Pension System In Spain
Páginas: 13 (3017 palabras)
Publicado: 3 de junio de 2012
PENSION SYSTEM IN SPAIN
REASONS FOR THE LOW BIRTH RATE IN SPAIN |
It is a known fact that birth rate is going down in Spain, getting to an alarming 1.38 child per woman, which is hardly enough for the current economic system’s sustainability. Sometimes you don’t even need hard proof numbers. The fact that your parents grew with many siblings and you didn’t, and you not being the onlycase among your friends, will give you a hint on what’s going on.
The reasons are many, probably too many to list them all, so we concentrated on the factors we considered the most relevant to Spain’s low birth rate. We put them in 3 separate categories (economical, sociological and biological) for a better understanding.
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Economical reasonsHousing price
A little bit over 25 years ago, the average housing price was 326€/m². Nowadays, the average price is around 2,500€/m². In barely 25 years, the housing price has gone up almost an 800%.
It is common knowledge that this is due to overspending in the construction sector and mixing it with greedy speculation, along with mortgages that didn’t make too much sense to begin with.There are two main milestones that helped to this situation.
The first one was when Spain entered the CEE, which brought an economical boost that translated into a lot of investment in housing following a big demand now that unemployment had gone down a lot and money was flowing within the country with lots of external investments. During the period from 1985 to 1990, housing price went up300%.
After that period, a short economical recession took place, until the Euro became the common currency in Spain (and also in other countries in Europe), which would be the second milestone.
Interest rates lowering and the stability in the Euro zone (everyone having the same currency) brought a boost in confidence from investors and a credit loans giveaway, prompting a high demand ofhouses which was gladly met by the construction sector, a combination of factors that lately will end up in what experts and media have called the “housing bubble”.
Why is this relevant? Because when thinking about having a child, giving him or her a home to grow in is fundamental, and given the current situation in Spain, it is very difficult to young couples to be able to buy a house, let aloneto provide their child with a home big enough for the three of them.
Cost of raising a child
As important a home for a child is, so is the money necessary to raise him, and that is not a cheap amount. A study from CEACCU shows that raising a child costs between 9,000€ and 12,000€ per year on average, summing an average 150,000€. And that is only until they reach the age of 18, when theemancipation average age in Spain goes up to the thirties.
When having in mind that the average annual salary in Spain is around 20,000€, having a child can be a huge economical burden, and make a couple think twice before committing to have one.
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Sociological Reasons
Women in workforce
Women have been entering the labour market since the1920s, but it was mostly blue collar activities, and it was not until recently that they started to attend to college and develop high profile careers, which completely changed the social landscape.
Statistics show that when women only receive basic education, their entering the labour market only happens around 60% of the time, while when receive a high level education (college and above) over85% end up working. With more women aiming at high level education, it is only natural that more and more decide to take up on a career.
These women invest a lot of time and money getting their college degrees, MBA’s and building their profiles at their jobs and are reluctant to have a child that would most likely slow down their career development.
Also, according to the consulting company...
REASONS FOR THE LOW BIRTH RATE IN SPAIN |
It is a known fact that birth rate is going down in Spain, getting to an alarming 1.38 child per woman, which is hardly enough for the current economic system’s sustainability. Sometimes you don’t even need hard proof numbers. The fact that your parents grew with many siblings and you didn’t, and you not being the onlycase among your friends, will give you a hint on what’s going on.
The reasons are many, probably too many to list them all, so we concentrated on the factors we considered the most relevant to Spain’s low birth rate. We put them in 3 separate categories (economical, sociological and biological) for a better understanding.
-------------------------------------------------
Economical reasonsHousing price
A little bit over 25 years ago, the average housing price was 326€/m². Nowadays, the average price is around 2,500€/m². In barely 25 years, the housing price has gone up almost an 800%.
It is common knowledge that this is due to overspending in the construction sector and mixing it with greedy speculation, along with mortgages that didn’t make too much sense to begin with.There are two main milestones that helped to this situation.
The first one was when Spain entered the CEE, which brought an economical boost that translated into a lot of investment in housing following a big demand now that unemployment had gone down a lot and money was flowing within the country with lots of external investments. During the period from 1985 to 1990, housing price went up300%.
After that period, a short economical recession took place, until the Euro became the common currency in Spain (and also in other countries in Europe), which would be the second milestone.
Interest rates lowering and the stability in the Euro zone (everyone having the same currency) brought a boost in confidence from investors and a credit loans giveaway, prompting a high demand ofhouses which was gladly met by the construction sector, a combination of factors that lately will end up in what experts and media have called the “housing bubble”.
Why is this relevant? Because when thinking about having a child, giving him or her a home to grow in is fundamental, and given the current situation in Spain, it is very difficult to young couples to be able to buy a house, let aloneto provide their child with a home big enough for the three of them.
Cost of raising a child
As important a home for a child is, so is the money necessary to raise him, and that is not a cheap amount. A study from CEACCU shows that raising a child costs between 9,000€ and 12,000€ per year on average, summing an average 150,000€. And that is only until they reach the age of 18, when theemancipation average age in Spain goes up to the thirties.
When having in mind that the average annual salary in Spain is around 20,000€, having a child can be a huge economical burden, and make a couple think twice before committing to have one.
-------------------------------------------------
Sociological Reasons
Women in workforce
Women have been entering the labour market since the1920s, but it was mostly blue collar activities, and it was not until recently that they started to attend to college and develop high profile careers, which completely changed the social landscape.
Statistics show that when women only receive basic education, their entering the labour market only happens around 60% of the time, while when receive a high level education (college and above) over85% end up working. With more women aiming at high level education, it is only natural that more and more decide to take up on a career.
These women invest a lot of time and money getting their college degrees, MBA’s and building their profiles at their jobs and are reluctant to have a child that would most likely slow down their career development.
Also, according to the consulting company...
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