Cyprus Mail

Economic crisis directly affects low birth rate – study

By Evie Andreou

POPULATION in the government controlled areas decreased by an estimated 10,000 people between 2013 and 2014, while Greek Cypriots have decreased to 59.6 per cent of the total population, according to a research by the University of Nicosia.

The study on “The economic crisis and demographic challenges in Cyprus”, argues that the Cypriot society is facing a huge demographic problem, but it cannot be addressed without first ending the economic crisis and moving to recovery.

The increase of youth migration, the decreasing numbers of marriages and births, and the dramatic rise in unemployment is directly or indirectly linked to the economic crisis, said Andreas Theophanous, political economy professor and chair of the Centre for European and International Affairs of the university.

According to Theophanous, population in the government controlled areas at the end of 2013 was 858,000 inhabitants, 167,100 of which were foreign nationals.

“It is estimated that in 2014 the number of residents decreased by 10,000. Until the early 1990s the vast majority in the government controlled areas, about 95 per cent, were Greek Cypriots, but the last few years the numbers fell to around 80 per cent,” he said.

He added that the percentage of Greek Cypriots in the total population has decreased to 59.6 per cent.

Theophanous said that the decrease of marriages in recent years with a parallel increase in divorces equals to fewer births. In addition, rising unemployment leads to increased migration in search of work and better living conditions.

“The adverse economic conditions tend to push young people to prolong their studies abroad and to seek better employment conditions outside Cyprus,” he said.

Furthermore, population aging, will lead to even greater problems in the social security and pension funds in education, the National Guard and “generally in all aspects of public life,” he said.

“To effectively tackle the economic crisis and the demographic challenges, an integrated policy design is required,” Theophanous said.

He proposed a tax reform which will incorporate the low-tax-rates and high-non-compliance-penalties policy and a more efficient public administration, as well as accelerating the implementation of a health plan.

The need also exists for a new social contract and national reconciliation, he said.

“The aim is to restore confidence, strengthen social cohesion, meritocracy, solidarity and a new value system that should certainly give particular importance to the institution of the family,” Theophanous said.

He argued that it is odd that people with children are requested to pay the same income tax as those with no children, and proposed that a €2,000 tax relief is introduced per child and reduction in the age of retirement based on the number of children a couple brings to life as incentive to increase birth rates.

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