The measures are relatively straightforward, their costs are comparatively low, and the impact is significant and visible in the short term. Hence, recently, ameliorative measures have become popular instruments of European governments to mitigate the impact of population ageing on the affordability of the social security system.
However, there is little evidence for sustainability of these measures, as they do not prevent the population from ageing. Preventive policy measures are those that might directly influence decisions concerning marriage, cohabitation and fertility. With the exception of abortion campaigns e. Romania , or generous family allowances e. France and Poland , governments of industrialized countries have been reluctant to formulate policies with the explicit intention of intervening in family life or population structure.
Key objectives of measures such as provision of family allowances and childcare policy have been defined as poverty alleviation or child welfare, rather than increasing fertility. Nevertheless, from the literature we identified three forms of policy intervention that have been used in Europe — family support, reproductive health policy and family friendly employment policies.
These are discussed below. Systems of family allowances now exist in practically every European country. They generally take the form of a monthly government cash payment to parents, sometimes integrated with, or replaced by, tax provisions, based on the number of children in the family. According to the economic theory of fertility Willis, ; Becker, ; Cigno, , the demand for children is a function of individual preferences and the cost of children. The correlation between financial incentives e. Authors seem to agree that a correlation does exist, albeit a limited one.
Studies from Romania, Poland and France show an increase in fertility immediately after the introduction of these incentives; however, the higher fertility rates do not seem to be sustained in the long run. Higher family benefits seem to encourage an earlier timing of births, but not necessarily a larger family size. In the s, after the introduction of pronatalist policies in Poland, fertility stayed constant or increased slightly during the following decade Balicki, However recently, with a shift to a free market economy, fertility has been decreasing steadily, despite the fact that the government is pronatalist.
During this time, the political, social and economic changes have been so widespread that it is not possible to identify a causal relationship between the various changes and their accompanying demographic outcomes given the data. Apart from financial incentives to improve the ability of families to cope with the expense of children, families with children may also be materially assisted in other ways. Ermisch, The introduction of forms of reproductive health policy, often focusing on the prevention of unwanted births through abortion, contraception or sterilization, is widely recognized as one of the causes of a fertility decline across Europe Murphy, Spain, for example, currently has the second lowest rate of fertility of the EU Member States behind Italy , and lacks a clear population policy.
However, a generation ago in , Spain had the second highest European fertility rate. The dramatic decline in fertility was associated with a shift from the pronatalist Franco regime — prohibiting contraception — to a democratic regime with a passive population policy. Aside from Spain, most of the literature for Europe focuses on the use of abortion policy in the former communist countries of Eastern Europe. In particular, the case of Romania serves an interesting history of introducing and repealing reproductive health policies throughout the 20th century.
Following October , when abortion then the main instrument of fertility control was restricted to very specific conditions, there was a rapid and unprecedented threefold increase in crude birth rates. According to most of the literature, policies focusing on the compatibility of maternity and work have the advantage of accomplishing two distinct outcomes: i maintaining or increasing fertility rates and ii increasing the size of the labour force.
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Flexible working conditions for pregnant women and women with young children can facilitate reconciliation of employment and parenthood. The two most popular policy measures of this kind involve parental leave and childcare provision. With the increase in female labour participation since the s, maternity and paternal leave became an important form of state support for families Gauthier, During recent decades, maternity and parental leave and benefits have increased considerably Gauthier, While some studies showed that the duration and benefits of maternity leave did not appear to be significantly related to fertility e.
Another common strategy to enable women to combine motherhood and employment is to relinquish responsibility for childcare during the hours that they are engaged in work. Government policies can have an impact on fertility. Spain's marked fertility, for example, decline is associated with a shift from a pronatalist Franco regime to a passive population policy.
In contrast, the high rate of fertility in France 8 can be attributed, at least partly, to one of the most interventionist set of policies aimed at encouraging families to have children.
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In most countries, however, it should be stressed that policies that affect fertility typically have other objectives. For example, in Sweden, family policy and employment policies are linked to the primary objective of allowing couples to combine family formation with work. No single policy intervention by itself will reverse low fertility in all cases.
Historically, governments have had success in slowing fertility declines through a variety of interventions. Furthermore, what works in one country may not work in another. The literature showed that a correlation between the magnitude of social transfers to the family and fertility levels exists in several countries while this correlation is absent in others, although it should be stressed that this in itself does not imply causality.
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Therefore, family policies may be necessary, but not sufficient, for affecting fertility levels. Different interventions have varying effects because of the complex and shifting political, economic and social contexts within which they are implemented. This is perhaps best illustrated with the political transitions of the GDR and Poland. The fertility decline in the former GDR after unification cannot be attributed to specific policy, but rather to a changing social environment. Similarly, the transition to a free market economy in Poland changed the economic environment and incentives for childbearing and also diffused Western ideas and values to broad segments of the public.
As a result, politicians have limited incentive to advocate such policies, especially when political capital could be expended needlessly in entering a contentious policy domain. Consequently, politicians tend to focus on policies that have shorter time horizons. There is a considerable debate in the literature about the desirability, feasibility and effectiveness of these policies.
Related to this is the need for cost containment of welfare as the population ages, notably through the rationing of health care. In the absence of increased economic efficiency this will have a major detrimental impact on Europe's economic future. They are complex because each country and culture is unique and will react to a different combination of policies in different ways.
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They are sensitive because they require governments to intervene and influence the private behaviour of individuals and households. Arguably this is the single biggest — and most predictable — challenge to the Europe's Social Agenda of full employment, economic growth and social cohesion. Our population survey records age at first marriage.
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The age at first birth irrespective of marital status is not widely available at the National or European level. Reference to age at first marriage is ambiguous and not a perfect indication of fertility because of the greater incidence of births occurring outside marriage or preceeding marriage. It has had a dramatic effect on the age structure of Chinese and the welfare of their ageing population. There is much to learn from China but we did not include them in our analysis.
The Chinese population is ageing more dramatically than Europeans. There has been much debate in Europe about changing pensions from pay as you earn to paying taxes at 2 stages in life and taxing old age. We excluded this from our study in order to concentrate on fertility. What would be the impact of later age of retirement on the demographic profile of fertility and population studies?
There is no compulsory retirement at the age of 65 in USA, and perhaps European countries could raise or abolish the mandatory age of retirement. This refers to welfare and policy reform which was not addressed in our survey because we did not speculate if government could influence fertility, although there is much debate about these matters.
The National Health Service is the largest employer in the UK and has plans to increase the retirement age to 65 because public funds cannot afford its pensions. However, this has resulted in industrial action. There are policy reforms which could influence fertility rates but there are difficulties in implementing these policies. Later age of retirement would have no demographic impact, but would increase the support ratio by increasing the working population relative to the elderly, dependent population.
This would reduce the burden on social, welfare, and pension systems. Volume 29 , Issue 1. The factor of the second PCA Factor 2, henceforth called INST 24 is defined by active and passive labour market policies with factor loadings larger than 0. Hence, this factor resumes the degree of flexicurity of national labour market institutions Our econometric specification consists of a multi-level analysis based on our baseline probit model 1.
We allow both the intercept and the impacts of some individual characteristics namely, having small children and co-living with an old-aged dependent to depend on the two country- specific but time variant macroeconomic factors defined above: INST labour market institutional context and POL family oriented policies. Our random coefficient model is composed by a first-level regression at the individual level specified as follows:. We implement Generalized Linear Latent Models to estimate a two-level Random-Intercept Probit model and a two-level Random-Coefficient Probit model, taking into account the nesting of individuals in their country of origin Unlike in the analysis performed in Section 4, we now focus on women in prime-age group because family care burdens, such as child care and elderly care, are less relevant to those in the elder group The model is estimated for the whole sample pooled model and then for each age group separately.
We also test whether and to what extent changes in family policies and labour market institutions affect differently the labour market decisions of women with different levels of education and estimate model 3 for the three education groups primary, secondary and tertiary education The results are reported in Table 7 for the whole sample and in Table 8 for the three age groups Panel A and the three education groups Panel B Regarding the role of family policies POL , the availability of childcare subsidies and child-friendly policies is positively related to the activity rate of women with children and the effect is significant for young women at the early stage of their work life and, quite surprisingly, for medium and high educated women.
Indeed the estimated coefficient is not significant for low-skilled women, whose employment opportunities are limited both in terms of job quality and wages Conversely, policy measures to help women combine caring and job responsibilities have varying effects on the willingness to work of women co-living with an elderly person. The coefficient is in general negative and significant for older age group and low educated women. These results show that the effect of policies on female choice between paid work and unpaid care crucially depends on their outside family options and labour market potential outcomes.
In general, cash benefits increase household income and the reservation wage at which women are available to work. Therefore, more generous supports for child-related and elder-related costs are more likely to discourage the labour market participation of low-skilled women in charge of family care, since their labour market options in terms of wage and type of jobs are poorer. These results imply that the availability of flexicure jobs favours the labour market participation of women with children - especially those women at the beginning of their working career -, by reducing the labour market entry costs.
Women with elderly care responsibility respond differently to changes in the labour market institutional framework. Higher labour flexibility seems to be detrimental for the labour market involvement of women co-living with an elderly person. The result may be related to the fact that only a few countries in Europe have combined the two dimensions of flexibility and security 31 , and, in most cases, deregulation is moving forward without sufficient social compensation. In this respect, the growing availability of flexible low-paid jobs, which very often represent a forced alternative rather than an option for more stable forms of employment, makes unpaid elderly caring more attractive than paid occupations, especially in countries where family caring activities are supported by monetary allowances that can be freely used to complement the family budget This is confirmed by the fact that the negative role of flexibility on the labour market inclusion of women with elder-care responsibilities holds especially for low to medium-educated women whose work opportunities are in general poorer.
To summarize, female labour market behaviour is significantly associated with the institutional characteristics of the labour market and the social policy environment, though this link is mediated by individual characteristics. In particular, social policies aimed at women involved in family care have a strong and significant role on the labour market participation of young mothers with a medium to high level of education. The effect is nevertheless negative when older and low skilled women are involved in elderly care.
Conversely, more flexicure institutions significantly enhance the participation of mothers at early stage of their working career who benefit more of a larger availability of flexible forms of employment and a reduction of the labour market entry costs. The same result does not hold for low-skilled women with elder-care responsibilities.
Our results indicate that social policies and labour market institutional characteristics explain a non-negligible percentage of the female labour market participation across European countries. The variance partition coefficient VPC for the overall model Table 7 is approximately equal to 0. This coefficient increases when the model is separately estimated by age-group and educational level Table 8. The results for the pooled sample are reported in Table 9 ; those for the three age groups and for the different levels of education are reported in Table 10 , Panel A and B respectively.
Table 9 shows that a higher degree of labour flexibility has a positive effect on the activity rate only if it is accompanied by policies which are aimed at guaranteeing access to employment security in terms of both active labour market policies and the inclusiveness of unemployment benefits.
At the same time, a larger degree of security is beneficial to female involvement only in sufficiently flexible labour markets, which provide an easier access to employment.