Some links: longevity, real estate, migrations, the future

I have been away on vacation in Venice--more on that later--but I am back now.

• Old age popped up as a topic in my feed. The Crux considered when human societies began to accumulate large numbers of aged people. Would there have been octogenarians in any Stone Age cultures, for instance? Information is Beautiful, meanwhile, shares an informative infographic analyzing the factors that go into extending one’s life expectancy.
• Growing populations in cities, and real estate markets hostile even to established residents, are a concern of mine in Toronto. They are shared globally: The Malta Independent examined some months ago how strong growth in the labour supply and tourism, along with capital inflows, have driven up property prices in Malta. Marginal Revolution noted there are conflicts between NIMBYism, between opposing development in established neighbourhoods, and supporting open immigration policies.
• Ethnic migrations also appeared. The Cape Breton Post shared a fascinating report about the history of the Jewish community of industrial Cape Breton, in Nova Scotia, while the Guardian of Charlottetown reports the reunification of a family of Syrian refugees on Prince Edward Island. In Eurasia, meanwhile, Window on Eurasia noted the growth of the Volga Tatar population of Moscow, something hidden by the high degree of assimilation of many of its members.
• Looking towards the future, Marginal Revolution’s Tyler Cowen was critical of the idea of limiting the number of children one has in a time of climate change. On a related theme, his co-blogger Alex Tabarrok highlights a new paper aiming to predict the future, one that argues that the greatest economic gains will eventually accrue to the densest populations. Established high-income regions, it warns, could lose out if they keep out migrants.

Some news links: fertility, population aging, migration, demography is not destiny, Eurabia

Over the past week, I've come across some interesting news reports about different trends in different parts of the world.

• The Independent noted that the length and severity of the Greek economic crisis means that, for many younger Greeks, the chance to have a family the size they wanted--or the chance to have a family at all--is passing. The Korea Herald, meanwhile, noted that the fertility rate in South Korea likely dipped below 1 child per woman, surely a record low for any nation-state (although some Chinese provinces, to be fair, have seen similar dips.)
• The South China Morning Post argued that Hong Kong, facing rapid population aging, should try to keep its elderly employed. Similar arguments were made over at Bloomberg with regards to the United States, although the American demographic situation is rather less dramatic than Hong Kong's.
• Canadian news source Global News noted that, thanks to international migration, the population of the Atlantic Canadian province of Nova Scotia actually experienced net growth. OBC Transeuropa, meanwhile, observed that despite growing emigration from Croatia to richer European Union member-states like Germany and Ireland, labour shortages are drawing substantial numbers of workers not only from the former Yugoslavia but from further afield.
• At Open Democracy, Oliver Haynes speaking about Brexit argued strongly against assuming simple demographic change will lead to shifts of political opinion. People still need to be convinced.
• Open Democracy's Carmen Aguilera, meanwhile, noted that far-right Spanish political party Vox is now making Eurabian arguments, suggesting that Muslim immigrants are but the vanguard of a broader Muslim invasion.

Some followups

For tonight's post, I thought I'd share a few news links revisiting old stories

• The Guardian notes that British citizens of more, or less, recent Irish ancestry are looking for Irish passports so as to retain access to the European Union in the case of Brexit. (Net migration to the United Kingdom is up and quite strong, while Cameron's crackdown on non-EU migrants has led to labour shortages.
• NPR notes one strategy to get fathers to take parental leave: Have them see other fathers take it.
• Reuters notes that the hinterland of Fukushima, depopulated by natural and nuclear disaster, seems set to have been permanently depopulated. Tohoku
• Bloomberg noted that East Asia's populations are aging rapidly, another article noting how Japan's demographic dynamics are setting a pattern for other high-income East Asian economies.
• In Malaysia, the Star notes that low population growth among Malaysian Chinese will lead to a sharp fall in the Chinese proportion in the Malaysian population by 2040.
• Coming to Alberta, CBC notes how the municipality of Fort McMurray has been hit very hard by the end of the oil boom, as has been Alberta's largest city and business centre of Calgary.
• On the subject of North Korea and China, The Guardian wrote about the stateless children born to North Korean women in China, lacking either Chinese or North Korean citizenship.
• The Inter Press Service notes that, as the Dominican Republic cracks down on Haitian migrants and people of Haitian background generally, women are in a particular situation.
• IWPR provides updates on Georgia's continuing and ongoing rate of population shrinkage, a consequence of emigration.
• On the subject of Cuba, the Inter Press Service reported on Cuban migrants to the United States stranded in Latin America, while Agence France-Presse looked at the plight of Cuba's growing cohort of elderly.

On the longevity and extended health of Icarians, among others

Via the Washington Post I came across a 2012 article in The New York Times Magazine by Dan Buettner, "The Island Where People Forget to Die". In this article, Buettner highlights the longevity and good health of the inhabitants of Icaria, a small Greek island in the Aegean Sea several dozen kilometres away from the Anatolian mainland where the average inhabitant can expect to live a decade longer than the average American. While many factors seem to contribute to the Icarians' situation--an abundance of exercise, a healthy diet, and so on--it seems that all these individual elements are reinforced by Icarian society as a whole.

In the United States, when it comes to improving health, people tend to focus on exercise and what we put into our mouths — organic foods, omega-3’s, micronutrients. We spend nearly $30 billion a year on vitamins and supplements alone. Yet in Ikaria and the other places like it, diet only partly explained higher life expectancy. Exercise — at least the way we think of it, as willful, dutiful, physical activity — played a small role at best.

Social structure might turn out to be more important. In Sardinia, a cultural attitude that celebrated the elderly kept them engaged in the community and in extended-family homes until they were in their 100s. Studies have linked early retirement among some workers in industrialized economies to reduced life expectancy. In Okinawa, there’s none of this artificial punctuation of life. Instead, the notion of ikigai — “the reason for which you wake up in the morning” — suffuses people’s entire adult lives. It gets centenarians out of bed and out of the easy chair to teach karate, or to guide the village spiritually, or to pass down traditions to children. The Nicoyans in Costa Rica use the term plan de vida to describe a lifelong sense of purpose. As Dr. Robert Butler, the first director of the National Institute on Aging, once told me, being able to define your life meaning adds to your life expectancy.

[. . .]

If you pay careful attention to the way Ikarians have lived their lives, it appears that a dozen subtly powerful, mutually enhancing and pervasive factors are at work. It’s easy to get enough rest if no one else wakes up early and the village goes dead during afternoon naptime. It helps that the cheapest, most accessible foods are also the most healthful — and that your ancestors have spent centuries developing ways to make them taste good. It’s hard to get through the day in Ikaria without walking up 20 hills. You’re not likely to ever feel the existential pain of not belonging or even the simple stress of arriving late. Your community makes sure you’ll always have something to eat, but peer pressure will get you to contribute something too. You’re going to grow a garden, because that’s what your parents did, and that’s what your neighbors are doing. You’re less likely to be a victim of crime because everyone at once is a busybody and feels as if he’s being watched. At day’s end, you’ll share a cup of the seasonal herbal tea with your neighbor because that’s what he’s serving. Several glasses of wine may follow the tea, but you’ll drink them in the company of good friends. On Sunday, you’ll attend church, and you’ll fast before Orthodox feast days. Even if you’re antisocial, you’ll never be entirely alone. Your neighbors will cajole you out of your house for the village festival to eat your portion of goat meat.

Every one of these factors can be tied to longevity. That’s what the $70 billion diet industry and $20 billion health-club industry do in their efforts to persuade us that if we eat the right food or do the right workout, we’ll be healthier, lose weight and live longer. But these strategies rarely work. Not because they’re wrong-minded: it’s a good idea for people to do any of these healthful activities. The problem is, it’s difficult to change individual behaviors when community behaviors stay the same. In the United States, you can’t go to a movie, walk through the airport or buy cough medicine without being routed through a gantlet of candy bars, salty snacks and sugar-sweetened beverages. The processed-food industry spends more than $4 billion a year tempting us to eat. How do you combat that? Discipline is a good thing, but discipline is a muscle that fatigues. Sooner or later, most people cave in to relentless temptation.

This message was emphasized by an 2013 article in The Guardian by Andrew Anthony, based at least in part on the author's interviews with Buettner.

The phrase "blue zone" was first coined by [author Dan] Buettner's colleague, the Belgian demographer Michel Poulain. "He was drawing blue circles on a map in Sardinia and then referring to the area inside the circle as the blue zone," Buettner says. "When we started working together, I extended it to Okinawa, Costa Rica and Ikaria. If you Google it now, it's entered the lexicon as a demographically confirmed geographical area where people live measurably longer." So what does it take to qualify? "It's a variation," Buettner says. "It's either the highest centenarian rate, so the most centenarians per 1,000. Or it has the highest life expectancy at middle age."

All the blue zones are slightly austere environments where life has traditionally required hard work. But they also tend to be very social, and none more so than Ikaria. At the heart of the island's social scene is a series of 24-hour festivals, known as paniyiri, which all age groups attend. They last right through the night and the centrepieces are mass dances in which everyone – teenagers, parents, the elderly, young children – takes part. Kostas Sponsas tells me he no longer has the energy to go on until dawn. He will now usually take his leave by 2am.

One evening, the island's star violin player, whom we met at Gregoris Tsahas's favourite cafe, invites Buettner, me and several others back to his house to hear him play. He says he often grows exhausted while performing at festivals, but the energy and enthusiasm of the people keep him going. He plays some traditional folk tunes, full of passion and yearning and heart-rending beauty, and mentions with pride that Mikis Theodorakis, the composer of Zorba The Greek, was among the leftists exiled on the island in the late 1940s. Theodorakis later recalled the experience with pleasure. "How could this be?" he asked. "The answer is simple: it's the beauty of the island in combination with the warmth of the locals. They risked their lives to be generous to us, something that helped us more than anything bear the burden of the hardship."

One of the things Buettner has found that unites the elderly inhabitants of all the blue zones is that they are unintentionally old: they didn't set out to extend their lives. "Longevity happened to these people," he says. "The centenarians didn't all of a sudden at 40 say, 'I'm going to become 100; I'm going to start getting exercise and eating these ingredients.' It ensues from their surroundings. So my argument is that the environmental components of places such as Ikaria are portable if you pay attention. And the value proposition in the real world is maybe a decade more life expectancy. It's not living to 100. But I think the real benefit is that the same things that yield this healthy longevity also yield happiness."

I ask a number of men in their 90s and 100s if they do any keep-fit exercise. The answer is always the same: "Yes, digging the earth." Nikos Fountoulis, for example, is a 93-year-old who looks 20 years younger. He still has a smallholding in the hills of the island's interior. Each morning he goes out at 8am to feed his animals and tend his garden. He used to dig charcoal as a younger man. "I never thought about getting old," he says. "I feel good. I feel 93, but on Ikaria that's OK."

Long-time readers of Demography Matters may remember that I visited the phenomenon of extended life expectancy and relatively gentle aging before, in a February 2010 post taking a look at the position and numbers of the aged in Abkhazia. Fantastic claims that Abkhazians regularly lived past the century mark have been debunked. Conversely, traditional Abkhazian culture does seem to have not only promoted good health, but helped integrate aging Abkhaz into their society in a way that allowed them to continue to be productive. (I know nothing about the current situation in Abkhazia. Anyone informed on this subject, please advise in the comments.)

Is it possible to learn from the lessons of Icarians and similar populations? Maybe. As commented in the articles I linked to above, Icarians' longevity appears to be the product of a complex mesh of social factors that can't be easily replicated. Whether the relaxed lifestyle of Icarians and others can be replicated in our contemporary world is very open to question, for instance. If nothing else, the Icarian experience does provide fascinating hints towards a possible futuree.

The Shortgage of Bulgarians Inside Bulgaria

Oh, there's a hole in my bucket, dear Liza, a hole......

Wenn der Beltz em Loch hat -
stop es zu meine liebe Liese
Womit soll ich es zustopfen -
mit Stroh, meine liebe Liese

According to Angela Merkel, speaking in the German city of Mainz in mid February,  European countries struggling with the fallout of the euro-area debt crisis have much to learn from East Germany’s experience with economic overhaul following the fall of the Berlin Wall. In the main she was speaking about the need for reform, something on which we can all agree. “At the beginning of the 21st century", she said, "Germany was the sick man of Europe and that we are where we are today also has to do with reforms we carried out in the past. That’s why we can say in Europe that change can lead to good.”

But there was one tiny little detail she forgot to mention. During the post unification period East Germany's population went into melt-down mode. New York Times Columnist Nicholas Kulish put it like this:

Unemployment in the former East Germany remains double what it is in the west, and in some regions the number of women between the ages of 20 and 30 has dropped by more than 30 percent. In all, roughly 1.7 million people have left the former East Germany since the fall of the Berlin Wall, around 12 percent of the population, a continuing process even in the few years before the economic crisis began to bite.

And the population decline is about to get much worse, as a result of a demographic time bomb known by the innocuous-sounding name “the kink,” which followed the end of Communism. The birth rate collapsed in the former East Germany in those early, uncertain years so completely that the drop is comparable only to times of war, according to Reiner Klingholz, director of the Berlin Institute for Population and Development. “For a number of years East Germans just stopped having children,” Dr. Klingholz said.

The newspaper Frankfurter Allgemeine Zeitung reported recently that although 14,000 young people would earn their high school diplomas this year in Saxony, only 7,500 would do so next year. Since 1989, about 2,000 schools have closed across the former East Germany because of a scarcity of children.

Now this situation is quite serious, and needs a long term solution, but it is not as serious as what is currently happening to Latvia, or Bulgaria, or a number of the other former communist states. Unless, of course, the lesson Angela would like to draw our attention to is that East Germany managed to salvage something from what would otherwise be population wreckage by sneaking in under the shelter of another state, with a centralized system of support for pensions and health care. Somehow I doubt it, but perhaps this is what we need to think more about. The EU needs a pan European health and pension system, to distribute the burden equitably. This is the conclusion I reached during my last visit to Riga. It isn't just a Euro related issue, it is to do with having a unified labour market, with people able to move to where the jobs exist, and the pay is better. For years people complained about the absence of labour mobility in the EU. Now we have it, the flaw in the institutional infrastructure is obvious.

Young people are moving from the weak economies on the periphery to the comparatively stronger ones in the core, or out of an ever older EU altogether. This has the simple consequence that the deficit issues in the core are reduced, while those on the periphery only get worse as health and pension systems become ever less affordable. Meanwhile, more and more young people follow the lead of Gerard Depardieu and look for somewhere where there isn't such a high fiscal burden, preferably where the elderly dependency ratio isn't shooting up so fast.

I am sufficiently concerned about this issue, which I think ultimately endangers possibilities of economic recovery all along the periphery, to have created a dedicated facebook page, campaigning for one single issue - that the EU Commission and the IMF give a greater priority to trying to measure these flows, and understand their consequences. I am simply asking that they pressure EU member states to improve their statistics gathering, treat the issue as a priority, and identify an indicator to incorporate in the Macroeconomic Imbalance Procedure (MIP) Scoreboard. Really it doesn't matter whether you are in favour of austerity, or against it, feel more Keynesian than Austrian, or vice verse, all I am asking for is that this problem be taken more seriously, measured and studied.

Bulgaria The Classic Case?

Really there has been a before and after to the financial crisis, at least insofar as awareness of the demographic dimension is concerned. Really, before the onset of the crisis very few people really attached much importance to the question. Since the arrival of the European sovereign debt crisis, and the fiscal cliff debate in the United States, awareness has grown that population ageing probably will slow economic growth, and that previous expectations about levels of pension and health care provision may have been way too optimistic. The latest example of this has been Nobel Laureate Paul's Krugman's comments on how Japan's demographics may be influencing its growth rate. In a tellingly graphic expression he explains that the root of Japan's ailment might be that the country is suffering from a growing "shortage of Japanese".

Once you realise that population shortage may be a problem in Japan, you start  wondering where else it might be one. And then, once you begin to look you start seeing the issue springing up like mushrooms all over the place. In Bulgaria for example.

According to the 2011 census, Bulgaria has lost no less than 582,000 people over the last ten years. In a country of 7.3 million inhabitants this is a big deal. Further, it has lost a total of 1.5 million of its population since 1985, a record in depopulation not just for the EU, but also by global standards. The country, which had a population of almost nine million in 1985, now has almost the same number of inhabitants as in 1945 after World war II. And, of course, the decline continues.

As well as shrinking the population is ageing. In 2001 16.8% of the population were over 65. Just 10 years later the equivalent figure had risen  to 18.9%. Naturally this means the median population age is rising steadily. It is precisely part of my argument that this surge in median age over 40 has important consequences for saving and borrowing patterns at the aggregate level, patterns which have not yet been adequately measured and identified. Thus the macroeconomic dynamics of a country change. The impact of these changes has not yet been incorporated into the traditional models most analysts use in forecasting.

 Naturally the workforce itself is in rapid decline.

The causes of Bulgaria's rapid ageing and shrinking population problem are twofold, low fertility and emigration. This is what makes the country look more like the old DDR and less like Japan. In fact Bulgaria's situation is an extreme case of what is happening in many East European countries, especially Romania and the Baltics. If you want another reference point, Ukraine would be in this group, but even worse, since it is even outside the EU. 

Details of migrant numbers are scarce, and at best hedgy. The data we have is surely a significant underestimate, as the OECD pointed out in its latest country migration report:

Figures on declared emigration show an increase from 19 000 in 2009 to 27 700 in 2010. However, actual outflows are considered to be much greater, based on immigration statistics of th e main destination countries. Spain, the most important destination country in recent years, recorded 10 400 Bulgarians entering in 2010, 7% more than in 2009. Outflows of Bulgarian citizens from Spain also increased in 2010, to 7 600 from almost 5 000 in the previous year (+52%). The number of Bulgarians in Spain increased by 14 500 in 2010, and a further 13 000 in 2011. There are no consistent data for Greece, the second main destination of Bulgarian immigrants in recent years, but it seems that the stock increased less in 2010 than in previous years. 

Remittances data gathered by the World Bank give the general picture. Basically there was a large surge following the severe crisis of the late 1990s, and since that time the level of payments has only weakened slightly, on the back of the severity of the crisis in the main destination countries.

Bulgaria is also pretty much what the old DDR would look like if it hadn't fused with Western Germany, namely it much more similar to Hungary than it is to Japan (in the sense I discussed in this post) as it has a significant negative balance on the net international investment position (though not as large as Hungary's), which means as well as being quite poor it is totally unprepared for rapid population ageing (since the text book way to sustain pension and health benefits in a context of increasingly weaker headling GDP growth is normally thought to be to draw down on overseas assets).

Bulgaria  also bears comparison with Hungary for the way it has carried out a rapid correction on its external position. This is due largely to remittances and services exports, since the goods balance is still in deficit. But still, the turnround is impressive.

As elsewhere exports have performed very strongly.

But again to no real avail, since domestic demand is deflating so strongly that the economy struggles to find air...... and growth. In this sense it is hard to agree with the IMF Executive Directors when they state in their latest Public Information Notice, following conclusion of the Fund's 2012 Article IV consultation,  they "broadly agreed that the currency board arrangement has served Bulgaria well". If allowing a country to drift towards long term melt-down is doing well, I would hate to see what something which they thought was an impediment would do! Some thing is rotten in the state of Denmark, and that something isn't being identified or dealt with.

Naturally part of the problem is that the flow of credit has dried up.

But the other part is surely the one Krugman identified in Japan, the growing shortage of Japanese (sorry, Bulgarians). It is hard to see how you can get serious retail sales growth in a population that is shrinking so rapidly. The end result is that the economy grew steadily into the global crisis, and subsequently has stagnated. This stagnation isn't simply conjunctural anymore, it has become structural, as the decline in domestic demand associated with ongoing deleveraging and population ageing and shrinkage precisely offsets the positive impact of all that export growth.

Not everyone is convinced, of course. The IMF expect the Bulgarian economy to return to a rate of growth of between 3% and 4% after 2014, but looking at the demographics and comparing it with what we are seeing elsewhere that seems pretty unrealistic. What is the expression Christine Lagarde would use? "Wishful thinking" perhaps?

In any event, in the short term the country looks set to significantly underperform any such rosy expectations. FocusEconomics Consensus Forecast panellists expect the economy to expand 1.4% this year. In 2014, the panel expects economic growth to reach the impressive rate of 2.4%.

Growing Political Discontent

 Since Bulgaria is a small country, and a poor one to boot, most of the above had been going on virtually unnoticed by the rest of the world. Then last week the Bulgarian government suddenly resigned en bloc. The immediate cause of the crisis which lead to the resignation was  the continuing rise in energy costs, a rise which was largely blamed on the Czech provider CEZ. To appease the street protestors the government has now initiated a procedure to revoke the company's licence, a move which has started to raise concerns about institutional protection in the country.

According to the report in Bloomberg:

Bulgaria’s State Financial Inspection Agency started a probe into CEZ’s Bulgarian units last year and submitted a report on Feb. 8, saying that CEZ ‘‘evaded requirements of the Law for Public Tenders,” the Energy and Economy Ministry in Sofia said on Feb. 18. The ministry asked the authority to conduct a similar investigation into the local units of Austria’s EVN AG and Prague-based Energo-Pro, it said. Bulgaria sold seven power distributors in 2005 to EON SE, CEZ and EVN before joining the European Union. EON sold its Bulgarian companies to Energo-Pro in 2011.

Czech Prime Minister Petr Necas was not slow to respond:

“I regard the statements by Bulgarian officials about CEZ and other foreign companies as very non-standard and see the whole issue as highly politicized because of the approaching parliamentary elections,” Necas said. “I expect Bulgaria, as a member of the European Union, to stick to its international obligations, European law and its own laws on protection of foreign investments.”

Naturally energy prices are not the only issue. The population is tiring of austerity, and living standards that don't rise even as unemployment does.

One symptom of this is that Bulgaria's government sacked Finance Minister Simeon Djankov at the start of last week. Djankov was closely identified with austerity policies, and it isn't hard to read his departure as an attempt to curry favour with voters in elections which are due this summer.

Having said that, the country's government debt at under 14% of GDP is incredibly low, so there is room for flexibility, if it wasn't populist flexibility. The real issue is that simply spending more this year, or next, won't fix the underlying problem, and that problem is unlikely to be addressed until it is recognized as a problem by the institutions responsible for economic policy formulation. As someone once said, de-nile is not only a river in Egypt.

This post first appeared on my Roubini Global Economonitor Blog "Don't Shoot The Messenger".

Postcript

 According to wikipedia: "There's a Hole in My Bucket" (or "...in the Bucket") is a children's song, along the same lines as "Found a Peanut". The song is based on a dialogue about a leaky bucket between two characters, called Henry and Liza. The song describes a deadlock situation: Henry has got a leaky bucket, and Liza tells him to repair it. But to fix the leaky bucket, he needs straw. To cut the straw, he needs a knife. To sharpen the knife, he needs to wet the sharpening stone. To wet the stone, he needs water. However, when Henry asks how to get the water, Liza's answer is "in a bucket". It is implied that only one bucket is available — the leaky one, which, if it could carry water, would not need repairing in the first place.


The origin of this song seems to go back, oddly enough, to the German collection of songs known as the Bergliederbüchlein. Ironically Henry's Q&A with Liza fits the quandry facing the countries on Europe's periphery and their lack of constructive dialogue with their core peers about the roots of their problems to a tee.

A few population-related news links

This evening, I thought I'd share a few interesting population-related news links I've collected in the past couple of weeks.

* The Discover Magazine blog 80 Beats summarized a recent study of young game-playing children in Beijing suggesting that these children are less trusting and more risk-averse than one might expect.

* On a perhaps-related note, an article in the latest issue of The National Interest by John Lee examines at length the consequences of China's rapid aging on its economic model, among other things.

* An article in The Guardian contrasting a relatively prosperous Chinese northeast with a stagnant Russian Far East makes the point that Russia need not fear millions of Chinese crossing their country's northern frontier. What incentives would there be for them to leave?

* The Taipei Times covered a recent statement by the head of the South Korean central bank calling for more immigration to ameliorate the effects of population aging.

* An Inter Press Service article notes that rising life expectancy for Japanese women is, unfortunately, being accompanied by falling incomes.

* The Population Reference Bureau's Behind the Numbers blog notes that birth rates have continued to decline throughout India.

* In Canada, a recent article in The Globe and Mail notes that there's an east-to-west income gradient for immigrants in Canada, immigrants in Québec enjoying substantially lower wages than their counterparts in Ontario who in turn earn less than their counterparts in western Canada.

* In the Atlantic Canadian province of Nova Scotia, meanwhile, the provincial government is trying to boost its attractiveness to immigrants in the face of declining immigrant numbers and a local population tending to decrease.

* In Europe, the Portuguese-American Journal notes that statistics indicate that more than one million Portuguese have left the country in the past fourteen years. This sort of emigration, which if anything seems to be accelerating, has obvious consequences.

* In the nearby Spanish region of Galicia, the Swiss Broadcasting Corporation's Swissinfo takes a look, in the article "From Galicia to the Jura", at one community in Galicia that has been marked by emigration to Switzerland as a natural life stage for a half-century. (Likewise, emigration isn't slowing down.)

* A New York Times article profiles the Chinese of Barcelona, who have apparently so far resisted the effects of the Eurozone recession well.

On the aging of the Canadian population

The big news today from Statistics Canada is that Canadian population ageing continues.  

The number of seniors aged 65 and over increased 14.1% between 2006 and 2011. This rate of growth was more than double the 5.9% increase for the Canadian population as a whole. It was also higher than the rate of growth of children aged 14 and under (+0.5%) and people aged 15 to 64 (+5.7%).

As a result, the number of seniors has continued to converge with the number of children in Canada between 2006 and 2011. The census counted 5,607,345 children aged 14 and under, compared with 4,945,060 seniors. In the working-age population, the census counted 22,924,300 people.

The main factors behind the aging of Canada's population are the nation's below-replacement-level fertility rate over the last 40 years and an increasing life expectancy. Canada's working-age population is also growing older.

Within the working-age group, 42.4% of people were aged between 45 and 64, a record high proportion. This was well above the proportion of 28.6% in 1991, when the first baby boomers reached age 45.

[. . .]

In 2001, for every person aged 55 to 64, there were 1.40 people in the age group 15 to 24. By 2011, this ratio had fallen slightly below 1 (0.99) for the first time. This means that for each person leaving the working-age group in 2011, there was about one person entering it.

A second report highlights the regional divides in Canada, with relatively more rapid aging in Atlantic Canada and Québec than the Canadian average, while Alberta and British Columbia (largely owing to substantial migration, both from the rest of Canada and internationally) and the territories (largely owing to high birth rates) have resisted this tendency somewhat. Rural Canada, too, taken as a bloc, is experiencing faster aging than urban Canadian centers.

"Tunisia’s Shot at Democracy: What Demographics and Recent History Tell Us"

Behind the Numbers pointed to a post by Richard Cincotta taking a look at the Tunisian revolution from a demographic perspective: do the demographics look to be helpful? Short answer: hopefully yes.

How long could it take Tunisia to move from Freedom House’s “not free” category (7.0 to 5.5) to “free” (2.5 to 1.0)? South Korea ascended in five years (1983-88). For Indonesia, the same journey took eight years (1997-2005), and for Taiwan, it took over 15 years to inch through the partly free category to free (1980 to 1995). Recent European ascents were somewhat quicker: Poland took four years (1987-91); Romania, six (1990-96); Portugal, three (1973-76); and Spain, four (1973-77). Greece jumped from not free to free in only one year (1973-74), following the collapse of a repressive anti-communist military regime.

To understand how age structure can directly influence a state’s chances of attaining and maintaining liberal democracy requires a discussion of two models of sociopolitical behavior: (1) the Hobbesian bargain and (2) the youth bulge thesis. Assuming, as the English political philosopher Thomas Hobbes did in the middle of the 17th century, that citizens are willing to relinquish political liberties when faced with threats to their security and property (the Hobbesian bargain), it is not surprising that support for authoritarian regimes – especially among commercial and military elites – appears high when societies are very youthful and prone to political violence (the youth bulge thesis). When fertility declines, the population’s bulge of young adults ultimately dissipates over time. With much of society’s political volatility depleted, authoritarian executives tend to lose the support of the commercial elite, who find the regime’s grip on communication and commerce economically stifling and the privileges granted to family members and cronies of the political elite financially debilitating.

[. . .]

What does this mean for Tunisia? First, the good news: Despite journalists’ focus on youth in the streets, Tunisia is not a youth-bulge country. Its population’s median age is 29 years – exceedingly more mature than the populations of most states in the Arab Middle East, such as Yemen (median age of 18 years), the Palestinian Territories (18 years), Iraq (19), Syria (23), and Jordan (23). Tunisia’s consistent declines in fertility pushed it into the class of intermediate age structures in 2005.

Intermediate age structures (also known as “early worker-bulge” populations) are distinguished by having a median age between 25 and 35 years. In its most recent report, Freedom House assesses about half of these states – which include Brazil, Colombia, Indonesia, and Turkey – as free or partly free. According to the UN Population Division’s database, several countries in the Arab Gulf region – Kuwait (partly free), Qatar, and Bahrain (not free) – also have age structures that fit into this “intermediate” classification. But this is misleading; the Gulf states’ median ages are inflated by the presence of large numbers of temporary labor migrants in the prime working ages. Tunisia and Lebanon share the distinction of having the eldest native populations in the Arab world. Better yet, Tunisia does not suffer Lebanon’s difficulties with internal (Hezbollah) and external (Syria, Israel, and Iran) actors.

[. . .]

Now for the bad news: Tunisia’s ascent to liberal democracy is still uncertain. In the annals of history, nearly all of the youth-led revolts aimed at achieving liberal democracy have fallen far short of their mark. Instead, they tend to descend into infighting and typically produce a partial-democratic or autocratic regime capable of quelling violence and limiting the destruction of property. This tendency lays bare the most serious limitation of an age-structural theory of democratization: ultimately, personalities and political action – non-demographic factors – are needed to consolidate elite and popular support for a liberal democratic regime. To eventually attain liberal democracy, Tunisia’s political elite, or what remains of them after years of expulsion and political exclusion under the Ben Ali regime, must seize the democratic initiative from demonstrators and make it their own.

Commenter Jack Goldstone does take issue with Cincotta's analysis on the grounds it's not fine-grained enough.

Richard's insights into Tunisia's prospects for democracy are terrific and I agree with him. However, in regard to the causes of the rebellion,I have to disagree with him in one respect - Tunisia in 2010 is VERY MUCH a YOUTH BULGE country, at least as far as political theory would see it. As Henrik Urdal has shown, youth bulge should NOT be measured as the size of the youth cohort (15-24) against the entire population, but as the fraction of youth in the adult population, those aged 15 and older. The 0-14 group is politically not relevant, and should not be counted in assessing the impact of youth cohorts on the total population's political mobilization potential.

For Tunisia, median age may in fact be misleading (as I didn't realize until I looked at the age pyramids that Richard has posted above). Because birth rates fell very very rapidly after 1995, median age in 2010 is intermediate; but if you look only at the population aged 15 and up, you still see very large cohorts of youth compared to total adults.

Because Tunisia's birth rate only started falling sharply after 1995, the large cohorts born in 1986-1995, now age 15-24, still make up a VERY large portion (33%) of all adults. While the next cohorts are much smaller, so this 'youth bulge' will soon fade, it is still very much present, as Richard's graphs show.

Go, read the article and comments.

Does the dependency ratio mean all that much now?

The old age dependency ratio--the proportion of people over 65 to people of working age (15 to 64 years of age) is the standard metric for measuring a population's aging, and by extension, the degree to which an aging country's economy will have to somehow cope with the rapid growth of pension expenditures, the contraction of the workforce, et cetera. Now, a new study out of Vienna's IIASA makes an argument that with improving health for older people, the dependency ratio doesn't make that much sense.

Those measures are based on fixed chronological ages, and this can generate misleading results,” says Dr. Warren Sanderson, from IIASA and SBU. “When using indicators that assume fixed chronological ages, it’s assumed that there will be no progress in factors such as remaining life expectancies and in disability rates. But many age-specific characteristics have not remained fixed and are not expected to remain constant in the future.”

However, many people over 65 are not in need of the care of others, and, on the contrary, may be caregivers themselves. The authors provide a new dependency measure based on disabilities that reflect the relationship between those who need care and those who are capable of providing care, it is called the adult disability dependency ratio (ADDR). The paper shows that when aging is measured based on the ratio of those who need care to those who can give care, the speed of aging is reduced by four-fifths compared to the conventional old-age dependency ratio.


Dependency ratios. Authors’ calculation. OADR and POADR are based on UN, World Population Prospects: The 2008 revision (WPP). ADDR are based on both UN WPP and European Health Expectancy Monitoring Unit Survey Data (see references in article). The lower age boundary in all denominations is 20.

Co-author Dr.Sergei Scherbov, from IIASA and the VID, states that “if we apply new measures of aging that take into account increasing life-spans and declining disability rates, then many populations are aging slower compared to what is predicted using conventional measures based purely on chronological age.”

The new work looks at “disability-free life expectancies,” which describe how many years of life are spent in good health. It also explores the traditional measure of old age dependency, and another measure that looks specifically at the ratio of disabilities in adults over the age of 20 in a population. Their calculations show that in the United Kingdom, for example, while the old age dependency ratio is increasing, the disability ratio is remaining constant. What that means, according to the authors, is that, “although the British population is getting older, it is also likely to be getting healthier, and these two effects offset one another.”

The new ratio that Sanderson and Scherbov introduce, of the ratio of disabilities in adults over the age of 20 in a population, does seem to make more sense in certain contexts notwithstanding a degree of subjectivity (what will different statistical agencies define as "disabilities"). The press release quotes the authors as suggesting that, if population aging is much less catastrophic a phenomenon that previously presented--this AFP article reports the authors suggest that "[w]hen aging is measured based on a ratio of those who need care to those who can deliver care, the speed of aging is reduced by four-fifths compared to the conventional old-age dependency ratio"--gradualist reforms of pension and retirement aging, potentially more manageable than sharp hikes, could become possible. Certainly if this ratio did become the new metric social and economic systems would urgently need revision to match.

On population aging and Newfoundland's blood supplies

The aging of populations has any number of consequences in any number of countries for any number of reasons. One consequence that I hadn't imagined at all was a falling number of potential blood donors in Newfoundland and Labrador.

Statistics Canada's latest demographic projection singled out Newfoundland and Labrador as the province with the fastest aging population.

As well, under a low-growth scenario, Newfoundland and Labrador is the only province that could see its population decline over the next 25 years.

"As this demographic shift happens, it will have a two-fold effect on our blood supply," said Sharon Bala, a communications official with the Canadian Blood Services in St. John's.

"First, we'll need more blood and then second, there'll be fewer donors available to donate, so that's why it's really important for us to engage younger people to pick up the torch."

In 2009, the median age of blood donors in Newfoundland was 41, meaning that half of the people who gave blood were older than that.

Bala said Canadian Blood Services has launched a new campaign targeting teens. She said organizers want to recruit donors at a younger age and to foster donation habits that will last for years.

In Canada, as in many other countries, blood is frequently in short supply. Part of this is because (circa 2008)a third of committed donors did not showing up, but as one source notes the demographics of blood donors are become less and less favourable.

Currently, despite the fact that almost everyone will need to use donor blood at some point in their life, less than 4% of eligible donors give blood.

By examining the records from the Canadian Blood Services, several patterns were observed. Firstly, the 15-24 age group showed the strongest likelihood to be donors, whilst those of working age (25-54) were the least likely to be donors. The authors predict that due to an ageing population this reliance on the younger generation will be unsustainable.

The study also showed positive ties between level of education and ability to speak English with donation likelihood, whilst immigrants and the wealthy were less likely to donate. The paper shows that those living in a big city were much less likely to donate blood than those living in smaller cities or towns, coining the phrase "the stingy big-city effect". According to Páez, "The fact that those who possessed a higher level of education were more likely to donate lends weight to the assertion that, with 25% of Canadians thinking there are some risks in donating blood, educating the public would help expand the donor database".

This last may be a consequence of fears dating back to the early and mid-1980s, when many people believed that they could become infected with HIV not only by receiving blood products but by donating blood. Older people with more commitments just find it difficult to set aside the time necessary.

Saberton et al's very extensive and highly recommended study suggests that, in Canada the proportion of blood donors as such doesn't very much by region, with (as noted above) fluency in English and residency in small towns playing more of a role. Newfoundland's very badly off in this regard, with underserviced rural areas and a most unfavourable age pyramid, with low completed fertility compounded by mass emigration of the young and working-age population.

What goes for Newfoundland probably also goes for other countries facing similar demographic issues. Where will the blood needed for surgeries come from in the future? Perhaps the blood could be manufactured. (But how?) Perhaps the blood could be imported. (But the memory of the tainted blood scandals common to most of the developed world will surely prevent this.) It's the sort of conundrum that doesn't seem to have been considered, honestly. Maybe it should.

A few more news links

For your reading pleasure, here's some population-related news links that I thought might interest you.

Radio Free Europe/Radio Liberty's Nikola Krastev observes that even though populations are aging, fiscal issues and social isolation is making the lives of the elderly difficult.

Turkey's Today Zaman observes that Turkey's population is aging swiftly, its elderly population growing more quickly than its youth population.

Ha'aretz' Lily Galili notes that ex-Soviet Jews, by virtue of their removal to the very different environment of Israel, have enjoyed a much greater lifespan than they otherwise would have and are being assimilated to Israeli norms.

The CBC comments that Nova Scotia's rapidly aging has led to serious and growing economic problems in a depopulating rural Nova Scotia.

Billboards in Atlanta claiming that relatively high abortion rates among African-American women is threatening the survival of that community are as controversial as you'd expect.

Kenya's Daily Nation reports that remittances to Kenya, about half from North America and one-quarter from Europe, reached $609 million dollars in 2009.

French Pearce in the Guardian suggests that the sharp decline in Bangladeshi fertility rates can be explained by a combination of a Green Revolution that reduced the need for labour on farms and the economic empowerment of women.

Some speculations on the effects of significantly extended lifespans

((I know that this post is speculative, almost absurdly so. Bear with me.)

The idea of radically extending human life expectancy has been surfacing more and more in the media over the past few years. Back in October, I made a brief note about recent projections by demographers that, taking ongoing improvements in medicine into account, most of the children now being born in developed countries may become centenarians. The ongoing increase in human life expectancy is one of the biggest if quietest ongoing revolutions in the world, as medicine is slowly making any number of human ailments, from cancer to HIV/AIDS to the slow degeneration of the human form, treatable illnesses, while other non-medical ways of increasing the human lifespan (through caloric restriction, as an example) also show promise. In the Greek myth of Tithonus, that Trojan prince's lover Eos asked Zeus on his behalf that he be given the gift of immortality, which Tithonus did receive, but forgot to ask for eternal youth as well. It looks very much like the coming generation of human beings will not only enjoy longer lifespans but healthier lifespans as well.

Demographics come into play here via Ira Rososfky at his Psychology Today blog, where he recently posed an interesting question: "[W]hat if science advanced to the point where life expectancy took a quantum leap or we became immortal? How would we cope with all those 200 and 300-year-old people?" In an earlier post, Rosofsky wondered whether a doubling of human life expectancy would make people self-protective to the point of paranoia. If humans gained relatively immunity from the aging process but not from "accidental illness or infectious diseases," Rosofsky wondered, might humans try to avoid taking any risks at all?

Would individuals avoid contact with others for fear of illness? Would we all remove ourselves to reclusive existences living in the equivalent of a nursing home with padded walls and floors and grab bars so we could never fall and hit our heads?

Would agoraphobia become a fact of life along with paranoia and hypochondria?

I mean, if you know your life is going to be a brief candle of only seventy or eighty years, you might say: "Heck, life is short, so what difference does it make if I take some chances?"

I know you could argue that a short life should actually make us more self-protective, but consider how you would feel knowing that if you died accidentally at seventy you could be missing out on more than one-hundred years of additional life? That's where madness and paranoia might lie.

I'd argue that such paranoia isn't very different from what people experience today. Regardless, if the numbers of the (perhaps healthily and normally) superaged steadily grew, what would happen to the age pyramid, to economies, to the environment? One scientist, Leonid Gavrilov, has argued that limits to life expectancy are probabilistic rather than deterministic, and that despite lengthened lifespans populations need not rise substantially.

Psychological consequences aside, Leonid Gavrilov, in "Demographic consequences of defeating aging," (presented at the Strategies for Engineered Negligible Senescence Conference, Queens' College, Cambridge, England, September, 2009) asks: "Is it possible to have a sustainable population dynamics in a future hypothetical non-aging society?"

In computer simulations, Gavrilov concluded that "population changes are surprisingly slow in their response to a dramatic life extension. For example, we applied the cohort-component method of population projections to 2005 Swedish population for several scenarios of life extension and a fertility schedule observed in 2005. Even for very long 50-year projection horizon, with the most radical life extension scenario (assuming no aging at all after age 50), the total population increases by 35 percent only (from 9.1 to 13.3 million)."

Paradoxically, the population might even decline "if some members of the society reject to use new anti-aging technologies for some religious or any other reasons (inconvenience, non-compliance, fear of side effects, costs, etc.)."

Immortal parents, if they had only one child per couple, would double the population over time. The population would not grow infinitely.

"In other words, a population of immortal reproducing organisms can grow indefinitely in time, but not necessarily indefinitely in size, because asymptotic growth is possible," Gavrilov said in an interview with Rejuvenation Research (Volume 12, Number 5, 2009).

"The startling conclusion is that fears of overpopulation based on lay common sense and uneducated intuition are, in fact, grossly exaggerated."

He adds: "In brief, we found that defeating aging, the joy of parenting, and sustainable population size are not mutually exclusive. This is an important point, because it can change the current public perception that life extension necessarily leads to overpopulation."

Much depends on the nature of fertility in this brave new world. If it's possible for people to become parents for a longer period of time--if reproductive organs retain their potency for longer, or if some technological combination like cloning and artificial wombs comes about--then their might be a longer window of fertility. Given the current tendency for fertility to be postponed, this might well allow replacement fertility to be reached even in societies marked by lowest-low fertility.

One thing's for certain: if human lifespans are significantly extended, especially but not only if working lifespans are extended, the pensions systems currently existing will be almost absurdly unaffordable. If people could continue to retire in a particular country at (say) 65, while lifespans amounted to (say) 120 years and people would be sufficiently healthy to work to 100, barring unimaginably huge increases in productivity pensions specifically and social security systems generally would need to be massively revised.

Thoughts? As I said at the beginning, this is an absurdly speculative post, but I'd be interested to see what you'd think of the situation. Don't worry: there's going to be a purely non-speculative post on this subject tomorrow.

On aging and education

Agence France-Presse recently published an article examining one of the less-examined consequences of Taiwan's very low birth rate.

More than one in three Taiwanese colleges are likely to be forced to close by 2021 due to a shortage of students as the island's birth rates continue to fall, local media said Tuesday.

Currently, around 300,000 school leavers are eligible to apply for college each year but the number is expected to drop to 195,000 in 2021, the Liberty Times said, citing the education ministry.

In 12 years, more than one-third of the island's 164 colleges are expected to have closed because they can not enroll enough students, forcing about 1,000 professors to lose their jobs, the report said.

Educational officials are not immediately available to confirm the report.

Taiwan's birth rates have been on a steady decline in recent years, and last year there were less than nine newborn babies for every 1,000 women of reproductive age, according to the interior ministry.

Education minister Wu Ching-ji was quoted by the paper as saying the ministry was considering measures for colleges to merge or become private for-profit learning institutes.

The Taipei Times goes into more detail.

Colleges and universities in Taiwan will see their lowest enrollment and highest vacancies when the new school semester begins next month, the latest enrollment statistics released by the Joint Board of the College Recruitment Commission showed.

A total of 76,434 students enrolled in Taiwanese universities, resulting in a record high of 6,802 vacancies on campuses and a ­record-high college admission rate of 97.14 percent, commission statistics showed. That was up from 4,788 vacancies and a college admission rate of 97.1 percent for last school year, it said.

Both admission rates and vacancies at higher learning institutions have been steadily rising in recent years.

Taiwan’s falling birth rate and the rapid increase in the number of colleges and universities that have opened in Taiwan in the past 15 years are the main reasons behind this trend.

In 1986, there were 28 four-year colleges and universities across Taiwan, but the number rose to 147 last year — the result of a government policy to make it easier for high school students to get into university.

[. . .]

Ho Cho-fei (何卓飛), director of the ministry’s Department of Higher Education, asked low-enrollment colleges and universities to remain committed to giving their students sufficient training, no matter how small their student population is.

To cope with this problem, Ho said the ministry would work out a mechanism to require schools with low enrollment to transform or withdraw from the market.

Eighteen college and university departments in Taiwan failed to recruit any students for the coming semester, commission figures showed.

All this is unsurprising, since it's well known that fertility rates, period and cohort, among the Taiwanese population rank among the lowest in the world. Numerous primary and secondary schools have also been forced to close down for want of young students. Taiwan's situation is admittedly extreme, but as the proportions of the young decrease as the proportions of the old increases, educational systems in any aging country are going to have to change. What can be done?

One approach would be for schools to try to recruit students from outside of their catchment area. Barring large-scale immigration to a region, it might be easy fo an educational institution--likely one at the university level--to recruit students internationally. Taiwan is reportedly trying to recruit mainland Chinese students, and Vietnam and the Philippines might also provide potential students through the marriage migration connecting these countries with Taiwan. This is hardly limited to Taiwan, but is worldwide. Certainly in the Canadian universities I've attended international students are quite numerous.

Another approach might be for these educational systems to retool themselves to deal with an older workforce. Greenspan in 2003 observed that aging populations had to increase their productivity to continue economic growth, yet relatively older populations often had relatively low education levels. Creating systems that would allow relatively older people to enter the education system in order to upgrade and renew their skills. Rihpahl and Trübswetter suggest in their discussion paper that this sort of phenomenon has already been going on in Germany.

Both of these approaches will likely be taken, along with others I've not mentioned here. Education systems are going change vastly, that's for certain, but what's not for certain is the possibility for these to adapt more-or-less successfully.

Demographic Link Dump - Asia Edition

In Japan, at least some companies are moving towards facilitating parenthood. It is not clear how extensive the phenomenon is or how effective it will be, but it seems like a sensible step. Interestingly, the programs seem exclusively focused on women. Presumably, Japanese men will continue to be expected to work late, leaving the burden of childrearing to the women. I'm not sure how appealing this is to Japanese ladies.

The local government in Shanghai is growing concerned about the city's rapid aging and is encouraging those who are eligible under China's one-child policy to have that second baby. I personally doubt the one-child policy will last for another decade but I'm not convinced that lifting it would change that much either.

In South Korea, producers of baby formula are struggling because of the low birth rate and so are the nation's maternity clinics: "The declining number of newborns is leading to a declining number of clinics. The country had 1,907 maternity clinics in 2005... ...and 1,669 last year. The clinics that remain in business seem to be surviving on side jobs rather than their traditional business of delivering babies. The message boards at imsanboo.com, an online community for pregnant women, are flowing comments from frustrated would-be women forced to move from clinic to clinic. Many mid-sized maternity hospitals are found to be blatantly refusing to deliver babies, instead focusing on easier and more profitable services such as skin care and cosmetic surgeries. .... ... The Health Insurance Service believes that only 30 percent of the country's maternity hospitals have capable personnel or equipment to deliver babies."

In Malaysia, the fertility rate continues to decline and it's now at 2.6, declining at about 0.1 a year. Strangely, the Malaysian Health minister attributes this to increasing medical problems with infertility among Malaysian women.

The Census Bureau on Global Aging

Earlier this week, the US Census Bureau released a new report on global aging which nicely complements the post Claus put up earlier this week on the same subject. To regular followers of this blog, the contents should come as no surprise, but it does provide a good summary of the global situation.

The global percentage of elderly people (65 and over) is expected to rise from 7 to 14 percent by 2040. 14 percent is not a problematic number in itself, the problem is rather the uneven distribution with a disproportionate number in developed countries. This will obviously continue. The median age in Japan is projected to reach 54 in 2040 with several European countries close to 50. Even the relatively youthful US is expected to approach 40.

As I said, none of this is unexpected and most people and governments are aware of this, even if they're doing precious little about it. For me, the big story of the next thirty years will be the rapid aging of Asia. It's not just Japan anymore. South Korea is aging faster than any nation in history. By 2040 China will also start suffering the very real effects of a shrinking and aging population. Given the enormous size of the Chinese population, there is just no way for immigration to compensate.

One last point: The report of the US census bureau is focused on the purely fiscal effects of aging. These are well know: increased expenditure on pensions and health care, shrinking work forces, increased dependency ratios where an ever shrinking of people have to provide for ever more people. However, this report like many others, seems to overlook the structural effects on the economy which is the basis of much of the work Edward and Claus has done here. I think the arguments are persuasive that aging leads to weak domestic consumption and increasing export dependency -but it's not feasible for everyone to be export dependent. By 2040, essentially all of the developed world will be aged, including most of Asia. By 2070, the same will probably apply to South Asia and the Middle East. What then?

Global Population Ageing - What Do We Know?

Update 1: I have added a comment below by Warren Sanderson who is one of the co-authors of the paper discussed below. It was first posted over on my personal blog where this entry has been up for a couple of days.

Update 2: Just to remind our readers (if they had not discovered it themselves) that there is a very interesting discussion unfolding in the post by Aslak about the correlation between higher overall fertility and non-marital births.

---

In this enty I am going to plug a recent paper on global ageing [1] by Wolfgang Lutz Warren C. Sanderson, and Sergei Scherbov published in the brand new journal, Journal of Population Ageing, edited by the team of demographers, Sarah Harper and George Leeson, at the Oxford institute of Ageing (Oxford University). Also, this would naturally be a nice occasion to ever so slowly reveal what I am arguing in the context of my own research; research which is naturally heavily affected by the likes of Lutz, Malmberg, Lee, McDonald and other of our time's great (econ)-demographers. [Graphs are made by the author and not taken from Lutz et al.]

With respect to Lutz et al they set out to grapple with one of the most difficult issues in the context of demographics and ageing in the form of our ability to forecast the future trends of ageing in the context of the global economy and different regions. The main conclusions indicate a rapid and, in some cases, accelerating process of population ageing in a global context in the next decades as well as a the very likely outcome that global population growth will cease to exist as a lingering phenomenon in the century which follows. Here is their abstract;

Population ageing is, in the first instance, a demographic phenomenon; although its consequences go far beyond demography. But the future trends of ageing are not yet known and many of the consequences of ageing will depend on the future speed and extent of ageing. Here we summarize what is already known and what is not yet known about future ageing trends in different parts of the world. We do this through the means of new probabilistic population forecasts. The section ‘New Regional and Global Probabilistic Population Forecasts’ presents the results of those forecasts. They confirm the earlier finding (Lutz et al., Nature, 412(6846), 543–545, 2001a) that it is highly likely that the world’s population growth will come to the end during this century. The following four sections present results for proportions of populations 60+, old age dependency ratios, proportions 80+ and average ages. In the section ‘New Measures of Ageing’, we analyse a new measure of ageing that takes life expectancy changes into account.

The first question which immediately springs to mind (or at least it did to me) is first and foremost what kind of techniques the authors are using in their endeavors to actually make forecasts on a variable as complex as ageing and so far into the future. Well, this is also where water gets muddied since it is important to realize, a priori, the amount of uncertainty which are attached to the kind of exercise Lutz et al. embark on. As most of you will know ageing is driven by the joint process of declining fertility and increasing life expectancy (and to some extent migration) and once we use this break down to operationalize ageing it gets dreadfully difficult to forecast although there are tentative conclusions which can be drawn based on existing evidence. In this way, it is important to dwell at the main conclusion, namely that the world as a whole is set to age rapidly before heading off into more specific forecasts.

The formal technique used by Lutz et al. is probabilistic forecasting which is basically a technique of collecting random draws from existing data on fertility, mortality and migration in order to produce a series of potential distributions and paths which can ageing can take as we move forward. Lutz et al. center on five simulations. The first in the context of total population size, the second on the proportion of people aged 60+, the third focuses on dependency ratios, the fourth turns the attention to the proportion of people aged 80+ and the final simulation centers on average age.

In relation to the first simulation which focuses on population growth it appears certain that the global population will continue to grow up until 2030-2050 depending on the path you look at. Beyond that point the simulations become extremely insecure ranging from a continuation of population growth to a decline in population growth which will restore the global population level at its 2000 level in the year 2100. Needless to say that such exercises are largely pointless from the point of view of inference about e.g. economic effects. However, what seems to survive as a main conclusion is that it is very likely that the tendency of population growth will come to an end some time during the next century, something which is significant in its own right in a world where the discourse on global warming, in my opinion, risks to engender policy advice to emerging economies which are essentially ill informed.

With respect to the paper in general I take away the following points in random order.

• The potential importance of migration. In this regard, it is worthwhile to have a look at the simulated path for population growth (and thus in some sense the change in age structure) for Eastern Europe and Sub-Saharan Africa. As many of you will have guessed the former shows a steady decline (rapid ageing) from 2010 and onwards whereas the latter is set to increase (in all probability) towards the year 2050 (and beyond). Although uncertainty remains it is undoubtedly true that in a world of complete equalization of factor returns and with no barriers (of any kind!) to labor flows a lot of the detrimental impacts from ageing could be mitigated. Having said this though, I still want to emphasise the importance of managing the transition in an emerging market context since all evidence points towards a much more rapid move towards below replacement levels once economic development sets in. In short, population managment policies need to look at both sides of the coin.

• A rapid increase in the proportion of 60+. Perhaps this is the most striking aspect of the coming process of ageing and whether we concur with the actual forecasts, there is no doubt that the change in age structure measured as an increasingly large share of, in this case, people aged 60+ is going to be extraordinary. According to Lutz et al. by 2040 the probability of the entire of Europe (CEE+Russia), Japan/Oceania as well as China having more than a third of its population aged 60+ is over 80%. This raises some extremely important important questions which researchers are only now starting to focus on. What happens to the labour supply of people in the 60s-70s? How does the life cycle of the young adjust to the skewed age distribution and what about that of the "old"? How should life expectancy be calibrated into the issue of raising retirement age for this growing age group? What happens to the productivity profile of society? And of course, my favorite; how will these changes be transmitted through capital flows both in a time series perspective (i.e. for the individual economy) as well as of course in a cross sectional perspective where the fact that all surpluses and deficits must add up act as a decisive binding constraint on the ability of some economies to smooth consumption and investment optimally.

• The analysis on old age dependency (60+/20-59) ratio mirrors the points above to a large extent, but leafing through some of the tentative conclusions e.g. in the context of Japan and China I am pretty amazed, if not scared, by the projections. Especially, in the context of the former some of the projected paths would quite literally mean that the market economy (with associated welfare structures) will cease to exist. The interesting thing about the latter (China) is of course that for all the hopes about China ascending to take over the baton of the US as the sole global leader, most people are missing the fact that the country, in all likelihood, is going to catch up (and surpass) large parts of the OECD in terms of ageing as soon as the 2020-2025 mark.

• Turning the attention to the forecasted share of people aged 80+ my own opinion is that this is pretty useless. I mean, I salute the effort but as the authors themselves point out; once we incorporate the long time horizons (up to 2100!) and most importantly the extreme uncertainty surrounding future mortality evolutions for this age group (both in terms of life expectancy at birth as well as on a cumulative basis for the people alive today) the uncertainty takes on huge proportions. What we know naturally is that the number will increase substantially, but also that it is likely to do so following a concave function of time as one would assume the extra gain in life expectancy gets smaller. [2].

Now, as Lutz et al never tire of pointing out throughout their excursion into the world of forecasting population ageing, this is all very uncertain and for two reasons primarily. Firstly, there is the inherent uncertainty associated with forecasting and essentially mapping changes in fertility, mortality, and migration. Secondly, there is the effect from moving the goal posts, or in this case; the reference points in relation to ageing. The simple point here is that it is not certain that old will mean the same thing tomorrow as it does today. This is especially the case of course if mortality continues to decline.

If this concludes the look on the paper by Lutz et al. I think it is worthwhile to produce something of an apology. Consequently, I have on several occasions pointed towards the futility (and in some cases stupidity) of narrating demographic changes in the context of what might and might not happen once the calendar shows 2050. Yet, here I even venture something about the state of affairs in the year 2100. An explanation is in order I think.

First of all, I maintain my view that the most important issue with respect to population ageing is the period one or two decades forward in time. Even if we might be able to plausibly say something interesting about ageing beyond this point the economic effects from ageing are correspondingly almost impossible to map. One good example here is the supposed asset meltdown scenario which is supposed to hit us in 2040-2050 as the weight of older age cohort's dissaving pushes up real interest interests and floods the market with assets (i.e. disinvestment) for which there is not a significant amount of takers. Not only do researchers only scantly understand what is actually meant by dissaving, there is also reason to believe that although optimal from an individual's life cycle perspective dissaving is not optimal from the point of view of an ageing society writ large [3].

With this general point in mind it is also worth recognizing a fundamental pre-requisite for focusing on ageing, namely the fact that the demographic transition is not over. It is ongoing and given the fact that the coming age of ageing which was initiated somewhere in the late 1960s (in the context of the OECD) it means that fertility will not stabilize at replacement levels. Despite the obvious reality of this point and the subsequent need to adjust models, views and analyses accordingly many still assume for example that global fertility, by some form of magic, is imbued with a drift parameter that will take it to replacement levels in the year 2100. Let me state as clearly that I can that such assumptions are completely useless. Interestingly and as a short digression, demographers have been focusing on this for quite some time and although the people at the UN, arguably, are getting better I would still recommend anyone interested in this to go back to the seminal volume edited by Jones et al and look up the chapter by Demeny where he ties the UN Population projections, of the time, up in knots. He essentially rams home the point that replacement fertility constitutes, in his own words, an implausible endpoint of the demographic transition; a point John C. Caldwell made already in the beginning of the 1980s. Whoever made the point first, this is extraordinarily important to take aboard.

In fact, I would take all this a step further.

In most modern accounts of the demographic transitions the traditional process is amended by an additional phase, or transition if you will, called the second demographic transition Van de Kaa (2002)[4] (or phase of ageing Lee (2003)). Now, I tend to take a more drastic approach. Quite simply I think that the transition need to be revamped all together and that a focus on ageing and age structure should be adopted at the offset. In this sense I think that Malmberg and Sommestad (2000) is a very important starting point since this the most comprehensive contribution which maps the whole transition in the context of ageing (specifically using Sweden). Working from this I believe that we can narrate the demographic transition in a way which makes it much more likely for us to use it to make inferences on economic processes which is ultimately my goal even if the study of demographics is a fascinating area in itself.

With respect to the question implicitly posed by Lutz et al. and thus how much we actually know about the global and regional process of ageing the initial answer has to be that we know quite a bit. Most importantly, you have to remember that ageing is not a new phenomenon and as I would argue a lingering aspect of the entire transition. The key is what happens next to mortality, fertility and migration and here uncertainty is vast although I should stress yet again that idea of convergence towards homoestasis in which these parameters are constant is not a desirable way to look at demographic processes. If we want to model this and if we want to make solid economic inference we need to take into account a myriad of feedback loops as well as the path dependency of the transition. With this end point it is perhaps apt to recall Socrates who reminded us of the fact that knowing that one knows nothing or very little is actually knowing quite a bit.

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For more on population ageing, the Economist had an interesting briefing on the issue a couple of weeks ago which touches on some of the same points as above and provides some nice examples and cases. Finally, I also think that I should plus Georg Magnus' book the Age of Ageing which is really also a nice introduction for the intermediate laymen. In terms of academic papers that offers a general introduction to the issue of modern population dynamics and ageing Lee (2003) is a must, but also this paper by David S. Reher is very good (I discuss the paper here). Hopefully, I will have my own contribution to offer soon which sets the demographic transition in the context of economics and how it should understood in order to best make the connection to the study of economic phenomena.

List of References

Harper, Sarah and Howse, Kenneth (2009) - An Upper Limit to Human Longevity?, Journal of Population Ageing, Vol 1, issue 2.

Jones, Gavin W; Douglas, Robert M; Caldwell, John C; and D'Souza, Rennie M (1997) - The Continuing Demographic Transition, Clarendon Press Oxford; chapter 5, Replacement Level Fertility: The Implausible End Point of the Demographic Transition, Paul Demeny.

Magnus, George (2008) - The Age of Ageing, Wiley

Malmberg, Bo and Lena, Sommestad (2000) – Four Phases of the Demographic Transition, ”Implications for Economic and Social Development in Sweden 1820-2000” Arbetsrapport/Institut för Framtidsstudier; 2000:6. The paper was presented at the SSHA meeting in Pittsburg. October 2000.

Lee, Ronald (2003) – The Demographic Transition – Three Centuries of Fundamental Change, Journal of Economic Perspectives vol.17 issue 4, pp. 167-190 fall 2003

Lutz, Wolfgang; Sanderson, Warren C; and Scherbov Sergei (2008) - Global and Regional Population Ageing - How Certain Are we of its Dimensions, Journal of Population Ageing vol 1, issue 1. '

Reher, David S (2007) - Towards long-term population decline: a discussion of relevant issues, European Journal of Population

Van de Kaa, Dirk J. (2002) – The Idea of a Second Demographic Transition in Industrialised Countries, National Institute of Population and Social Security, Tokyo, Japan 29 January 2002

Notes

[1] - The paper is walled for non-subscribers, and I can't of course upload a version here, but mail me and we can discuss the paper "further" if you like ...

[2] - Although it should be noted here that in a recent literature survey on human longevity by Sarah Harper and Kenneth Howse evidence is provided, from Japan, that mortality shows no sign of "compression" at older ages which indicate a linear rather than a concave function.

[3] - I will have much more about this in my next posts where I respond to this.

[4] - The idea of the SDT dates back to the 1980s and earlier works by Van de Kaa as well as Boongaarts.