Europe's Demographic Deficit

Due to exceptionally low birth rates, the dynamism of Europe will
be lagging behind that of other regions of the world for the time
being. The paper assembles a rich body of comparative empirical
data to clarify the extent of the demographic problems for the EU
countries. It advances the view that the low birth rates in part
result from early government interventions in terms of socializing
the fruits of human capital investment via the pay-as-you-go
pension system. To mitigate the extent of socialization, it
considers a policy of freezing the contribution rates within the
existing pensions systems, forcing the childless to save and
providing an additional tax-financed "child pension" tax to
parents.