Friday, July 03, 2009

Germany's Shrinking East

Here at Demography.Matters and elsewhere, we are talking a lot about the economic effect of demographic changes. However, demographic changes not only entail economic changes, but also social changes and quite often these two go hand in hand (as Randy and Aslak have excellently expositioned lately). A recent piece by Nicholas Kulish in the NYT provides a timely, and further, reminder to that point as it describes the effects of Germany's broken demographics in the context of its Eastern premises.

In this, the 20th year since the fall of the Berlin Wall, Chancellor Angela Merkel’s government is preparing for a host of celebrations and commemorations leading to the November anniversary. The official story of an eastern revival was reinforced by President Obama’s recent visit to Dresden in all its reconstructed glory. But outside big cities like Dresden, Leipzig or Berlin, in places like this former industrial mining town, the story of decline and departure has changed little in the former East Germany. Not far beyond the few thriving urban centers, traffic is often spare on the freshly paved highways, and at night in parts of Mecklenburg-West Pomerania in the northern part of the country, there is hardly a light to be seen to either side of the autobahns.

In a popular song a few years back, the performer Rainald Grebe described a feeling of solitude by singing, “I feel so empty today, I feel Brandenburg,” referring to the former East German state that surrounds Berlin. Newspapers track the return of wolf packs to Saxony along the Polish border on the one hand, and the continued migration of the young and the educated to the greater opportunities in the west on the other.

When German government officials last week presented their annual report on the state of unification and the attempts of the former East Germany to catch up to the west, the picture they painted was overwhelmingly positive, but not exactly complete. The government accurately reported that it had spent more than $60 billion supporting businesses and building infrastructure from 2006 to 2008 alone. And economic activity per person has risen to 71 percent of the former western sector’s from 67 percent over the course of this decade.

“Thanks to positive economic development, the east is on the best track to converge with the west,” said Wolfgang Tiefensee, the minister responsible for the development of the former East German states. “The gap is closing.”

It is closing partly because the export leaders taking the hardest hits in the economic downturn are in the west, a leveling down rather than up. Unemployment in the former East Germany remains double what it is in the west, and in some regions the number of women between the ages of 20 and 30 has dropped by more than 30 percent. In all, roughly 1.7 million people have left the former East Germany since the fall of the Berlin Wall, around 12 percent of the population, a continuing process even in the few years before the economic crisis began to bite.

And the population decline is about to get much worse, as a result of a demographic time bomb known by the innocuous-sounding name “the kink,” which followed the end of Communism. The birth rate collapsed in the former East Germany in those early, uncertain years so completely that the drop is comparable only to times of war, according to Reiner Klingholz, director of the Berlin Institute for Population and Development. “For a number of years East Germans just stopped having children,” Dr. Klingholz said.

Now, the issue of Eastern and Western Germany is of course not a new one and essentially traces right back to the reunification and the fact, as many scholars have pointed out, that Germany basically provided the world with a great social experiment. One of the effects from this experiment, as Dr. Klingholz points out, was that women in East Germany essentially stopped having children all together. In a paper from 1994detailing the immediate evolution of East German fertility in the context of the reunification process, Nicholas Eberstadt shows how births in East Germany indeed did fall dramatically. From 1988 to 1992 the total number of live births fell from 215700 to 88300 which translates into a drop in the crude birth rate from 12.1 to 5.6.

While the relative decline in Eastern Germany since the end of Communism can be fitted to historical parallels, albeit not without difficult, the absolute level of fertility now being recorded [1993] in that territory appears to be a completely new phenomenon - at least, for sizable naturally constituted populations. Eastern Germany's adults appear to have as close to a temporary suspension of childbearing as any such population in the human experience.

According to Eberstadt and given the information available at the time, the drop was especially severe because fertility dropped sharply among women aged 25-34 and thus among those women in their prime age with respect to childbearing. Furthermore, Eberstadt also shows how marriage rates declined sharply during the transition from communism. Marina A. Adler notes that the highly insecure environment following communism made women reluctant to engage in the kind of long term commitments which marriage and child rearing constitutes. In fact, the almost effective halt in childrearing occuring in East Germany is not so unique in the general sense since the fall of communism also marked a decisive structural break in the context of the fertility behavior of an entire generation of women all across the Eastern European edifice. In this sense, Sobotka offers a comprehensive view of the drivers of the fertility transition in the context Eastern Europe.

The ultimate effect of the shift in an Eastern Germany context was remarkable; Eberstadt estimates that the TFR had fallen to an astonishing 0.98 in East Germany by 1991.

Of course, in a bigger perspective this extraordinary squeeze on births in East Germany only served to accelerate an already rapid demographic transition which saw fertility rates in Germany collapse to a TFR of 1.28 in 1994 from where they have since recovered ever so tepidly to the current 1.41 (2008 estimate). Together with a steady increase in life expectancy, this has produced a process og ageing in Germany only, at this point, rivaled by that of Japan.

The issue in the context of East Germany is a well known one in the sense that all those ideas about East Germany rapidly catching up the standards of West never really bore out; at least not in a general sense. According to the Berlin Institute for Population and Development, East Germany harbour three out of the ten most rapidly shrinking regions in Europe and in a world where mobility among the young is high, this has initiated a cycle by which the young people leave as fast as they can further aggravating the dearth of young productive people as well as the simple fact that the number of potential mothers are dropping fast. Yet, the fertility picture in Germany is quite complex since for example there are more childless women in the West than in the East;

As reported by the Federal Statistical Office, in March 2004, 30% of German women aged 37 to 40 years (birth cohorts of 1964 to 1967) in the former territory of the Federal Republic were childless, that means, there were no minor children in the household. Childlessness was markedly lower among German women of the same age in the new Länder and Berlin-East (22%) and among foreign women in Germany (21%).

In fact, in a paper from 2000, Jennifer Hunt from McGill University asks the simple question of why anyone would want to live in East Germany at all given the income and unemployment divergences which highly favor a life to the west. Moreover, the study also indicates that whereas east-west emigration was substantial in the years following the fall of the Berlin wall it decreased (in the 1990s) and became highly centered on emigration of young and highly skilled labor. In 2004, the German statistical office reported that net income for households in the East had reached 77% of net income of households in the West. In this sense there is some convergence. The same year (2004) also saw net East-West migration dwindle to about 49.000 of which one have to assume that the majority are young income earners or other "mobile" parts of the labour force.

Who is Actually Converging Here?

Eastern Germany have, in some sense, come along way in terms of attaining the same standard of living as West Germany. That much is certain and this also shows itself in the context of intra-German migration patterns where the number of people moving from East to West seem to have fallen steadily. However, there is also a composition effect here to think about and thus the fact that one can expect the highly mobile parts of the labour force to move. Also, as the most recent pieces note, especially the small villages and mid sized towns risk effective depopulation. Finally, what is being narrated as a phenomenon exclusively confined to East Germany in the form of a lack of young mothers and young people in general is fast becoming a common German preoccupation.

Thus, Germany is ageing and fast too. Germany's median age is estimated to hit 45 years by 2010 and the process won't stop here. She will continue ageing and it will pose a great challenge moving forward.

Consequently, and while the demise of many small villages in the East and the subsequent return of the wolf packs are evidence of this, the fact of the matter is that this represents an issue for the entire Germany society to deal with even if the specific social issues in Eastern Germany are significant in their own right.

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