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An Aging Europe in Decline

by Arthur C. Brooks

New York TimesEditorial

Ive fallen and I cant get up. These words, shouted by an elderly woman, were made famous in a

medical alert device ad in the 1990s. In 2015, they might be Europes catchphrase.

As the United States economy slowly recovers, analysts across the political spectrum see little to cheer

them from Europe. The optimists see the regions economy growing by just 1 percent in 2015; many

others fear that a triple-dip recession is in the offing. Germany is widely viewed as a healthy country

whose prosperity helps compensate for Europes weakness, yet over the past two quarters for which we

have data, it has experienced no net growth at all. Predictions of decade-long deflation, low

productivity and high unemployment are becoming conventional wisdom.

What does the Continent need? Most economists and pundits focus on monetary and fiscal policy, as

well as labor-market reform. Get the policy levers and economic incentives right, and the Continent

might escape the vortex of decline, right?

Probably not. As important as good economic policies are, they will not fix Europes core problems,

which are demographic, not economic. This was the point made in a speech to the European Parliament

in November by none other thanPope Francis. As the pontiffput it, In many quarters we encounter a

general impression of weariness and aging, of a Europe which is now a grandmother, no longer fertile

and vibrant.

But wait, it gets worse: Grandma Europe is not merely growing old. She is also getting dotty. She is, as

the pope sadly explainedin an earlier speech to a conference of bishops, weary with disorientation.

Some readers might regret the popes use of language we love our grandmothers, weary with

disorientation or not. But as my American Enterprise Institute colleague Nicholas Eberstadt shows in

his research, the popes analysis is fundamentally sound.

Start with age. According to the United States Census Bureaus International Database,nearly one in

five Western Europeans was 65 years old or older in 2014. This is hard enough to endure, given the

countries early retirement ages and pay-as-you-go pension systems. But by 2030, this will have risen

to one in four. If history is any guide, aging electorates will direct larger and larger portions of gross

domestic product to retirement benefits and invest less in opportunity for future generations.

Next, look at fertility. According to the Organization for Economic Cooperation and Development, the

last time the countries of the European Union were reproducing at replacement levels (that is, slightly

more than two children per woman) was the mid-1970s. In 2014, the average number of children per

woman was about 1.6. Thats up a hair from the nadir in 2001, but has been falling again for more than

half a decade. Imagine a world where many people have no sisters, brothers, cousins, aunts or uncles.

Thats where Europe is heading in the coming decades. On the bright side, at least there will be fewer

Christmas presents to buy.

There are some exceptions. France has risen to exactly two children per woman in 2012, from 1.95 in

1980, an increase largely attributed to a system of government payments to parents, not a change in the

culture of family life. Is there anything more dystopian than the notion that population decline can be

slowed only when states bribe their citizens to reproduce?

Finally, consider employment. Last September, the United States labor force participation rate the

percentage of adults who are either working or looking for work reached a 36-year low of just 62.7

percent. Yet as bad as that is, the United States looks decent compared with most of Europe. Our

friends across the Atlantic like to say that we live to work, while they work to live. That might be

compelling if more of them were actually working. According to the most recent data available from

the World Bank, the labor force participation rate in the European Union in 2013 was 57.5 percent. In

France it was 55.9 percent. In Italy, just 49.1 percent.

http://www.aei.org/publication/europes-sputtering-economic-locomotive/http://topics.nytimes.com/top/reference/timestopics/people/f/francis_i/index.html?inline=nyt-perhttp://topics.nytimes.com/top/reference/timestopics/people/f/francis_i/index.html?inline=nyt-perhttp://w2.vatican.va/content/francesco/en/speeches/2014/november/documents/papa-francesco_20141125_strasburgo-parlamento-europeo.htmlhttp://w2.vatican.va/content/francesco/en/speeches/2014/november/documents/papa-francesco_20141125_strasburgo-parlamento-europeo.htmlhttp://www.catholic.org/news/international/europe/story.php?id=57785http://www.census.gov/population/international/data/idb/informationGateway.phphttp://www.census.gov/population/international/data/idb/informationGateway.phphttp://data.bls.gov/timeseries/LNS11300000http://topics.nytimes.com/top/reference/timestopics/people/f/francis_i/index.html?inline=nyt-perhttp://w2.vatican.va/content/francesco/en/speeches/2014/november/documents/papa-francesco_20141125_strasburgo-parlamento-europeo.htmlhttp://www.catholic.org/news/international/europe/story.php?id=57785http://www.census.gov/population/international/data/idb/informationGateway.phphttp://data.bls.gov/timeseries/LNS11300000http://www.aei.org/publication/europes-sputtering-economic-locomotive/

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One bright spot might seem to be immigration. In 2012, the median age of the national population in

the European Union was 41.9 years, while the median age of foreigners living in the union was 34.7.

So, are Europeans pleased that there will be new arrivals to work and pay taxes when the locals retire?

Not exactly. Anti-immigrant sentiment is surging across the Continent. Nativist movements performed

alarmingly wellin European Parliament elections last year. Europe is less like a grandmother knitting

placidly in the window and more like an angry grandfather, shaking his rake and yelling at outsiders to

get off his lawn.

None of this should give Americans cause for schadenfreude. At a purely practical level, a European

market in further decline will suppress American growth. But more important, European deterioration

will dissipate the vast good the Continent can do in spreading the values of democracy and freedom

around the world.

So what is the prescription for Europes ills and the lesson for Americas future?

It is true that good monetary and fiscal policies are important. But the deeper problems in Europe will

not be solved by the European Central Bank. No matter what the money supply and public spending

levels, a country or continent will be in decline if it rejects the culture of family, turns its back on work,

and closes itself to strivers from the outside.

Europe needs visionary leaders and a social movement to rediscover that people are assets to develop,

not liabilities to manage. If it cannot or will not meet this existential challenge, a lost decade will

look like a walk in the park for Grandma Europe.

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