Effect of the Population Growth Policy on the Economic Growth in France and Germany - Research Paper Example

 Effect of the population growth policy on the economic growth in France and Germany Abstract In France, the redistribution of national income is effected through the family policy. Therefore, the family policy in France has a direct impact to the population and economic growth, and purchasing power. The middle class is aided more than the upper class. This happens through the direct taxation policy. Germany spends hefty amounts on the aging population, raising concerns on the sustainability of the economic growth. This is fueled by the fact that population growth rates indicate the population is likely to be shrinking, with aging being on the rise in Germany. The increased birthrate is subject to numerous factors e.g. sociological, psychological, and cultural factors. The French government, using the family policy ensures the birthrate increases without having a big impact on the living standards. The infant mortality rate in France has fallen by 30 per cent and this has led to increased population. The population growth rate in France and Germany affect the prospects of economic growth directly. Introduction Population growth policy is a deliberately constructed institutional arrangement with specific programs through which governments influence the demographic change. The definition is vulnerable to multiple interpretations. It can also be viewed as a mechanism aimed at bringing qualitative changes into the populace of the territory under the government’s jurisdiction. The additions to membership are effected through births and immigration while losses are caused by death and emigration. Death rate is seen to fall, under health policy leaving the immigration and emigration to be subject to the governmental direction in population growth policy. This paper seeks to look into the effects of population growth on economic growth in France and Germany. The governments of France and Germany have been careful to allow modification of qualitative aspects of population growth policy. This has been tried to the family policy of both countries. The governments targeted the family unit as the most appropriate place to target growth. The policy looks into migration, fertility and the composition of these populations. This happens through the use of demographic factors and spatial distribution of the population. Family policy in France and economic growth The birthrate in France is said to be falling. The lion share of the French national income goes to the family as opposed to other expenditure. The rising standard of living in France has altered the position of women in the society. The French revolution in 1789 left an indelible mark in the demographic trends in the country (Donaldson, 1990). The revolution advanced a social class that believed in low birthrate (Cross & Sheila, 1997). According to Donald, the revolution swept away ancient barriers and promoted an adoption of a free society which was bent on economic prosperity and high standard living. France adopted a population policy that enhanced restriction of family and saving. The aim was to ensure retirement at the earliest opportunity and advancement of children in the society to make them competent (Demeny, 1986). According to Demeny (1986), this calculation resulted in small families. The policy of inheritance had a profound effect of population growth in France. The policy affected the birthrate directly and demanded all children to share father’s wealth equitably (Davis, 1967). The effect of the falling birthrates was grave especially during war. The French had to call the Belgians, Poles and Italians to occupy deserted farmlands and form manpower in the French industries. This was a clear indication that the industrial and social investments were below par in France. There is a close relationship between population growth, economy and social development (Demeny, 1986). During the 1914-18 war, the French lost many men whom are guessed to have had a great psychological influence in France (Donaldson, 1990). The demographic dynamics in France in 1930s were the fundamental reason why the French declined. For France to grow, it needed a reversal of the demographic trends which had taken root for more than one hundred and fifty years. France introduced a policy which had a profound effect on the family in 1939 (Demeny, 1986). The policy dealt with factors that influenced the moral and physical standing of a family (Warwick, 1982). The policy aimed at encouraging birthrate and enhancing social justice. The policy discouraged abortions (Davis, 1967). According to Davis (1967), the policy had a profound effect on the population growth of France. This led to issuance of five different allowances. The policy promoted birthrate and social justice by giving a special allowance if there was only one income earner (Demeny, 1988). The legislation encouraged early marriages and bearing of more than three children in a French nuclear family (Demeny, 1992). France has had disappointing economic tract record in the past few years. The economy of France grew on an average of 2.1 per cent which is slower that of the United States of America. The period between 1980 and 2003, France was faced by many periods of economic difficulties. Projections show that lack of change in France’s productive model resulted in a limitation of growth prospection and high living standards (Cross & Sheila, 1997). The high levels of unemployment and swelling budget deficits pose uncertainty to the French economy. France in faced by a sluggish population growth. This poses a major threat in the labor force and insufficient productivity gains. Family Policy in Germany and economic growth In the year 2001, Germany spent €180 billion on family policy and population growth. This amounted to 9 per cent of the gross domestic product of Germany. Family related tax policies took up a third of the sum while the rests went to income transfers in Germany. According to Bach, Germany pays up to 46 per cent of the cost of her children, which is perceived to be remarkable. Germany has low birthrates and strong population growth policies (Warwick, 1982). In 1995, Germany, through the Christian liberal government passed a law legislation abortion (Seitz & Kempkes, 2007). Abortion is hitherto outlawed in the penal code. However, women cannot be denied abortion. Birthrates in both former East and West Germany had been on the decline since 1960s (Davis, 1967). According to Davis, the GDR came up with measures to increase birthrate and fertility in 1970s. The government motivated parents through paying back part of the loans issued by the state (Dupâquier, 1989). The FRG kept off the pronatalist discourse (Seitz & Kempkes, 2007). The demographic issues and population growth rate were not openly discussed in public (Dupâquier, 1989). Few concerned were raised concerning declining fertility rates and structural hindrances that prevented women from giving birth (Cross & Sheila, 1997). The OECD and the European Union broke the silence by publishing the fertility issues and how they relate to women. The term fertility was introduced in public and the populace was educated on how it affected women education and employment. Germany has spent more than 150 million Euros trying to raise the birthrate. The steady population decline in Germany has raised alarm over the population growth policy of Germany (Dupâquier, 1989). In future, it can have devastating effects on economic growth. The country intends to fill in the gap by importing highly skilled laborers (Warwick, 1982). This has contributed to the next mess since illegal immigrants from Ukraine have caused the security levels of Germany to decline (Davis, 1967). In 2004, Germany had a birthrate of 0.00845, which is extremely low. This was down from 0.00935 in the year 2000. The increasingly aging population in Germany is a reason for concern in the coming days. Germany has a high birthrate than death rate (Warwick, 1982). The economy of Germany faces a prospect of decline as the work force continues to decline and the immigrants seem to be taking over important opportunities (Finkle & Barbara, 1975). The high levels of unemployment in Germany make it difficult for those who want to start a family (Hammermesh, 1993). Government restrictions, bureaucracies and high taxes are some of the reasons job stimulation is low. The German population growth policy has ensured high standards of living. However, the economic growth is likely to be jeopardized by the same policies. Increase in population can end up supporting social welfare and economic growth (Seitz & Kempkes, 2007). The capital essential for economic growth in Germany is diverted to policies that drain the economy (Finkle & Barbara, 1975). This has substantially derailed the German economy and causing high levels of depression. Arguments on France and Germany; France has had a low fertility rate after the Second World War. The entire West was adversely affected by the war necessitating debate for policies that would regulate population growth rate (Hammermesh, 1993). The population growth control policy aimed at altering the structural conditions of both the French and German economies (Davis, 1967). In both countries, the analytical and potential population growth policy enhanced low fatality (Seitz & Kempkes, 2007). The governments were beginning to educate the populace in both countries that the disjunction between the individual reproductive decisions and the interest in long-term demographic equilibrium necessitated the policy (Finkle & Barbara, 1975). Rapid population growth was seen as a burden especially in France after the Second World War. However, the population in Europe grew from 550 million to 730 million in the same period (McKeown, 1976). The baby boom was seen a short term interruption to the fertility measures that was being instituted (Seitz & Kempkes, 2007). At the beginning of the twenty first century, the population growth rate in both France and Germany was 1.4 per cent. The fertility levels continued to decline in most parts of Europe (Hammermesh, 1993). Population increase is considered to be natural (Davis, 1967). This is why some population control policies are still in force in both countries. The difference between the number of births and the number of deaths is positive in both countries (OECD, 2003). The long-term implications of population decline in France and Germany is hardly perceived by the public in both countries (McNicoll, 1975). This has provided a perfect atmosphere for inaction by the government policy makers in both countries (McKeown, 1976). The long term effects of the low population growth rate can be controlled through multiple social factors in France and Germany other than increasing the birthrate. The measures include institutional adjustment and social policies (Seitz & Kempkes, 2007). These governments can potentially increase immigration. France and Germany may not interfere with the population growth rate since reducing high population growth through government policies can be difficult (McNicoll, 1975). The governments are comfortable watching the changes in the population growth and demographics while there is no foreseeable baby boom in the offing (Cross & Sheila, 1997). The policy makers in Germany and France know when the population growth rate in high, the economic growth eventually declines (OECD, 2003). Population growth cannot be sustained indefinitely (Seitz & Kempkes, 2007). Fertility in Germany, East Asia and France settled at two children per woman (McKeown, 1976). The policy maker have identified that fertility decline is important for successful and sustainable economic growth. In Germany, the local government and the state can expect a reduction in expenditure as a result of increasing population of the aged (Davis, 1967). The German government is supposed to raise the federal supplementary grant and social security expenditure (Seitz & Kempkes, 2007). The same trend has already pushed the French economy to straining levels (Pritchett, 1994). The population growth policies are proportional in economic growth in both countries. The government of Germany is considering a sustainable population growth that shall maintain the economic growth in the long-term (Cross & Sheila, 1997). Extreme population growth rates seem to be ineffective (Seitz, 2008). These include very low growth rate and very high growth rate. Economic wellness in Germany and France is a result of demographic balance between the population growth rate, social factors and economic policies on growth. Results and observations France and Germany have experienced the impact of low population in the countries. There is a sense that both countries are not aggressive enough to have a population increase. Germany and France have instead insisted on the quality of life for their citizens. Both governments have incentives that motivate increased birthrate. Germany is said to have a higher death rate than birthrate. This has prompted Germany to relax the immigration rules with the goal at importing highly skilled laborers. The government is staring the possible economic decline to an aging labor force. The purpose of population growth policy in Germany and France is to regulate the population increase with an aim of ensuring high quality of living that is sustainable. France and Germany have spent huge amounts of money encouraging child birth but the economic realities keep the birthrates low with Germany’s birthrate being as low as 8.45 per 1000. The worst case scenario points to increases in contribution rates to pensions and long-term care in both European countries. In Germany the public sector supplies the majority resources to the dependent age groups. This life expectance being on the rise, the dependency period is bound to increase and endanger the government sustainability. Conclusion Germany and France have robust economic policies that have ensured economic growth and sustainability. For the last two decades, Germany has had a tremendous economic growth. However, the population and development need to be guarded by sustainable measures. Rapid population growth can stall economic success. The French and German governments have put measures that regulate population growth rate so as not to impact the economy negatively. However, Germany and France are beginning to get hurt by an extremely low birthrate and aging population. Surprisingly, the near zero birthrate is not getting an emphatic response from the government officials. Understanding the long-term demographic effects of low fertility rates, the public might get involved in regulation of population growth actively. References Cross, M & Sheila, P. (1997) Population and Social Policy in France. London and Washington: Pinter. Davis, K. (1967). “Population policy: Will current programs succeed?” Science 158: 730–739. Demeny, P. (1986). “Population and the invisible hand,” Demography 23:473–487. Demeny, P. 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