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Estimating the impact of the economic crisis on families in Europe

25/02/2010

How is the current financial and economic crisis affecting the way Europe is dealing with its ageing population and declining birth rates? How are European families affected? These are the questions that were posed by a European Commission seminar on 22 February, entitled “The impact of the crisis on the Member States’ ability to respond to the challenge of demographic change”. The event gathered experts and representatives of the European Commission, EU Member States, NGOs and family associations.

Need for a greater public family support

The seminar included a series of presentations by European experts who reviewed the repercussions of the crisis on public finances, employment, fertility and public support for families.

“It is vital to step up support for families if we want to do something about our very low birth rates, which may well be exacerbated by the recession and the economic uncertainty it creates for would-be parents” stressed opening speaker László Andor, new Commissioner responsible for Employment and Social Affairs.

Other speakers highlighted a very sharp and continuing increase in public debt across the EU, high unemployment and a decline in working hours, an increasing incidence of short-term contracts and wage reductions. The most affected population groups are young people, as well as low-skilled and immigrant workers. Moreover, men are more likely to suffer from the economic downturn than women.

Anna Cabre from the Centre for Demographic Studies in Barcelona said it was too early to judge the effect the crisis will have on fertility rates, while the life expectancy should not be affected. Ms Cabre said that it is important to maintain public support for families, especially in the countries the most affected by the crisis. 

Families hardly hit by the crisis

In the afternoon workshop on the impact on family support and fertility, several experts and representatives of NGOs and EU governments outlined the early signs of severe impact of the crisis on families.

“Families across Europe are affected by high levels of unemployment and the overall reduction of income levels – in particular single-parent families, which often mean single mothers” warned Céline Simonin, Policy Officer at COFACE. “A strong effort to fight housing exclusion and target vulnerable families with specific benefits and minimum income schemes are essential”, Ms Simonin further stressed.

In addition, experts and government representatives pointed out that several countries, faced with high budget deficits are cutting down on services supporting families. For instance, in Lithuania, Latvia and Estonia, direct benefits for families as well as provisions on maternity and parental leave were reduced. In addition, the crisis affected not only low-income but also medium income families, which suffered through job cuts, reduced working hours, loss of bonus pay, higher mortgage rates and more expensive energy.

It was also highlighted that many European countries have taken positive initiativesto cushion the social impact of the crisis. These often included punctual and temporary measures against financial exclusion, raising benefits and pensions, allowing extra support for households in need, measures to prevent homelessness and develop access to housing.

As far as the impact on fertility is concerned, most of participants were of the opinion that although it is too soon to predict the short term impact, it is very likely that the crisis will negatively affect fertility in the long run. This may particularly be the case in the countries that are the most affected by the crisis, where families face week confidence of in the future and deteriorating financial situation.

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