Friday, 4 April 2014

The Price of the Recession: Social Resilience and National Resilience

by Katherine Carter, Fund for Peace - Global Square Blog:

The Failed States Index (FSI) uses political, economic, and economic indicators to determine the relative stability of a nation state and its resilience to potential unrest.

The FSI examines how successfully states maintain legitimacy and cohesion in the face of internal or external pressures, but does not speak to how social trends in particular countries change in response to those pressures.

In contrast to national resilience, social resilience refers to a community’s capacity to adapt and cope with significant adversity and to prepare for future challenges.

As a ranking of states’ fragility, the indicators used in the FSI enable us to track countries’ progress from year to year, but do not easily convey the human cost of instability and how societies cope with instability on an emotional level.

When the fortunes of countries are discussed in a policy context, the real pain experienced by real people during periods of national turmoil is often overlooked.

While a nation state could emerge from a disaster or period of upheaval politically stable and essentially unchanged, how does the psyche of its population fare?

One such example of this is the social effects of the so-called “Great Recession” of 2008 and the turmoil it has caused primarily in European societies and those of other developed economies.

In analyzing these we chose to examine how individuals in particular countries reacted to the recession of 2008, in contrast to how their nation fared as a political and economic entity.

Given the subjective nature of such an analysis, allow us to begin with a necessary disclaimer: the effects of the recession will continue for several years as countries recover, and as yet we cannot substantiate any conclusions or determine how long the social trends we are witnessing now will last.

Nevertheless, the trends discussed below - suicide rates, fertility rates, divorce rates, and emigration - surfaced as the most commonly observed social effects, but we welcome comments about other social effects not mentioned here.


While we recognize suicide is a very complex issue that can never be attributed to a single factor, the correlation between the recent recession and rising suicide rates merits discussion.

Perhaps rising suicide rates during this recession speak not simply of the economic hardships people faced, but the absence of social resources and support networks available.

Moreover, it can be difficult to verify statistical accuracy because of issues associated with coroners’ reports and national data collection. Most of the statistics currently available are accurate to 2010 and other countries do not tally the numbers every year.

Across the world, countries with high youth unemployment rates are demonstrating parallel spikes in youth suicide rates.

According to the World Health Organization, suicide is the third leading cause of death for 15-44 year olds and the second leading cause of death for 10-24 year olds in many developed countries.

Suicide rates tend to be much higher among males, up to four times the rate of female suicides in some countries. Furthermore, recorded statistics do not include attempted suicides, which some estimates place at 20 times more frequent than statistics indicate.

According to the Center for Disease Control and Prevention, in 2009 suicide became the tenth leading cause of death in the U.S. Recent news articles published in New Zealand, Canada, the UK, and India demonstrate rising fears of increasing suicide rates among youth.

A 2005 Study by the New Zealand Ministry of Health found that in the 1990s,the country experienced economic decline and rocketing suicide rates, especially in males between the ages of 15-24 and those living in rural areas.

News articles have tended to focus on youth suicides, however suicide rates across the board have increased in recent years.

The U.S. Centers for Disease Control and Prevention conducted a study, “Impact of Business Cycles on U.S. Suicide Rates, 1928-2007,” in which it concluded that suicide rates correlated to the business cycle.

The highest rates of suicide were recorded during the Great Depression, and other spikes occurred during the 1970s oil crisis, and it fell during profitable periods such as during and after the Second World War and the 1990s.

That study also found the highest correlation between economic cycles and people aged between 24 and 65.

Researchers at the University of Cambridge, the University of Bristol and the University of Hong Kong found that in 2009 alone, higher unemployment rates coincided with a 3.3% rise in global suicide rates [1].

The researchers also found the recession specifically caused an increase in U.S. male suicide rates, in particular in the 45-65 year old age group. In Europe, suicide rates among men jumped significantly during the recession; in Greece, male suicide rates rose 24% between 2007 and 2009.

In Europe, however, the greatest increase in suicide rates occurred in the 15-24 year old age group, coinciding with high youth unemployment in those countries. Small business owners have been especially hard hit by the recession, a correlation demonstrated in suicide statistics.


The 2008 recession is believed to have produced a short-term but significant drop in fertility rates in developed countries.

A 2011 study conducted by the Vienna Institute of Demography at the Austrian Academy of Sciences concluded the global birthrate has been in decline since 2000, with some variation, and sharply declined between 2008 and 2011.

In general, developed nations tend to exhibit lower fertility rates than the global average. One reason cited for this difference is easier access to family planning resources, including contraception.

The study attributed decreased fertility rates during the recession to several primary factors: high levels of unemployment and job instability, trouble securing housing, and spending more time in education.

The drop in fertility rates witnessed in Europe is expected to be temporary; couples tend to postpone giving birth for more prosperous periods.

Historically, these swings last between two and five years, so it is possible a spike in fertility rates will occur in the next few years if the global economy recovers.

The 2008 recession hit young job seekers hardest, thus decreases in fertility rates were most pronounced in couples under 28 years of age.

In the European Union, 14 countries demonstrated a decline in birth rates in 2009 and overall birthrates decreased. Belgium, Bulgaria, Czech Republic, Denmark, Finland, Norway, Portugal, Romania, and Switzerland all showed a steady decline in birth rates.

German birthrates are usually one of the lowest birth rates in the EU, averaging around 8.2 births per 1,000 people over the last five years. It actually increased slightly in 2012, however, after dips in 2008 and 2009.

The United Kingdom witnessed a significant increase in birthrates between 2009 and 2010, jumping from 10.65 to 12.34 births per 1,000 people. On the other hand, Greek birthrates have been steadily declining over the past decade, falling to a low of 9.08 in 2012.

In the United States, fertility rates dropped significantly between 2008 and 2009, from 14.18 births per 1,000 people to 13.8 and have continued to fall. In 2012, the U.S. experienced its lowest fertility rate on record, sinking to 13.6.

In Australia, birthrates have been in gradual decline since the recession, following a slight rise between 2007 and 2008, to a low of 12.2 in 2012. It is certainly telling that the most dramatic fall in birthrates occurred in the youngest demographic.

Young parents appear to be the quickest to postpone baby plans when the economy recedes, perhaps as they, in general, have the luxury of more time to wait to have a family.


Changes in divorce rates as a direct consequence of the global recession have proven harder to corroborate than other social trends in this period.

Some countries have witnessed rising divorce rates, which experts attributed to increasing debts compounding already stressed marriages, while other countries have not demonstrated significant change.

In 2010, the U.K. saw a 5% increase in divorce rates. Divorce rates declined by about 7% in the U.S. between 2007 and 2009, but began to increase in 2011 as improving markets enabled couples to pay for legal costs and sell their homes.

Some experts have discussed a ‘delayed impact’ of the recession, in which couples stayed together or separated but did not divorce during the recession due to financial constraints.

Several countries in Europe reported an upturn in divorce rates during 2010; a result that could be interpreted as consistent with the ‘delayed impact’ theory.

Emigration and Immigration

Immigration rates in the European Union over the past couple of years reflected the perceived stability of particular countries. Immigration within the EU increased, as workers from countries with higher unemployment rates sought to move to more stable economies.

The U.K. reported the highest immigration rates by far, with approximately 420,000 people settling between 2011 and 2012. France and Germany held the next highest immigration rates, with about 320,000 and 166,000 respectively.

By the same token, Greece reported higher levels of emigration, with many university-educated Greeks heading elsewhere in the EU in search of work, especially newly qualified medical practitioners.

Approximately 370,000 people emigrated from Spain last year; most were immigrants from Latin America returning home, while about 50,000 were native Spaniards in search of work.

A slightly different trend emerged in the United States, where few U.S. citizens chose to emigrate during the recession, but immigration to the U.S. dropped and more immigrants chose to leave. After a peak in 2006, the U.S. immigration rate has fallen steadily.

A 2010 study conducted at the Migration Policy Institute at the University of California, Davis, demonstrated that immigrants react more quickly in times of economic recession and job loss, tending to be among the first to leave a country or state.

Between 2007 and 2009, the estimated number of unauthorized immigrants in the United States fell from 12.2 million to 11.3 million.


While the full psychological and societal effects of the global recession of 2008 have yet to fully manifest, it is clear very few of them will be positive.

Rises in suicide along with declines in global birthrates will most likely not remain at their current levels, but they illustrate how bleakly many young workers envision their futures in current conditions. Whether we will see a delayed effect in regards to divorce rates is uncertain.

Some psychologists believe couples tend to stay together more fiercely during hard times to protect whatever financial security they might have, while others think the added stress of a recession can easily push a tenuous relationship over the edge.

Recovery from increased emigration/ immigration is perhaps the most difficult social trend to predict, and possibly more permanent. The point at which workers will feel secure to return home or at which immigration rates will return to previous levels depends both on renewed economic prosperity and on perceptions of economic security.

Thus, while it appears many developed governments weathered the recession in terms of their FSI rankings and relative national security, the health and well-being of their people may not have fared so well.


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