As the 21st Century approaches and communism recedes, a new specter is haunting Europe: youth deficits.
By the year 2000, demographers warn that 24 countries--in Europe, Asia and North America plus Australia--will experience a relative drop in the proportion of their populations aged 15 to 24, a segment of the population crucial for labor force replenishment and social stability. By 2010, five more will join their ranks, some of them developing nations with already critical economic problems.
The possible results: labor shortages, "graying" populations with Gargantuan pension and medical expenses, new immigration pressures and declining economic growth.
"We don't really know what the effect will be," one U.S. government analyst said, "but there will have to be a lot of adjustments."
Of course, the news isn't all bad. Countries with fewer 15- to 24-year-olds can expect lower education costs and a lower rate of juvenile homicides, suicides and other types of youth violence.
But nations in different regions of the world are increasingly concerned that a declining number of new entrants into the labor force combined with an increasingly aged society may damage their economies and strain social relations.
In Japan, Shigemi Kohno, director of the Institute of Population Problems, paints a gloomy picture: "The trend of decreasing population of children will badly affect the national pension plan and will lead to the loss of national vital force."
Even the CIA is concerned. In a recent report, the agency identified 21 countries in Western and Eastern Europe as well as eight nations elsewhere in the world that are expected to experience youth deficits over the next two decades.
"Youth deficits are unique in modern history," the agency noted. And while "the range and magnitude of problems that may result is not yet clear," the troublesome trend "portends new societal stress."
The expected deficits are the result of a combination of factors--including improvements in medical care and contraception and increasing prosperity--that limit the desire of couples to have children and extend the lives of the elderly. As a result, birthrates have fallen precipitously in most of Europe, Japan and several other countries since the end of World War II.
The term youth deficit actually is something of a misnomer. For one thing, the total number of youth may continue to increase in a country experiencing a youth deficit but the proportion of youth in relation to older segments of the population will fall.
Analysts say that proportion is crucial for the healthy functioning of a national economy. Younger workers generally have high productivity, for instance. And since national pension plans--like the U.S. Social Security system--depend on current workers to support retirees, policy-makers fear that as the active work force shrinks, the burden on remaining younger workers will increase.
"There will be, in effect, too many dependents per worker," explained Stuart Tucker, an economist at the Overseas Development Council in Washington.
Hardest hit by youth deficits will be the industrial nations of Western Europe and Japan. While demographers in these countries watch the developing trend with interest, governments already are scrambling to offset their consequences.
In Germany, which had the lowest fertility rate in Europe in the mid-1980s, the population of young people is projected to fall from 10.1 million in 1985 to 6.4 million at the turn of the century--a mere 10% of the population.
Unification with East Germany eases the problem only slightly because the former Communist state has experienced a youth deficit of its own since the mid-1980s. The addition of youth from the eastern part of the reunified country will raise the proportion of young people in the German nation by only half a percent to 10.5%.
The effects are already being felt. Once tough-to-get apprenticeships for young workers in German firms now are going begging. In an effort to lure new workers, companies have padded fringe benefits. And in an attempt to use the remaining workers more efficiently, German companies are making large, long-term investments in automation and robotics.
But so far Germany has focused less on the shortage of young people than on the growing number of its elderly. Before reunification, 12 million West German pensioners were supported by 22 million workers. And demographers in the western part of the country had projected that pensioners would outnumber workers 15 million to 14 million by the year 2030.
As a result, the German government last year adjusted the age at which older workers are eligible for government pensions. Starting in 2001, the government will gradually raise the age for full pension entitlement from the current 60 for women and 63 for men to 65 for both sexes.
Authorities have begun to talk about a "demographic time bomb" in Britain, where the youth population already has fallen to the 15% level and is expected to bottom out at 13% in the year 2000.
The Department of Employment has launched a campaign to encourage individual firms to draw up plans for meeting future labor needs. The Confederation of British Industry recently said that the smaller cadre of workers means that training must be improved. "We must abolish the situation," the group concluded, in which "young people leave school at 16 and don't receive any further education or training."
Several British retailers are trying to get a jump on the competition. A drugstore chain, Boots the Chemist, has introduced a novel job-sharing plan that puts two part-time workers in one full-time slot, a strategy that should make it easier for women to re-enter the work force. In addition, Boots offers flexible working-parent contracts that allow employees extensive leaves to be with their children. "This way, Mum can come to work with us and have all the school holidays off, including summer," explained Sandra Ross, a company spokesman.
France enjoys one of the more robust fertility rates in Europe. French women have 1.8 children on average, compared with 1.3 children in Germany and Italy.
One reason is that France, recognizing early the danger of falling birthrates, implemented policies designed to offset the expense of raising children and the difficulty of caring for them during the day. Pregnant women receive cash stipends of $172 each month from the fifth month of pregnancy until their babies are 4 months old. After a third child is born, the entire family is entitled to travel for half price on public transportation. And France has one of the cheapest and most extensive public day-care systems in Europe.
Consequently, the youth deficit will be less severe in France than in other European countries, dropping to a steady 13% in the year 2000 but going no lower.
In Japan, concern has been rising about the korei-ka shakai-- the "aged society"--for years. Japanese population projections show that by the year 2010, the total population above 65 will be larger than the population below 24, which the CIA calculates will equal about 10.5% of the population. And the trend will continue.
The declining number of young workers already has bid up wages for less desirable jobs. The starting wage at McDonald's restaurants in downtown Toyko, for instance, has reached 1,000 yen (nearly $8) an hour and is climbing. Japanese firms, like their German counterparts, are making heavy investments in automation and there is growing talk of permitting greater immigration.
But the Japanese government has done little else to address the situation. Last August, it formed a "Coordination Committee on Improvement of the Overall Condition of Childbirth and Childcare" composed of representatives of various government agencies. But the committee has done little except study the issue.
Elsewhere in the world, youth deficits may not be as great but the economic consequences are liable to be worse.
In Eastern Europe especially, younger and better trained workers may be the key to revitalizing the region's stagnated economies. But it is impossible to predict yet whether dissatisfied youth will flee those countries--worsening the economic situation as well as the youth deficits--or whether newly stimulated economies may attract ambitious youth within the region and even draw immigrants from the Third World.
Also, the ever-growing population of pensioners is likely to strain the resources of those fragile economies. In Bulgaria, for instance, one out of four citizens already draws retirement income from the government.
And in the Soviet Union, where rural agriculture remains perhaps the largest economic challenge for Moscow, young people have disappeared from the countryside. In Yablonka, a village 200 miles northwest of Moscow, the two youngest residents are 42 and 58 years old. Ethnic tensions make it unlikely that Moscow will encourage the migration of youth from Central Asia--where the population continues to grow five times faster than in European regions of the country.
Other Western countries expected to experience youth deficits in the next two decades include Austria, Belgium, Denmark, Finland, Greece, Italy, the Netherlands, Portugal, Spain, Sweden and Switzerland. In the East, China, Taiwan and South Korea will share problems similar to that of their neighbor, Japan.
There are several solutions to the labor force shortages caused by youth deficits. One is increasing automation, which Japan and Germany are attempting. But automation is unlikely to solve the entire problem, and experts expect immigration pressures to grow--especially as Third World populations continue to multiply.
But immigration remains an unpopular option in much of Europe. At a recent Council of Europe meeting in Strasbourg, the declining European work force was a hot topic of conversation, but few countries seemed willing to contemplate increasing levels of immigration except as a last resort.
"You have to remember that European countries don't have a melting pot tradition," said Carl Haub, a demographer at the Population Reference Bureau in Washington. "Their attitude is that there are other ways to accommodate this change."
Meanwhile, some demographers dispute whether a decline in the youth population is a problem at all.
"Most economists take the view that the prospective decline in the pool of young workers is a positive thing," said Richard Easterlin, a USC economist.
He contends that the trend is likely to make things easier for the down-sized generation by bidding up wages, easing family strain and reducing competition for jobs. "The usual problem is with labor surpluses," he said. "There are more benefits to youth deficits than drawbacks."
But others are more cautious.
"There have been population cycles throughout human history," said Haub of the Population Reference Bureau, "but at no point have countries had as low birthrates for such a period of time as we are currently observing. The fact of the matter is that we don't know what this means."
Times correspondents Joel Havemann in Brussels, Tyler Marshall in Berlin, Stanley Meisler in Madrid, Michael Parks in Moscow, Karl Schoenberger in Tokyo, Mary Williams Walsh in Toronto and Carol J. Williams in Budapest contributed to this article.
A SHRINKING GENERATION
Demographers predict the number of 15- to 24-year-olds in many countries will shrink by the start of the next century. Hardest hit by this so-called deficit will be the industrial nations of Western Europe and Japan. Right: A man and his granddaughter shop in Japan, where population projections show that by the year 2010, the total population above 65 will be larger than the poplutation below 24. Bottom: Youths in Budapest, Hungary. Eastern Europe is waiting to see whether dissatisfied youth will leave or whether newly stimulated economies will attract ambitious young workers.