Last semester I took a core class at Hertie, called the “Public Policy Process – German Budgeting”. As our final project, we were supposed to get into the shoes of the German Ministry for Family, Senior Citizens, Women and Youth (you don’t want to imagine how the full name sounds in German) and propose a new budget for 2010 for our ministry.

Initially, I thought I would learn a bit of number crunching and plenty of insights into German politicking. I ended up learning more about family/ population policy and demography (especially within a OECD context) than I ever imagined. Also, I ended up being totally alarmed by how little attention decision-makers pay to these matters. In Germany, they are at least on the agenda, while in Romania… Oh, my!

Going back to our case study, the Statistical Office of Germany basically expects the country’s population to shrink from 82.5 million inhabitants in 2006 to 65-70 million by 2060.  This might not seem terrible at first sight, but here’s what’s behind the figures: Germans are constantly living more – by 2060 the average German citizen will live 7 years longer than he/ she is expected to live now. However, Germany has one of the lowest fertility rates in Europe, i.e. 1.38 children/ woman (compare that to 2.1 children/ woman, which is the rate it takes for the population of a country to replenish itself). Only Central and Eastern European countries score worse than Germany, while France and the UK have begun to increase their rates, as a consequence of some very smart public policies. Thus, because on the hand people live more and, on the other hand, people have less children, in 2060 there will be 94 dependent persons (children and senior citizens) for each 100 Germans. Out of these 94 persons, two thirds will be senior citizens and one third only children. 10 million out of Germany’s predicted 65 million citizens will be women and men older than 80.

What does this mean in terms of impact on social security, urban development, healthcare? Roughly, it means disaster! What’s worse even, it’s a disaster the full countours of which are still difficult to predict.

However, the good news is that smart policies can make the picture a little less gloomy… Just look at how the age piramids below like… An increase of just 0.2 in the current fertility rate can work wonders.

How can Germany achieve this? Well, by implementing two simple solutions (so simple that I was totally amazed they hadn’t been applied yet):

•        target increases in parental allowances at the second child (and subsequent children)
•        extend daycare and kindergarten working schedules until 7 pm (it’s amazing how German women simply cannot work and be mothers at the same time because they don’t have enough facilities to leave their children and the few which exist close at 1 pm!!!)

To conclude, I was totally amazed during this project to discover how different family policies can be in two relatively similar OECD countries (France and Germany) and how simple, common sense solutions can work wonders in population policy. And yes, demography can be more exciting than I thought!