Tuesday, May 30, 2006

Understanding Statistics: It´s all a matter of presentation

Statistics can be a tricky business if you don´t know what indicators mean and have to shift through dozens of tables and graphs to find the facts you need. So it´s always a pleasure when I see graphs and presentations done in an easy and understandable way for the general public. One of the best sites I´ve come across is Gapminder, who have created a simple tool for visualizing world development with various indicators collected via Google. Well worth trying trying out!

While you´re there also take some time to look at the World Developments Trends 2005 and the presentation "Has the world become a better place?". Keep a close eye on China and India and also note that many developing countries eventually end up with a TFR below two.

So what is the trend? Well, if the world economy keeps going like it is now things are looking up for everyone. The millenium goals are in sight.

Thursday, May 25, 2006

The nature of Germany's population as we move formard

It has been some time since anybody on the Demography.Matters team has put something up. I think we are busy at the moment doing other things because it most certainly is not lack of interest and spirit. (Upd. Incidentally Thomas has new post up just before this one) Well, apologies aside ... we are obviously bound to react when the NewEconomist duly prompts us back into action (literally:)) by pointing us to a recent report by Deutche Bank Research about Germany's demographic challenge (PDF-format).

Now, Germany's demographics have been on the agenda before (also here and here) but still the report's conclusions are worht a while. Remember, though, that we are forecasting here ...

"In the coming decades, the demographic changes looming ahead will hit Germany with an impact never felt before. This applies not only to the pension system. It holds equally for the labour market, and will entail repercussions for wages and interest rates and thus growth potential and international capital flows. DB Research has analysed the complex interplay of these factors by using an overlapping generations (OLG) model.

The main results of our simulations:

— The growth potential of the German economy will shrink from about 1 ¼% p.a. at present to a mere ¼% p.a. by about 2060.
— The annual increase in real income per capita will be dampened by up to 0.3 of a percentage point up to 2050, falling to just below 1% p.a. This comes to only one-third of the annual increases in prosperity from 1955 to 2005.
— Under “Status quo” conditions, the return on capital will decline by around 100 basis points by 2060.
— A change of pensions policy towards “More personal provision” would drive down returns by a further 35 basis points.

The findings of this study are generally in line with those of our past analyses pertaining to the demographic challenge, but they have to be interpreted with caution as they are based in some cases on very restrictive assumptions."

See also figure number 1 page 4 which shows the decline in the population and labour force from index 100 - 2004. Or as NewEconomist shows us with a quote ...

"Our projections suggest that the population in our “model world” will decline by a further 15% from 2050 to 2080 and then remain stable from about 2150."

Netherlands only European country where emigrants outnumber immigrants

For a change I can offer some news from home. After a massive influx of immigrants during the 90´s the Netherlands finds out it has become an emigrant country. In first place to be exact. In front of some regular countries we associate with migration like Poland.
The net migration graph for 2005 shows some interesting developments. Although you need to correct these numbers for population (e.a Lithania still comes first if we were to look at the number of net migrants per 1000 inhabitants, Austria is also an interesting case on the other side of the spectrum).

Net migration in EU countries, 2005

The Netherlands is the only country in Western Europe where emigrants outnumber immigrants. In 2005, an unprecedented 121 thousand persons left the country. Immigration totalled 92 thousand persons. Such a large negative netmigration is found nowhere else in Europe.

Emigrants outnumber immigrants since 2003
For decades, the number of people who came to settle in the Netherlands outnumbered those who were leaving the country permanently. This situation changed in 2003, when emigrants outnumbered immigrants for the first time. There seems to be no end to the emigration increase in the foreseeable future. In the first quarter of 2006 29 thousand persons left the Netherlands, 5 thousand more than in the same period one year previously and the negative net migration trend appears to continue and grow.

Of course details matter, while most people migrating fall in the 20-30 category there are some other trends. Some emigrants are getting older. This trend started in the 90´s as well.

Emigrants more often older people
Emigration increased in all age groups, but has particularly grown among older people. The population is ageing and the number of older people who consider emigration is also on the increase. The amount of emigrants over the age of 55 increased from 6 thousand in 1995 to 10 thousand in 2005. Spain and France in particular are popular destinations among older people. The majority of emigrants, however, are in their twenties and thirties.

source: Statistics Netherlands

Tuesday, May 16, 2006

Portugal's Pension Reform

by Edward Hugh

Portugal is going to reform it's pension system. This is hardly 'breaking news', but still it is something. Details at present are few, and probably it is a case of too little too late, but nontheless there do seem to be some interesting details. Like the idea of attaching contributions to the number of offspring. This makes a good deal of sense. In the short term this will not change things very much, but it may be a step in the right direction:

Workers with fewer than two children will have to contribute more to their government pensions under planned reforms to prevent the collapse of Portugal's retirement system, the prime minister said in an interview published Monday.

Contributions would stay unchanged for people with two children, decrease if they had more than two and increase if they had fewer, according to an interview with Socialist Prime Minister Jose Socratesto published in the Financial Times.

A Portuguese pension is calculated as a percentage of the top-earning 10 years of the last 15 years of the recipient's working life.

Under the reforms, the pension would be calculated according to the employee's entire working life, the Financial Times said.

Oh, and there was one other snippet in the same article:

With retirements looming for 78 million baby boomers, the trustees for the U.S. Social Security program said this month that its trust fund will be depleted in 2040, a year earlier than expected.The point at which the program will pay out more in benefits than it takes in will occur in 2017.

Tuesday, May 09, 2006

Islam in Russia: Evolution in action?

Last month, The Globe and Mail of Toronto published a series of five reports by Graeme Smith, "Russia Shrinks", devoted to an examination of some of the demographic dynamics at work in the present Russian Federation: the high death rate, the suspicions of Chinese immigration, most worryingly the growth of violent racist youth gangs and paramilitaries. Smith's report of the 25th, the article "Tensions rise in Lenin's hometown" was particularly interesting, examining the growth of Christian-Muslim tensions across Russia through the prism of events in Ulyvanosk Oblast.

Abdul Karim, 26, knelt on the thick carpets of the mosque after evening prayers and described how his Russian neighbours are getting interested in the previously obscure study of demographics.

"They know the number of non-Christians is increasing," Mr. Karim said. "They're afraid Muslims will populate the whole country. Muslim families have three or four children. Russians have one. The math is simple. Naturally, they're afraid."

Russia is shrinking. Demographers predict the country will lose almost a third of its population in the next half-century. But some minorities, most notably the Muslims, are defying the trend -- and their flourishing numbers have revived ancient fears among the ethnic Russians about being overrun.

Russia doesn't officially count its religious minorities, but estimates of the country's Muslims range from 14 million to 23 million, or 10 to 16 per cent of the population. Despite the imprecise numbers, it's generally accepted the figure is growing quickly. Fifteen years ago, Russia had about 300 mosques; today, there are at least 8,000.

Smith goes on to observe that in Ulyanovsk Oblast, even as the total population has shrunk the Tatar Muslim population has grown sharply to reach 12% of the province's total population. He fits this into a general and growing hostility towards Muslims in Russia, precipitated by the bloody wars in Chechnya and exacerbated by the fact that Muslim populations in Russia are growing where non-Muslim populations are shrinking. Islam is newly visible in Russia, and this disturbs many. American observer Paul Goble has gone so far as to predict that Russia will become a Muslim-majority country, pointing out Russia's Muslim population has increased by 40% and claiming that anywhere from 2.5 million to 3.5 million Muslims now live in Moscow.

Gobel and others are quite correct in noting that Islam in the Russian Federation has become more prominent than ever before. However, contrary to what some people might believe, Islam in Russia has a long presence, extending at least as far back as the conquest of the regions of the Middle Volga in the 16th century, which brought the Tatars and related Turkic peoples on the Middle Volga into the Russian state. In the 18th and 19th centuries, Russian conquests in the North Caucasus brought the Muslim peoples of this region--Dagestanis, Circassians, Chechens, Ingush, and others--into the Russian state. Further afield, the independent states of Central Asia and Azerbaijan were brought into the Russian state as part of the same imperialist push that incorporated the North Caucasus. Total estimates on the size of Russia's Muslim population vary substantially, ranging from a low of 5% who describe themselves as practising Muslims to 17% who are of Muslim background. Suffice it to say that Russia's Muslim community is of much older vintage than the Muslim communities of other European countries, and that it is both absolutely and relatively much larger than any found in the European Union. If anything, the collapse of the Soviet Union has left Moscow with many fewer Muslims under its rule than it had for generations; if, as some suggest, the North Caucasian republics are allowed to drift away from Russia on the model of France's withdrawal from Algeria, the numbers will at least stabilize if they don't drop still further.

Will Russia be Islamized as the population of ethnic Russians shrinks while the Muslim populations grow? This depends on what one means by "Islamize." Certainly the profile of Muslims in Russia is going to increase sharply, as it has since the 1980s when the Muslim populations of what was then the former Soviet Union began to oppose the forced secularization and Russification of the Communist era. It would have to have risen--the sharp growth in the number of mosques has to be seen in the context of the general revival of religion in post-Communist Russia. Further, the fact that the Muslim population of the Russian heartland is growing sharply has to be seen in light of the fact that this area is not only richer than the Muslim areas of the North Caucasus, itself one of the poorest regions of the Russian Federation, but that the Russian heartland's relative wealth makes it a magnet for immigrants from across the former Soviet space and beyond. People from Kyrgyzstan are as likely to migrate to the Russian Federation as people from Moldova; life in isolated post-Soviet countries is equally hard regardless of whether the religion of the majority population is Islam. Too, it's worth noting that Muslim-majority former Soviet republics all exhibit TFRs lower than those exhibited in North America or Australasia in those continent's post-Second World War baby booms, often much lower; Soviet rule really did accelerate the demographic modernization of these areas.

Valery Tishkov and Valery Stepanov took an invaluable look at the evolution of the Russian population in their analysis of the 2002 Russian census. They noted that "[t]he overall number of Russians decreased by 3%, and their share in the country's population fell by 2%" owing to the aging of the Russian population, but further noted that this overall tendency towards population shrinkage was substantially compensated by the immigration of Slavs and by the assimilation of such ethnic minorities like Russia's Ukrainians, Chuvash, Mordovians, and Belarusians. Russia's Muslim populations did resist the tendency to assimilate somewhat: The country's substantial Tatar, Bashkir, and (surprisingly) Chechen populations did grow somewhat through natural increase, while immigration was responsible for the sharp growth of Kazakhs and Azeris. The Muslim peoples of the Russian Federation are only somewhat behind their non-Muslim counterparts in the demographic transition; as Nicholas Eberstadt noted in a September 2004 analysis ("The Russian Federation at the Dawn of the Twenty-first Century: Trapped in a Demographic Straitjacket", PDF format), only the republics of Ingushetia and Dagestan seem to be at replacement levels of fertility. Even assuming that out-migration from Muslim-majority areas has artificially depressed measured fertility, Russian Muslims aren't having that many kids. If the Tatar women of Ulyanovsk really are all having three or four children, they're decidedly anomalous.

None of this means that the Russian population of 2050 is not going to be more Muslim in origins than the Russian population now. It certainly will be: Russian and Eurasian Muslims might be well advanced in the demographic transition, but population momentum inside the Russian Federation and migration from the Russian near abroad is going to push the total proportion up. I remain skeptical, given low rates of religious practice, high rates of intermarriage and assimilation, and the nature of Russia's Muslim community as an aggregate of multiple diasporas, that most of the Russian population is going to be made up of practising Muslims as some Russian Muslims predict. Like most former empires, Russia is a pretty effective melting pot: Even Tatarstan's relatively successful nation-building is weakened by the dispersal of most Tatars outside of Tatarstan and by the relatively high rates of assimilation inside that autonomous republic. Besides, given the apparent ascendancy of the ideology of Eurasianism in Russia, it's not at all obvious that a more strongly Muslim population will necessarily change that much, at least so long as obvious provocations are avoided on all sides and the full assimilation of Russian Muslims as equal citizens made possible.

Unfortunately, as Dora Apel warns at Open Democracy, the ascendancy of xenophobic and explicitly anti-Muslim ideologies in Russia and the Islamization of the Chechnya issue threaten to do just this. It goes without saying that this is a terrible mistake. Russia's population is projected to decline sharply in the generations to come, even with the demographic dynamism lent it by its Muslim populations. Especially with the prospect of western and central Europe offering better living and working conditions for potential migrants, Russia just cannot afford to exclude a large and growing share of its population. Frighteningly, it may do just that with obvious calamitous consequences for everyone involved. Here's to hoping that the best-case scenarios materialize.

Friday, May 05, 2006

Does the Canadian example work for France?

Sarkozy's proposed new immigration policies for France are somewhat flattering for Canada, inasmuch as observers have pointed to Canada's immigration policies and inflows as ideal situations for France.

France's plan to cherry pick immigrants with the skills it needs is a step in the right direction if the euro zone's second biggest economy wants to remain competitive, according to analysts.

Their main caveat is that the new immigration bill, which Interior Minister Nicolas Sarkozy unveiled amid controversy this week, might not go far enough to beat off international competition to attract the best brains in the world and keep the economy ahead in terms of skills and productivity.

Sarkozy has proposed creating a 3-year residence permit for qualified workers and making it easier to recruit foreigners in sectors that face staffing shortages, such as catering.

The bill also plans to force newcomers to take French and civics lessons and an end to the automatic right to a long-term residence permit after 10 years in France. But firms and economists are focusing on the move to selective immigration.

"Today it is a real battle to bring over foreign workers," said Jerome Renon, director of France Immigration which specializes in helping companies with immigration issues. It has about 40 clients, most of them big international firms.

"There is so much unemployment in France that it is difficult to bring in foreigners -- you have to explain to immigration officials why you need this person when about 10 percent of people in France are out of work."

The main criticism that this bill has received from economists is that it is too timid, particularly in its relatively delayed and insecure extension of citizenship and residency rights. France certainly has its own attractions, not least its status as the second- or third-largest national economy in the European Union and its centrality in la francophonie, but will these be enough given France's late entry?

That said, the success of Canada's immigration policies isn't unqualified, but is in fact highly contingent on a suite of demographic and economic factors.. It is true that, compared to France's incoming migrants, Canada's incoming migrants tend to benefit from higher levels of education than their French counterparts. That said, I wonder if the relative success of Canadian immigration policy might stem from the fact that Canada's population profile is well-suited for a strong migrant flow. Canada's population profile is fundamentally dissimilar from France, Canada's population being younger, with fewer children but many more immigrants. Canada's TFR of 1.53 children born per woman is decidedly low by the standards of other First World Anglophone and Francophone countries, and partly as a result, fully two-thirds of Canadian population growth comes from immigration.

Normally such a high rate of immigration-driven population growth might be expected to cause a serious stir, but it hasn't. Why? I suspect that one reason lies in Canada's maintenance of rates of labour participation considering above typcial western European neighbours. Without immigration and with Canada's birth dearth, in fact, there might conceivably be labour shortages across the country. Immigration fills a necessary economic role with relatively few apparent negative consequences. At present, as Brian Ray wrote for Migration Information ("Canada: Policy Changes and Integration Challenges in an Increasingly Diverse Society "), in recent years a bit more than half of Canada's admitted economic immigrants admitted according to the point system geared towards the admission of economically suitable immigrants, while a quarter or so are admitted under the guise of family reunification and most of the remainder are refugees. If labour market conditions were more difficult, quite conceivably Canada's 20th century immigration policies might have moved away from their current focus on economic and humanitarian grounds for migration.

Even though Canada's immigrant inflow is overwhelmingly directed towards urban areas and tends to be highly skilled, there is still a lag of a decade before employment catches up to levels among the Canadian-born, even now after the past decade of strong employment growth noted last month by Statistics Canada. More worrying that, even after the lag time is ended and relatively high levels of human capital, immigrants in Canada seem to lack the social capital necessary to succeed, with levels of poverty which remain above and levels of income which remain below the standards experienced by the average Canadian-born. It's not at all uncommon to hear about people highly educated in one country who comes to Canada and find that their credentials and experience aren't recognized in Canada, forcing them either to train to gain Canadian credentials or to work below their skill levels even though they may have been admitted because of their experience at home. This unjust outcome may just be tolerable--for immigrants and for the wider Canadian population--when the availability of employment per se isn't in question, and especially when Canadian-born citizens don't suffer visibly as a consequence. In the context of the rigid labour market that still exists in France the admission of highly-skilled immigrants, this may well be a recipe for social disaster. I suspect that unless Sarkozy is careful, ensuring the full recognition of foreign credentials at a minimum so as to allow for the free circulation of immigrant professionals in France at large, his plans might be a bit premature.

Germany gives the family a try

In an effort to boost fertility Germany is taking another small step in 2007 by setting up a "familien politik". This time in the form of "elterngeld" whereby the parent (in Germany by tradition always the mother) who stays at home for the first 12 months receives a 67% compensation of their net income up to a certain maximum, plus if the father also pull his weight that period can be extended by 2 months to 14. Another step, but is it enough?

What´s so special about this program is that for the first time it also puts some responsibility on the father to stay at home. That´s a first. Germans still have a traditional view of the family with the "caring mother" at home and the husband at work. This view is reflected in the political spectrum as well. The conservative CSU needed some persuading by Familienministerin Ursula von der Leyen* while parties on the left had issues with finances and the progressive compensation system.

Is this enough to give the birthrate a boost? If there is, the effect it will be limited. First, the truth is there´s really no way to pay for this, but the money has to come from somewhere. So families will be hit by various tax hikes in 2007. Like the planned 3% VAT hike which will hit people with children far more than those without. Second and perhaps more importantly the "children should stay at home"-view continues to dominate. There´s still no proper infrastructure for childcare, at least in West Germany. Something like creches or childcare facilities are still a rarity there. Third the effect may only be temporary, leading to temporary increase in births by women who planned to have children anyway before falling back to the average level. Finally, some programs can be counterproductive. An earlier attempt by Schroder´s Red-Green coalition were women could stay home for 3 years before returning back to work resulted in a lot of women not going back to work at all.

* Also known in Germany as "Supermutter" because she has seven children and is proud to show off that it is possible to have a career at the same time, much to the chagrin of some in Germany.

Monday, May 01, 2006

Japan A Suitable Place For Children?

by Edward Hugh

The Japanese newspaper Asahi this weekend published the results of a survey carried out on behalf of the Japenese cabinet office into attitudes towards having children in Japan, South Korea, France, Sweden and the US.

Whereas in Europe and the United States respondents tended to indicate they expected to have all the children they wanted, of those Japanese interviewed who said that they want to have more children, 53.1 percent said they do not plan to do so. More than half of the South Koreans said the same.

When asked whether they considered Japan a suitable place to bear and raise children, 50.3 percent of the Japanese respondents completely or somewhat disagreed. In South Korea, 79.8 percent said their country is unsuitable for raising children. In contrast, 97.7 percent of Swedes said their country is suitable, while the figures were 78.2 percent in the United States and 68 percent in France.

These results whilst not conclusive about anything do put me in mind of Wolfgang Lutz's fertility trap hypothesis. Basically the idea here would be that once low fertility has continued for a significant time (low fertility is defined by Lutz as below 1.5TFR, and Japan has now been below the 2.1TFR replacement level for several decades) it may be hard to raise the expectations of people about the number of children they are likely to have, especially if economic conditions at the same time exert pressure on your capacity to do so. Japan would therefore be a classic case of such a possibility. The latter point seems to be reinforced by the latest findings in another Asahi survey, which suggested many people in Japan seem to feel that their living standards have deteriorated during the Koizumi era.

Forty-two percent of those responding to an Asahi newspaper survey said their livelihoods deteriorated under the leadership of Prime Minister Junichiro Koizumi. Just 18 percent said they are now better off.....

Japan is just beginning to consider the social costs of some of Koizumi's policies. During his tenure, the government has trimmed pension and health benefits. Among other changes, inheritance tax laws were altered to simplify the transfer of large assets, and capital-gains taxes were lowered......

At the same time, Koizumi hasn't matched Japan's debt sales with the kinds of tax cuts that might benefit the broader economy. Japan doesn't need to make rich people who invest in stocks or real estate even richer; what it needs is babies.

Because of a low birthrate of 1.26 children per woman, Japan's population actually shrank in 2005. If you are going to cut taxes, why not do it for young families to boost the nation's birthrate? Without a significant increase in the number of births, Japan may never get out from under its debt load. Its debt-to- gross-domestic-product ratio is about 151 percent, the highest among developed nations.

Eastern Europe Moves West?

by Edward Hugh

Today, May 1, Spain, Portugal and Finland join Britain, Ireland and Sweden in ending all restrictions on movement of workers from new EU member states.In some ways, as this AP article suggests, this is a historic moment, since for many young peoplethe gradual labor market liberalization has meant opportunities their parents' generation could hardly have imagined.:

"Some of the workers benefiting from the lifting of labor restrictions are so young they lose sight of the historic change this marks for Poles, Lithuanians, Czechs and the others who, until 16 years ago, were trapped behind the Iron Curtain and banned from traveling freely to the West".

The movement started in earnest around 2 years ago:

Since 2004, the new EU members — eight eastern European countries along with Malta and Cyprus — have seen their citizens board budget flights to Britain, Ireland and Sweden in large numbers to seek jobs.

No country has sent more workers than Poland, whose 38 million people make it the largest EU newcomer by far, and whose jobless rate of 18 percent — the highest in the EU — pushes many, especially the young, to seek a better life elsewhere. About 200,000 Poles have registered to work in Britain since 2004, with some 100,000 in Ireland and 8,000 in Sweden.

But even more — up to 1 million Poles — are believed to be working now throughout Europe, sometimes illegally in countries like Germany that haven't formally opened their labor markets, said Krystyna Iglicka, a migration expert with the Center of International Relations in Warsaw.

But these workers, which represent a huge 'bonus' for the receiving countries, also represent a loss for the ones who see them depart, since the ageing and low-fertility issues are, if anything, even stronger in Eastern than in Western Europe:

"In this situation, you lose the most active elements because the less exciting people stay at home and drink," said Krzysztof Bobinski, an analyst at Unia & Polska, a pro-EU organization. "I wouldn't call it a 'brain drain' because that term makes me think of rocket scientists. But it is a hemorrhaging and I don't think it's going to do Poland any good in the long run."

Emigration is also depriving Poland and the neighboring Baltics of much-needed labor, threatening to slow some of the EU's fastest-growing economies. Estonia, Latvia and Lithuania, which are home to just 7.2 million residents, estimate the numbers that have left are in the tens of thousands — possibly more.

Poland has already noticed a dangerous shortage of anesthesiologists. And the western Polish city of Wroclaw is so concerned departures could cause a shortage of skilled workers in coming years — and dampen a local investment boom — that it plans an advertising campaign in Britain this September letting Poles know attractive jobs await them back home.

Baltic construction companies have been particularly hard hit, and several have begun looking east to Russia and Belarus for workers.

Lithuanian Rimantas Bublys said his company, Vigysta, had to cast aside any and all standards for employee behavior just to keep its projects moving forward.

"Two years ago we used to fire our workers who were lazy or had drinking problems," Byblys said. "Today we cannot afford to fire anyone because there are no replacements available. Our business would simply stop."

You only have to look at China, and see how huge labour surpluses have now, in some areas, been rapidly converted into labour shortages to see what might happen, and how today's boom could so easily become the crisis of tomorrow.