The Bigger Picture
Published on March 26th in Metro Éireann By Charles Laffiteau
In my follow up to last week’s column, this week I will attempt to explain why France and the United States have the two of the highest fertility rates of all the developed countries in the world as well as why economists and some politicians view this as positive factor for their country’s future financial health and well being.
Believe it or not, by the end of the 18th century France was actually the most populous country in Europe and the third most populous country in the world, behind China and India. Unlike the rest of 19th century Europe, France also saw very few of its citizens immigrate to America. But during the 19th century, France’s fertility rate began to decline much faster than other European countries, causing France to fall behind Russia, Germany, the UK and Italy as Europe’s fifth most populous nation in 1900. France’s low fertility rates also resulted in virtually no population growth between 1900 and 1945 at a time when other European countries, including Ireland, had booming populations and much higher fertility rates than they do today.
In an effort to avoid the negative economic consequences of declining population, France undertook efforts to increase immigration by encouraging citizens from its colonies in North Africa and Indochina as well as those living in other countries in Southern and Eastern Europe to immigrate to France following the end of World War I. Even though fertility rates in France and other developed countries soared following the end of World War II, France still continued to encourage immigration from its former colonies in North Africa, particularly Algeria until the mid-seventies. Today France has over 3 million citizens who are of Algerian descent, many of them 3rd or 4th generation.
But beginning in the seventies fertility rates in America and all other developed countries began to decline thanks largely to women in those countries entering the workforce, delaying both marriage and childbirth, which in turn meant fewer children. Today, the only reason why countries in Europe with low fertility rates like Germany and Spain have thus far avoided population declines has been because of increases in immigration. But thanks to France’s success integrating its immigrants, its fertility rate is the highest in Europe even though France stopped encouraging immigration 30 years ago.
While France’s 2.0 fertility rate still falls short of America’s and the developed country population replacement rate of 2.1 children per couple, France’s immigrant women from North Africa and Turkey are at least partially responsible for this. Native French women only have an average of 1.7 children each but their immigrant women counterparts give a boost to France’s fertility rate by having almost 3 children per woman. Since France has a chronically high unemployment rate, especially among its immigrant population and their descendants, I asked some French immigrants why they wanted to have 2 or more children given such bleak future employment opportunities.
They told me that while their children may have difficulty finding jobs once they reach adulthood; they still believed that their children’s future job prospects would be roughly equal to those for the children of native French people. But they also told me that the French government had numerous income-based policies such as free child care and tax benefits, which encouraged women to have more children than they might otherwise. They went on to say that even higher income families received many of the same benefits such that only a fraction of any working woman’s income had to be spent on child care.
I thus concluded that the reason why France has grown to become the 3rd most populous country in Europe was because it had both opened its doors to immigration at the beginning of the 20th century and then it instituted policies to encourage impregnation in the latter half of the 20th century. I also concluded that the reason France now has the highest fertility rate in Europe was because it had been more successful than other European countries, in terms of integrating immigrants into French society through its use of government policies that treated all of its native citizens and immigrants equally.
Hmm, increasing Immigration plus better Integration equals more Impregnations. I + I = I+ So my formula, D+E=F+ or (cultural) Diversity + Equality (of opportunity) = Fertility + (higher rates of) appears to explain what is going on in France. But will it also work to explain why America has the highest fertility rate for developed countries? How would this formula work in America, given the fact that the United States doesn’t have anything close to France in terms of policies that encourage women to have children?
Well before we examine America’s fertility rate in more detail, maybe we should discuss why I think increasing immigration and or higher fertility rates bode well for all citizens living in more developed countries. Precisely why do economists and politicians view this as positive for developed countries’ future financial health and well being?
To be sure, if having a larger population was the key to the door of greater economic power then China and India would be the most powerful developed countries in the world instead of the world’s most populous developing nations. Most people believe that a larger population diminishes their quality of life by exacerbating problems like urban sprawl and strains on countries’ transportation and education infrastructures. It’s also a fact that increased immigration leads to more competition between a country’s native citizens and immigrants for economic resources and increased social tensions.
But allowing a country’s population to decline means its labor force will become older, smaller and less productive. This has major implications for public policy given the fact that developed countries also have to provide pensions and health care for their retirees. As the workforce gets smaller, governments will have to steadily increase taxes of the remaining workers in order to pay for their retirees’ healthcare and pensions. Isn’t there a better solution? Let’s discuss one next week.