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World View : Countdown to 2000: Countries Brace for 'Youth Deficits' : The number of 15- to 24-year-olds is likely to drop in 24 countries. That could strain labor forces, economies and social relations.

March 19, 1991

WASHINGTON — 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.

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