Unequal Neighbours

Germany and France follow very different demographic trajectories - with significant long term consequences

By Stephan Sievert and Reiner Klingholz

 

This paper was sponsered by the Robert Bosch Foundation.

Click here (PDF) to view the full German version of the study.

 

Whoever crosses the border to our western neighbour at Kehl or Saarbrücken, enters a country with a fundamentally different demographic development: While in Germany, the number of deaths has been exceeding births every year since 1972, as a result of which the population only grew thanks to immigration until 1993 and is even shrinking ever since, the French population is increasing continuously - 2008 by about 350,000 people. The surplus of births over deaths accounts for four fifths of the annual 0.5 per cent increase, while immigration represents the remaining the rest.

According to projections carried out by the National Bureau of Statistics (Statistisches Bundesamt Deutschland), Germany’s population is set to shrink by eight to 14 million people until 2050. In the same period of time, France is estimated to gain eight million inhabitants. Therefore, it is quite likely that France will have more inhabitants than Germany by the mid-21st century, although "La Grande Nation" is currently trailing by some 20 million. As the population of France will additionally stay considerably younger than the German one, both countries' economic power might shift in favour of France. This is the assumption of the new discussion paper "Unequal Neighbours" of the Berlin Institute for Population and Development.

The diverging developments of the two countries can to a large extent be ascribed to fundamentally different family policies. In France, family policy has a long tradition and is based on the "Code de la Famille", which was passed in 1939. The codex was introduced, among other reasons, because the French were worried that their archenemy, Germany, would outperform them in terms of manpower. Initially, the policy was supposed to support the male breadwinner model, but was adapted to the new social reality of two-earner-households in the 1970s. At this time, France was a pioneer in establishing childcare services even for the under three-year-olds, which allowed the country to increase female labour force participation without plummeting birth rates as could be witnessed in Germany.

During the post-war baby boom, women in both France and Germany gave birth to more children than today. However, while fertility rates in Germany declined significantly in the mid-1970s and have been fluctuating around the number of 1.4 children per woman ever since, French rates have never dropped below 1.7 and have even climbed back to about 2.0 children recently. Since the decimated generations of German women, who were born in the 1970s and after, are in the midst of their childbearing careers today, the downward trend is gathering pace: Since the 1960s, the number of newborns has halved - from 1.35 million to less than 700,000 per year. Furthermore, due to the constantly shrinking cohorts of potential mothers, this figure is likely to decrease even further. The picture looks different in France: Here, around 750,000 children are being born every year for quite some time already.

The neighbouring countries also differ when it comes to migration: France has been recording net immigration of maximum 200,000 people for the last 40 years. Germany's migration figures, on the contrary, exhibit considerable upward deflections: in times of the guest worker immigration, but also after the end of the Cold War, when around three million ethnic Germans from the former Soviet Union, and in consequence of the Yugoslavia War, numerous refugees entered the country. Meanwhile, however, the attractiveness of Germany as an immigration country has declined considerably. In 2008, statisticians observed net immigration of a mere 4,800 people. That same year, France welcomed 67,000 immigrants, mostly North Africans, who reunited with their families in Europe. In France, both nationals and foreigners have more children than their respective counterparts in Germany. 

However, even France is not spared from the trend of demographic ageing. Not only because life expectancy is increasing steadily in both countries - the French figures of 84.4 years for women and 77.5 years for men are even significantly higher than in Germany, where women average 82.3 years, while men can expect 76.9 life years -, but also because the French have less children than in the past. Here too, a generation of families with many children is replaced by one with comparatively few, although at a different level than in Germany. While in Germany the share of under 20-year-olds in society will decrease from 19.5 per cent in 2007 to 15.1 per cent in 2050, in France it will drop from 24.7 to 21.9 per cent. Analogously, over the same time period the share of over 64-year-olds will rise from 19.9 to 33.2 per cent in Germany, while, in France, it will only reach 26.2 per cent in 2050 - up from 16.5 in 2007.

At a rate of two children per woman, the number of people of working age - defined here as 20 to 64 years - will remain constant in France until 2050. In Germany, however, the potential labour force will shrink by almost 15 million. This development is expected to have impact on both countries' economies. While Germany outscores its neighbouring country by far in terms of absolute GDP, GDP per capita is nearly the same in both countries. In view of Germany's rapidly ageing society, France could not only overtake its Eastern neighbour population-wise, but also economically. Germany will need to massively invest in education and be able to trigger innovations as well as to raise productivity levels in order to compensate for its labour shortages.

Due to the proceeding demographic ageing, the two countries will find it increasingly difficult to finance their health care and pension systems. Particularly in France, the low employment rate of the 55- to 64-year-olds is an increasing matter of concern for policy-makers. While a retirement age of 67 is a settled matter in Germany, the French public is still debating - despite a higher life expectancy - if it is reasonable to continue working after having celebrated one’s 60th birthday.