Is Public Policy Valuing Families in Europe? Ricardo Arroja Brussels, October 17 th 2016

Transcription

1 Is Public Policy Valuing Families in Europe? Ricardo Arroja Brussels, October 17 th 2016

2 Assessing the current situation

3 Background Decades of sustained decline in fertility indicators Demographic sustainability part of the political agenda Ideological bias need not be an obstacle to public policy

4 Total Fertility Rate ( ) 30% 0% 0% 15% 15% 40% Source: EUROSTAT Analysis APFN

5 Changing generational dynamics ( ) 2,2 Total Fertility Rate (TFR) ,1 2,0 1,9 1,8 1,7 1,6 1,5 1,4 1,3 1,2 1,1 Republic of Macedonia Cyprus Portugal Luxembourg Malta Norway Finland Netherlands Poland Ireland Belgium Switzerland Estonia Austria Greece France Italy Spain United Kingdom Lithuania Romania Sweden Slovenia Latvia Czech Republic 1,0 30% 20% 10% 0% 10% 20% 30% Growth rate TFR 2000 and 2014 Source: EUROSTAT Analysis APFN

6 Fast forward to present family public policy 2011 GUE/NGL (left wing) S&D (centreleft) Alde (liberal) EPP (centre right) ECR (conservativeright) Independent Blue Group: France: UMP (EEP) Ireland: Fianna Fáil (Alde) United Kingdom: Conservative Party (ECR) Green Group: Spain: PSOE (S&D) Germany: CDU (EEP) Greece: PASOK (S&D ) Source: Guardian Research

7 Understanding the impact

8 No longer a demographic pyramid (2015) 85+ anos anos anos anos anos anos anos anos anos anos anos anos anos anos anos anos 5 9 anos 0 4 anos Men Women EU 28 5,00% 4,00% 3,00% 2,00% 1,00% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% (%) Age Group Structure, Resident Population EU28 Source: EUROSTAT Analysis: APFN

9 No longer a pyramid (2060) 85+ anos anos anos anos anos anos anos anos anos anos anos anos anos anos anos anos 5 9 anos 0 4 anos Men Women EU 28 6,00% 4,00% 2,00% 0,00% 2,00% 4,00% 6,00% (%) Age Group Structure, Resident Population EU28 Source: EUROSTAT Analysis: APFN

10 Portugal s population by age group 100% 90% 80% 70% Portugal a 64 60% 50% 40% 20 a 39 30% 20% 10% 0 a 19 0% Source: EUROSTAT AnalysisAPFN

11 France s population by age group 100% 90% France % 70% 40 a 64 60% 50% 40% 20 a 39 30% 20% 10% 0 a 19 0% Source: EUROSTAT AnalysisAPFN

12 Demographic and generational gap % additional births needed each year to achieve Total Fertility Rate of 2,1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Portugal (% needed unborn children) Portugal is 1.5 million births short since 1982 to ensure generational renovation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Spain (% needed unborn children) 100% 80% 60% 40% 20% 0% United Kingdom (% needed unborn children) 100% 80% 60% 40% 20% 0% France (% needed unborn children) Source: Eurostat Analysis APFN

13 Mean age of women at first birth (2014) Source: OECD Analysis APFN

14 Childlessness (2015, women born in 1965) 25% 20% 15% 10% 5% 0% Source: OECD e INE Analysis APFN

15 Understanding the causes, a look at recent policies

16 Public Expenditure on Family (% of GDP, 2011) 4,50% 4,00% 3,50% Tax breaks towards families 3,00% 2,50% 2,00% Services 1,50% 1,00% 0,50% Cash 0,00% Source: OECD Analysis APFN

17 Family and income tax France: Income tax is progressive A so called Family quotient (income is divided by the numbers of family members, where a coefficient is applied to dependents, before income tax is calculated. Households are taxed according to their standard of living, which for the same level of income will vary depending on household size) Germany: Income tax is progressive Child related tax deductions and tax deductible childcare expenses Source: KPMG

18 A new look at family equivalence scales 1 child = 1 The economies of scale fallacy Family life is rather based on economies of sharing The idea of Fairness implies not restricting a family s decision into having (or not having) children.

19 Family and public provision of services Education (pre school, basic, secondary, and upper level) Health (including dental services for children) Transportation (for children and family)

20 Family and public transfers Child and parental benefit payments Parental paid work leaves Family income supplements Part time work incentives for companies Pension bonuses for childcaring parents

21 Best practices policy examples (2014) France United Kingdom Sweden Ireland Income Tax Family Coefficient Health Service Mostly Free Education: Public Schools are free, plus école libre are supported by the state Transports: discounts for large families Child Benefits: family transfers to families represent 2,6% of GDP (some are mean tested) Child Benefits Universal benefit (up to 500 /week) Child Trust Fund Child Tax Credit for under 16 children (up to 3000 /year) Maternity Pay, Maternity Leave e Maternity Allowance Comprehensive leave paid at 90% of income (52weeks) Parental Leave: Leave paid at 80% of income (480 days). At the end of the leave parents can reduce the work hours up to 25% until the child is 8. Child benefits: Universal benefit (115 per child) Education: Both preschool and higher education are free Health: Free (including dentist) Public urban transports: Free for families with small children Maternity benefit: up to 230 /week Maternity leave: 26 paid weeks plus 16 weeks unpaid leave Child benefit: universal benefit (130 /month per each child) Family Income Supplement (FIS): 60% of the difference between the 21 established limits to the FIS and the weekly net income of the family Sources: Governmental Agencies Analysis APFN

22 Family public transfers (% of annual income) Simulation of the total amount of children related transfers over 20 years, considering a family of five (mother, father, and three children born in three years intervals). Based on 2014 family public policy. Years Since the birth of the first child Portugal Ireland Spain Sweden 5 9% 66% 5% 15% 10 11% 86% 7% 22% 15 11% 92% 7% 24% 20 10% 94% 7% 22% Sources: Governmental Agencies Analysis APFN

23 Transfers versus Paid Leaves (2014) Family with 3 children average anual income Trasnfers (% of average of anual income) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Hungary GreeceSpain Ireland France Austria Portugal Belgium United Kingdom Finland Germany Sweden Poland Norway Luxembourg Sources: Governmental Agencies Analysis APFN Leaves paid at 100% (weeks) 23

24 Final remarks

25 Design of family public policy Universal support families without eligibility criteria Means tested Child related subsidies Special subsidies support dependent on income levels single payments not continuous indirect benefits other types of benefits Source and Analysis APFN

26 Array of family public policy System wide policies covering a wide range of family life areas for most of the child dependent life Birth policies aimed at encouraging the birth of children and helping with the costs of the child early age Low income policies aimed at covering parts of the costs of raising a child for families with low income Source and Analysis APFN

27 Comprehensive family public policy Universal Positive Stable Coherent Freedom promoting Not targeted just at low income social economic groups nor at just women or men Oriented towards seeing children as an investment rather than a burden Reducing the uncertainties of having children Covering all the phases of family development Support parental decisions regarding desired fertility, childcare, and family choice. 27 Adapted from REPRO PROJECT Maria Rita Testa

28 In sum A childless world is both inhumane and unsustainable Family Public Policy need not be ideological nor class based Indeed, it ought to be seen as an investment for a better future

29 Thank you.