on narrow economic criteria, however, the general conclusion from real evidence seems to be that overall, recent immigration has at best marginally positive net effects and quite likely negative ones. Immigration, economic distortion and dependency In Europe, rigid labour laws, and very high social costs (payroll taxes) are blamed for the chronically high level of unemployment (about 11% in the Euro zone, double that among the young and among existing immigrants). This unemployment coexists with high levels of illegal immigration and illegal employment. If employers are permitted to evade these choices by importing immigrant labour which may (temporarily) accept a lower standard of living, then wages and status in such occupations may fall even further. The native workforce will shun such jobs permanently because they have become ‘immigrant’ occupations. Easy access to migrant labour can thereby create distortion and dependency in economies, diverting attention from the solution of serious structural problems. On the other hand, restricting easy access to unskilled labour can have beneficial results. In the US, the ‘Bracero’ programme to recruit Mexican agricultural guest-workers was restricted in the 1960s, against employer protests. In California this promoted remarkable gains in productivity through the mechanisation of fruit picking and processing and other efficiencies, accompanied by increases in individual wages, in union membership and in the employment of US workers (Martin and Olmstead 1985). Another example of distortion is that of the British National Health Service, one of the worst funded health systems in the West. Overseas recruitment has permitted the continuation of chronic public under-funding. It has made continued overseas recruitment essential, as investment in training remains inadequate to meet domestic needs. Salaries and wages, and conditions of service for staff remain poor. The health service provided to the public, except for emergency and acute services, is the subject of constant complaint. Poor conditions of service weaken the retention of British staff, and imported staff also do not long endure its problems. Thus over 100,000 trained UK nurses are no longer nursing, and despite substantial overseas recruitment of

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nurses (half of all who entered nursing last year), the number of foreign nurses in the NHS remained constant over several years (Dobson et al. 2001) as many left to take up employment with better conditions. As the OECD notes (2003, p 23)‘in many countries, the problem is not so much a shortage of nurses as a shortage of nurses wiling to work under the conditions being offered them. Immigrants replace natives in low-fertility settings. Given sub-replacement fertility of the native population, demographic theory shows that migration sufficient to maintain any constant size must eventually replace the original population with the immigrant population. Any population trying to maintain its numbers by importing people to compensate for below-replacement fertility would eventually be replaced by the newcomers. Its culture too would therefore be replaced unless the new immigrant populations showed a willingness to adopt local identity, values and habits in a way often radically different from the preferences of many third-world populations moving to the developed world today. A society does not automatically ‘save’ itself simply by maintaining the population density in the national territorial space with people of different and diverse social origins. If the current pace of immigration into some Western countries continues, combined with persistence for some time of the often higher fertility of immigrant populations, then their populations are likely to comprise about one-third ethnic minority origin by midcentury, one-half in the case of the United States (5). In the long run, if countries wish to maintain their total population or population of working age, they will have to grow their own. Figure 5 ethnic minority population growth, selected Western countries. Sources: national population projections, Ulrich 2001, GAD 2002 based variant projections.

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Fertility rates can go up as well as go down In the West, birth rates first declined to below the ‘replacement’ TFR of 2.1 children on average as early as the 1930s, a fact obscured by the unexpected intervention of the’ baby boom ‘ of the 1950s and 1960s. Since the 1970s most western countries have returned to lower birth rates, in almost all cases below the replacement level – much as in the 1930s. The Republic of Korea, along with the other Asian industrial countries, has had a different history. In Korea the TFR fell below the replacement rate around 1985 and appears still to be falling. This is no longer the case in most European countries. Birth rates can go up as well as down, partly because of the partial recuperation of fertility at older ages which has been postponed from younger ages since the 1970s. Of the 15 significant western European countries, just over half showed increases in TFR between 1995 and the latest available year, including Belgium, France, Italy, Germany, the Netherlands and Spain (data from Eurostat 2002 table 3.3). Much of the reduction in period measures of fertility, it is well known, is due to the postponement of births. Attempts to ‘correct’ period fertility measures , all controversial, typically ‘add’ about 0.2 to 0.3 to the estimate of period TFR (e.g. Kohler and Ortega Osona 2003). Even so, that re-evaluation does not save populations from an implied fertility level that would considerably accelerate aging were it to continue. But in most populations the recovery of fertility rates at older ages has so far been insufficient to compensate for the decline in earlier ages, pointing to a fall in completed cohort fertility to below replacement level (Lesthaeghe 2001, Frejka and Calot 2001). Expectations here vary greatly between European countries. In general, the populations of NW Europe have shown the greatest fertility recuperation, those of Southern Europe the least. As noted in another section, the demographic regime, household systems and gender relations in Korea (and Japan) put them closer to the Southern European countries. These; like Korea and Japan, share some of the steepest projected increases in population ageing and the most marked population decline unless there is a demographic regime change. The fertility profile in Korea is still relatively young but is falling fast at younger ages. As in the southern European counties, So far only modest compensating increases can be seen in age-specific rates over age 30 . Most researchers seem pessimistic about a return of fertility to replacement rates in European countries. Nonetheless, the delay in childbearing has not yet ended in any country and we cannot foretell likely responses when it does. There may be general population-level tendencies to equilibrium. Enhanced welfare arrangements or other measures which improve the status of women may remove obstacles to childbearing (Lutz, 2000). Biological and behaviour - genetic models may provide other reasons why fertility should not drop to very low levels (Foster, 2000; Morgan and King 2002). Finally, the prospect of higher birth-rates is underpinned by the consistent finding, after 30 years of surveys , that in most but not all European countries (see Lutz et al 2003) women wish on average to have about 2 children (although seldom much more).

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In some populations that higher-status and better educated women now have more children than average; female workforce participation is no longer an impediment to the third child, at least not in Scandinavia and probably not in the US (Kravdal 1992a, b). The former negative relationship between women’s workforce participation and fertility had been reversed since the 1990s (Ahn and Mira 1999) For all these and other reasons, most national and international projections, anticipate a modest recovery in fertility although stopping short of replacement level. It has to be admitted, though, that the (relatively early) childbearing pattern of Korea, and its very low aggregate level, suggests that low fertility has a long way to go before a recuperation can easily be managed, and as in Southern Europe, the cultural conditions are not yet very propitious. Family policy and the birth rate An increase in the birth rate even to the highest level that is plausible (about replacement level, in a modern society) cannot ‘solve’ population ageing. Only a TFR of about 3.5 could do that which, as we noted above, would lead to population growth of nearly 2% per year. However any increase in birth rates, even to a higher subreplacement level, would moderate population ageing, making it more readily manageable by non-demographic means. In the absence of net migration, replacement level fertility would eventually stabilize population size. It could not, however, prevent a short-term fall in the total population in those populations that had experienced sub-replacement fertility for many years and that had thereby acquired an unfavourable population momentum. Can governments influence the birth rate in directions favourable to the management of population ageing, either directly or indirectly? ‘Pronatalist’ policies intended to encourage population growth and avert decline have great antiquity; indeed a generally pronatalist attitude was almost universal among rulers and governments in the past as part of a generally ‘mercantilist’ world outlook. In the West today, however, explicit pronatalist policies are almost absent, even in the presence of fertility levels so low that they threaten national economic and fiscal systems, They were closely associated both with the Nazi regime in Germany, and with Fascist or other authoritarian regimes of Western Europe, some of which persisted until the 1970s. That has put pronatalist policies and their rhetoric outside the pale of political discussion in many Western European countries. Pronatalist policy was also almost universal in the totalitarian regimes of the Communist countries, some (as in Romania) to oppressively extreme degree. Pronatalism in Europe therefore has a bad press. More generally, pressure on women in such personal matters is nowadays regarded as incompatible with modern liberal values. Outside Europe, however, Japan and Singapore take a more robust view. However, extensive and expensive welfare traditions have developed especially in NW Europe which accept a specific state responsibility for the welfare of mothers and children. These family policy measures, originally intended to protect families with children from poverty, have recently widened their scope to facilitate choice for women; to fulfil their desires both to enter the workforce and to have a family. This is less marked in countries where government and perhaps national sentiment still

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favour more traditionally separate roles for men and women (e.g. Austria and Switzerland). (Moors and Palomba 1995, Palomba and Moors 1998, Gauthier 2002). Whatever their ostensible purpose, insofar as they make it easier for women to have the children that they desire, their provisions tend to be more or less indistinguishable from those in the more benign kind of ‘pronatalist ‘ policies. They do not, of course, attempt to restrict choice in family planning or abortion. Neither are they intended to increase demand for children, but rather to make it easier to satisfy those demands. In many countries the focus of policy is to ease the apparently conflicting demands of child care and workforce participation Elements of family policy Defining ‘family policy’ is exceedingly difficult, especially when many governments collect 50% of national income in taxes and distribute it in very many ways which directly and indirectly could influence decisions on family formation.. They can be classified under the following headings suggested by Gauthier (2001) and McDonald (2001). MONEY One-off cash payments or loans on birth, or on attaining school age etc. Loans may be written off as children are born (a policy first introduced in Nazi Germany) Wage supplements or tax reliefs for parents of dependent children (e.g. Working Families Tax Credit in the UK). These tend to benefit the higher earning parent, usually the husband. Regular cash transfers for parents or specifically to mothers of dependent children (usually equal for each parity). Endowment schemes with state help to provide for children’s future. Pension contributions for people with families (as advocated by Demeny 1987). Financial Compensation for withdrawing temporarily from labour force for childbirth and care (well developed in Scandinavia). Specific (raised) benefits for lone parents. All these may be universal (as in the UK) or means-tested and varied according to income. Other measures, often described as ‘family-friendly employment policies’ subsidize time and care, particularly intended to allow the combination of childcare and paid work Maternity and paternity leave on full pay / part pay Guarantees of entitlement to return to employment at same level without loss of seniority. Free child care: crèches, playschool and other childcare facilities provided by employer or from local or national authority. Tax reliefs and other benefits for paid child care (nannies, au pairs, childminders, crèches). Flexible working hours and ‘compassionate’ leave for short-term absences for family purposes. Equal pay for women Employment practices/law which minimize discrimination against women with children.

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Legislation to limit working hours and make part-time working easier. Many of these measures may benefit working mothers while being intended to improve the welfare of all workers, or to advance the cause of sexual equality. Other, more general subsidies include free education, school meals and other services for children. free health care, free or cheap public transport for children, indirect tax reductions (e.g. zero VAT) on children’s clothes, free or heavily subsidized housing or rent subsidies for families on low income (in UK, council housing, housing associations and housing benefit, in France HLM housing), especially if access is dependent on family size. Policies and law to encourage ‘gender equity’, for example equal pay, and paternity as well as maternity leave, which have a bearing on several of the forms of benefit noted above (see McDonald 2001), particularly well developed in the ‘state feminist’ polices of Sweden and Norway. The details are too complex and varied to summarise here and are given in (e.g.) the European Observatory the Social Situation, Demography and Family http://europa.eu.int/comm/employment_social/eoss/index_en.html, (see Bagavos and Martin 2001). In general the pattern and level of support reflect long-standing national and regional political culture and socio-cultural traditions. Thus free-market approaches and private arrangements in the US :Folbre 2001), socialist policies emphasising cradle to grave welfare in Scandinavia; more modest intervention in male-dominated ‘familist’ cultures where care for children and elderly was a family matter where state intervention was inappropriate (Southern Europe, Switzerland, and Japan). Demographic pressures, however, are forcing change, for example in Japan with its ‘Angels’ and ‘New Angels’ family-friendly policies. Everywhere the state has tended to become more interventionist (Moors and Palomba 1995). It has proved quite difficult to show that these polices have any effect in facilitating childbearing and thereby raising the birth rate. It has proved difficult to assemble comparable data on all the relevant public policies. Comparisons and rank-orders can be influenced by rapid changes over time (child benefit in Italy fell from 13% of the social security budget in 1970 to 4% in 1992, being then one- tenth the money value per child as the payment in Sweden: Chesnais 1996). Childcare leave has changed fastest since the 1980s; more benefits are means-tested and support has converged on a ‘family+work’ combination ( Gauthier 2002). Table 1 Simple summary of selected child – related benefits Cash benefits for children as percent of GDP 1996 (after Gauthier 2000 Figure 2) Highest (over 2%) Finland Luxemburg France Sweden

Lowest (below 1%) Greece Italy Portugal Spain

Maternity and childcare leave 1999 (after Gauthier 2000 Figure 3)

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Highest (over 100 days) Finland France Germany Austria Portugal Spain (but mostly unpaid)

Lowest (under 50 days) Belgium Greece Ireland Italy Netherlands UK

Percent of children under age 3 in publicly funded childcare, 1993 (after Gauthier 2000 Table 5) Highest (over 20%) Lowest (5% or under) Belgium 30 Austria 3 Denmark 50 Germany 5 Finland 27 Greece 3 France 23 Italy 6 Sweden 33 Spain 5 UK 2 Source: based on Gauthier (2002) and McDonald (2002). Do family policies affect the birth rate? Level of family policy shows only a moderate association with high contemporary birth rates. Finland and France appear in the upper distribution of all three kinds of benefits summarised in Table 1 and their TFR is among the highest of the European countries. At the other extreme, Spain, Greece and Italy with their very low TFR feature prominently in the lowest categories of family support, although Spain and Portugal do well on maternity leave. In such countries, lacking cash transfers or tax reliefs, the arrival of successive children reduces living standards of families substantially. The UK as usual has a somewhat anomalous position: cash benefits for children as a percent of GDP are little below those of France or Sweden, while levels of public childcare for young children and of maternity leave are among the lowest in Europe. Relatively high fertility in the UK has consequently been a source of surprise and even of irritation to overseas observers, and attributed (probably correctly) to an excessive level of unplanned pregnancy especially among the young. The recent decline of TFR may now be taking it down to a more appropriate international position. The post-war communist regimes of Eastern Europe provide thirty to forty years of rather erratic pronatalist policy, mostly starting in the 1950s and 1960s when birthrates in Eastern Europe had all fallen to below replacement level (see Teitelbaum 1999). Family allowances rose to high levels – doubling average wage for the father of six children in Hungary, for example. Cash subsidies were often accompanied by free childcare in creches; married couples with children enjoyed preferential access to state housing. With chronic housing shortages, early and universal marriage was thereby encouraged. Pronatalist intentions were partly vitiated by the early legalisation of abortion for ideological reasons in the Soviet Union in 1920 and elsewhere by the early 1950s. Without access to modern contraception, reliance on abortion did permit some state control over fertility, however unwanted that fertility might be, by regulating access; most notoriously in Romania in 1966.

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Any ‘success’ of these policies may have been more a result of temporary shifts in the tempo of fertility rather than enduring increases in the quantum (Stloukal 1998). Be that as it may, fertility rates in Eastern Europe showed little tendency to decline after around 1970 and TFR remained around 2 until the end of Communist governments and Communist policies in 1989 and 1992, that is about 0.5 above the average TFR level in Western Europe. Removal of most of these policies after the end of communism was followed by sharp reductions in the birth-rate, which remain universally very low today (Macura 1999). However, that is hardly surprising in view of the sharp decline in national income and the novel rise of unemployment and general political uncertainty. In the West, analysis of the effects of family policy on fertility sends mixed messages. French pronatalist policy may have elevated the TFR by up to 0.3 around 1980; that is from an expected 1.5 to the actual 1.8, according to the regression analysis of Calot and Chesnais (1983). A similar result (an increase of 0.2) was obtained by Ekert (1986). In Sweden there is a close connection between cash benefits, tax breaks and especially its paid maternity leave on period fertility. Comparison with the lower fertility in Hungary points to the importance of gender roles, more equal in Sweden, while in Hungary more traditional attitudes are preserved (Olah 1998 p. 24) (Sweden has higher fertility and progression to second birth). The Swedish comprehensive system of family benefits, child care and work practices (especially the easy availability of part-time work) made continuous working life a natural choice for young women, and involved fathers more in childrearing, especially those who were more educated. This has been contrasted unfavourably with the less flexible work arrangements in France which pressed French women to choose between working life and family, putting a double work load on Frenchwomen with jobs. Women with career aims were much more likely to progress to a third child in Sweden than in France (Corman 2000). Analyses in Norway come to similar positive conclusions (Rønsen 2001). Since the mid-1990s, however, the Swedish economy has fallen on evil times. Unprecedented levels of unemployment for Sweden have hit younger people hard and reined back the generous but expensive Swedish welfare system, which is strongly linked to employment. Sweden’s ‘state feminism’ promotes gender equity : Men and women there share the burdens of childcare more than elsewhere. By comparison Austria;, where third births have declined markedly among working women has been described as ‘a country which has hesitated to put its money on gender equity and ...has retained much of the old spirit of family-role specialisation’ (Hoem et al 1999 p 22). In this respect, Austria seems to resemble Germany and Switzerland – with notably low female workforceparticipation and birth-rates. The emergence of a clear positive relationship between birth-rates and female workforce participation rates (Coleman 1999), contrary to previous theory, may reflecting the success of family-friendly employment policy in Northern Europe, and underline the dire fertility consequences of persistent gender inequity in the South and in Japan (McDonald 2000), which may have lessons for the development of family –friendly policy in Korea Ideally, a model would show the effects of all aspects of these policies on an internationally comparative basis. Results are rather disappointing, showing only limited positive effects (Gauthier and Hatzius 1997). However these careful studies only incorporated a limited set of specifically financial variables.

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Can common features can be found among countries with lower and with higher fertility? There appear to be three roads to comparatively high fertility rates in the modern world: (1) high wages, ample childcare, and well-developed maternity leave (2) high gender equity and well developed parental leave (3) high male wage, high percentage of female part-time employment but with less developed parental leave. According to Fukuda (2003, p 23) the socio-economic system and childcare support have ‘institutional complementarity such that a high level of fit between the two will promote fertility. If the fit is bad, public policies can be expected to have little effect, as they have so far in Japan’. Countries as Japan, and those of Southern Europe, with low level of gender equity and a tradition of low public support for the family have a long way to go. Workforce growth and decline, and European variety. The threat of future decline in the numbers of people of working age is real, of course but it tends to be exaggerated. Declines ‘projected’ for the future tend to be interpreted as actual decline today. The populations of working age – not the same as the workforce - continues to increase in many Western countries, and the West cannot be regarded as an homogeneous entity for this purpose. With moderate increases in workforce participation , as projected by Eurostat, very few counties are expected to experience falls in the actual working population before 2025 (Feld 2000). In the UK, for example, the latest projections from the Government Actuary’s Department envisage a population of nominal working age increasing from 38.4 million in 2001 to 39.4 million in 2026 and declining slightly to 38.3 million, about today’s figure, by 2051. Plenty of time, it would seem, to plan for a projected fall of just 100,000. (http://www.gad.gov.uk/population/2001/uk/wuk015y.xls). Figure 6 Projection of 20-24 year old population, selected countries. Source: UN P o p u la t io n a g e d 2 0 - 2 4 , se le c t e d E u r o p e a n c o u n tr ie s 2 0 0 0 - 2 0 5 0 (2 0 0 0 = 1 0 0 ) 115 105 95 85 75 65 55 45 35

2000

2005

2010

N o rw ay

2015

F ran c e

2020

2025

G e rm an y

2030

I ta ly

2035

2040

N e th e r la n d s

2045

2050

S p a in

Numbers in the potential working age-groups are likely to decline quite soon in countries which have suffered low fertility for some years, such as Italy, Spain and Greece, but much less in countries such as Norway and the Netherlands where fertility 21

has remained relatively higher. These UN projections of the working age entry population, say 20-24, highlight these differences in outlook (Figure 6), with relatively constant numbers in NW Europe and longer term decline elsewhere. And the projections do not fully take into account the increases in the birth rates in Denmark, the Netherlands, and especially in France in recent years. In Korea, although substantial ageing is inevitable, population decline is not forecast for another 40 years. Furthermore, the population age-structure is about to enter a beneficial ‘demographic bonus’ of exceptionally low dependency ratios (total dependency ratio 39), of a kind which Europe is now leaving behind. Finally these anxieties partly miss the point - workforce and productivity are not just defined by demography. Non-demographic management of population ageing Immigration can only sustain the potential support ratio at the cost of unsustainable levels of population growth, and that while a return to somewhat higher fertility would undoubtedly help to moderate population ageing, it cannot restore it. While there is no 'solution' to lower support ratios in the future, the process can be moderated in other ways, some of which are already in train. In financial and actuarial circles, attention tends to be focused in fairly optimistic terms on fiscal, economic and workforce adjustments to manage ageing (Institute of Actuaries, in press, ). What matters is whether the economy can manage the changed pattern of consumption and investment and still deliver acceptable economic growth . Most opinion suggests that it can, at a loss of perhaps ½% on economic growth rates as long as birth rates remain reasonably favourable (see e.g. Weil 1997, Gillion 1999, Daykin 2002). The favoured approach is a multiple response, divided here into three broad categories: (1) Improving the real, as opposed to potential 'support ratio' The EU countries have, overall, the lowest workforce participation rates of any major modern economic block – hardly 64% of the population aged 15-64 is economically active and an even smaller percentage is actually in work. This varies greatly between countries. In Italy and Spain, for example, scarcely half the 15-64 year old population is employed (Table 2). The actual UK workforce is only about 78% of the working age population, because of early retirement, tertiary education, and so on. Hence the real support ratio of taxpayers to pension recipients is already much lower than the abstraction of the ‘potential support ratio’. In the UK today it is about 3.2, not 4.1, and the real support ratio of actual workers to all non-workers over age 15 today is just 1.67, a ratio evidently capable of supporting national life without distress. There is much scope for increasing it: by encouraging higher workforce participation through retraining of the unemployed, discouraging early retirement, reducing obstacles to internal labour mobility (Fuchs and Schmidt 2000), and above all by making it easier for women to combine work with childcare through a variety of measures which in Europe are best developed in the Scandinavian countries. If, for example, the whole of the EU15 could acquire the high workforce participation rates of Denmark as in 1999 then the employed population would be increased by 35.6 million (11.8 million males, 23.5 million females) or 23.2% - about the same as the supposed numerical deficit by 2050 (Figure 7). Even more impressive increases would arise if those of Iceland could be emulated (Rowthorn 2003). This of course

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Table 2 Employment and workforce participation in European countries, 1999.

France Germany Italy Netherlands Spain UK

Population aged 15 - 64 Total Fertility Rate Economically Employed % Active % 1.87 68.8 60.4 1.37 71.2 64.8 1.21 59.6 52.5 1.72 73.6 70.9 1.19 62.1 52.3 1.64 75.1 70.4

Sources: Council of Europe 2001, Eurostat 2000 Labour Force Survey, OECD can only be done once – workforce participation rates cannot rise above 100% or even approach it. Furthermore it is easy to imagine the obstacles to realising this hypothetical result. But it shows the need to concentrate on reforming the EU’s labour market, welfare and early retirement systems before tinkering with demography. Figure 7 Increase of EU working population given Danish participation rates

Potential increase in EU 15 workforce , 1999, given Danish participation rates (millions) 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Economically active all

Actually employed males

females

(a) In the UK case, a return to the male workforce participation rates of 1971 and reasonable assumptions about extension of female participation up to age 65 when pensionable ages are unified in 2010 – 2020, increases the active population to 84% of the age-group (for details see Coleman 2002).

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(b) increasing the average age of retirement, a step made easier by longer active life. This would involve moving pension entitlement age upwards and encouraging longer workforce participation by removing tax disincentives for working pensioners and removing employment barriers imposed solely on grounds of age. Such steps are already in train in the US, Italy and Japan. Table 3 shows the level of retirement age needed completely to compensate for changes in potential support ratio in the UK (essentially by changing the definition of support ratio). Most scenarios envisaged a universal retirement age rising to about 72. Complete compensation is not needed, of course, and furthermore we are not starting from a retirement age of 65. The calculations summarised in Table 3 above assume a current age of 62. In reality, actual retirement age is about 58. If maintaining the potential support ratio involves a longer nominal working life of (72-65=7) years, then maintaining the real support ratio means a movement of normal retirement from 58 to 65 (58+7). The ‘preferred’ route into the future can be evaluated by considering a tradeoff between maximising the potential support ratio and minimizing the growth of population size. It is assumed that higher PSRs are preferred and that further increase in population is undesirable (see Coleman 2000 for further discussion of the latter). Change in potential support ratio is intimately associated with the notional retirement age required to preserve the potential support ratio. A return to replacement fertility with mortality and migration as in the GAD principal projection yields the highest potential support ratio of all (2.75), with population growing to 72 million by 2050. A notional working age limit of 70.6 years would then be required to keep the PSR at 4.2. The same fertility with zero net migration, however, produces a PSR of 2.53 but with 8.7 million fewer people. Table 3 Comparison of UK scenarios at 2050 by order of potential support ratio.

Projection

(Actual 1998) Constant 1998 vital rates TFR=2.07 TFR=2.07, high e0 185k constant migration TFR=2.07, zero migration GAD 1998 Principal Projection TFR=2.07, high e0, 0 migration TFR=1.7 High e0 Zero migration

Values in 2050 Potential Total Median Percent support Working population age aged 65+ ratio age limit 59.2 64.2 71.8 72.6 70.6 63.1 64.2 63.9 61.7 65.0 56.1

36.9 42.7 40.4 40.9 43.4 41.6 44.1 42.2 45.5 44.6 45.8

15.7 20.4 21.7 22.4 23.2 23.2 24.2 24.0 25.2 25.1 26.0

4.15 3.12 2.75 2.64 2.61 2.53 2.47 2.42 2.38 2.37 2.25

62.5 68.3 70.6 71.5 71.1 72.1 72.0 73.0 72.6 72.8 73.6

Note: Except where specified, all scenarios employ the same assumptions as the GAD Principal Projection: TFR rising to 1.8, constant migration of 95,000 per year, expectation of life rising to 79.7 and 83.9 years for males and females respectively by 2060. The ‘working age limit’ is the corresponding formal retirement age ‘required’ to preserve the current potential support ratio of 4.1. e0 is expectation of life at birth, both sexes. Source: unpublished calculations by UK Government Actuary’s Department.

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The most efficient process may be considered to be that which yields the biggest increase in potential support ratio for the smallest percentage, or absolute, increase in population size. (2) Moderating the financial burden (a) by promoting later retirement and by resisting further increases in the value of state pension entitlement; linking it for example to prices, not wages. The UK has already done this, although its government is coming under increasing pressure to change that policy.. (b) Encouraging alternative sources of old-age support through 'second and third pillar' occupational and private funded pension schemes, which may have the additional advantage of improving the savings rate for investment (World Bank, 1994, Daykin and Lewis 1999). Over 70% of the UK population is already covered by occupational or private schemes, in marked contrast to the continental European countries (European Federation 1999). However, funded pensions cannot escape all adverse demographic effects, because their value still depends on the output of the economy, in which the size of workforce plays an important role (Chand and Jaeger 1996) and on the stability of stock markets. The UK policy, which seemed so superior to the more demographically-vulnerable ‘pay-as you-go’ Continental state systems, is at present in disarray because of the severe recent falls in the value of equities. (3) Responding to stationary or declining workforce by increasing capital investment to improve worker productivity. This is a desirable step in its own right, to improve Europe's poor international competitiveness, and one which would naturally follow from the pressure of higher wages arising from any labour shortage. Several calculations have suggested that productivity growth per caput required to cover all increased old-age dependency would amount to about 0.5% per year by 2020, that is, resulting in 2.5% growth compared with normal annual growth of up to 3% per year. None of these by itself can offer a complete solution; none is available. For example, by 2025, additional productivity improvements for the EU would have to be about 0.8% per year if they were the sole means to meet the need for extra resources arising from population ageing; average age at retirement would have to rise from the EU average of 60 to 66 (European Commission, 1996 pp 36-39). Many countries have already begun to implement several of these measures in order to minimize problems and in the majority of European countries a multiple response appears to make them manageable. However, increased workforce participation is a 'one-off' response the effects of which would not last beyond about 2025. Furthermore, the extreme lowfertility countries, especially Italy, face in the long run an apparently unsustainable burden unless their birth rate increases considerably. Conclusions A smaller population is no obstacle to a high standard of living and may be beneficial for the solution of various social problems, and on environmental grounds. However the process of decline is inevitably linked with population ageing. There are no ‘solutions’ to population ageing, either demographic or socio-economic. Increased immigration and raised birth-rates can, however, ameliorate population ageing and / or avert decline. But raised immigration can only do so at the cost either of population growth or of the gradual replacement of the original population with a population of

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immigrant origin. And it is important not to allow the demands of employers to promote immigration flows which may temporarily distract attention form the reform of major structural problems of the labour market or of economy. The European countries cannot offer ‘answers’ to the Republic of Korea as it faces a period of rapid population ageing. Among other things, their demographic, economic and social backgrounds are different. Contrasts between European countries, however, may be instructive, because they face very different demographic futures – some benign, others much les so - primarily because of their differences in recent and current birth-rate. Analysis of these differences, and of the family policies, have not yielded easy answers leading to obvious policy prescriptions. In family policy, specific measures to ease the contradictions faced by women wishing both to work and to raise families may need to be accompanied by, or preceded by, substantial changes in social attitudes relating to the roles of men and women in society, to bring equity to the domestic as well as to the public scene.

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