You know Your Survival Guy is worried about Italy’s low birth rates. But just as worrying is France, which is witnessing its lowest birthrates since just after WWII. Can you imagine? Fertility rates in France have fallen to 1.8.
After Spain and Italy, it is now France’s turn to publish alarming figures on the state of its birth rate. According to the national statistics agency, INSEE, the year 2023 will be particularly “weak” for births. In the first quarter, France recorded 7% fewer births than in 2020, before the pandemic—the lowest monthly level recorded since 1994, the year in which reliable monthly statistics are available.
This rate is historically low, except for the very special period during the first phase of the pandemic. The decline is general, but unevenly spread across the country. The most significant drop is in the southern region of Occitania, which recorded a decrease of 11%. Ile-de-France is also affected. The overseas territories, on the other hand, are not affected by the collapse, and there is still an increase in births there—particularly thanks to the special case of Mayotte.
However, it would be inaccurate to read into the results for the first quarter of 2023 an unexplained break. The figures recorded by INSEE are merely the result of a downward trend that began a long time ago. The year 2022 had already marked a record low, comparable to the situation in the immediate post-war period (1946).
Only the COVID period presents a particular profile, with the effects of a halt in births (related to the confinements) followed by periods of catching up (with a birth explosion in 2021).
The decline in the birth rate is primarily a consequence of a steady decline in the fertility rate, which has shrunk since 2015. For a long time,, France was able to boast of a fertility rate close to 2 children per woman in the 2000s—the generation renewal threshold being set at 2—its fertility rate is now around 1.8.
Specialists from the INED (Institut National d’Etudes Démographiques, National Institut for Demographic Studies), interviewed by France info, refuse to sound the alarm at this stage and think that it may only be a question of alternating upward and downward phases that compensate for each other, which precludes a lasting and inescapable decline in French fertility. In any case, the overall trend highlights the problems posed by the pay-as-you-go pension system in France, which must rely on dynamic demography to finance itself.
Action Line: America has the same “pay-as-you-go” pension system that France and Italy have; it’s called Social Security. America is also facing some of the same demographic issues as Europe. The takeaway for prudent investors hoping for an enjoyable retirement is to save ’til it hurts. The pension system is not a guarantee. It’s up to you to provide for your family in retirement. When you want help making a plan, let’s talk.
Originally posted on Your Survival Guy.