The EU in a Global Perspective and the Demographic Challenges The EU in a Global Perspective and the Demographic Challenges associated with the “Second Demographic Transition”associated with the “Second Demographic Transition”

Ron LesthaegheRon Lesthaeghe

Gastner-Newman cartogram – proportional to total population size

Part 1: The formal demographic core.

• The 2 mechanisms of ageing.

• Population growth (shrink) momentum.

• Replacement migration.

Survivors per 100 000 births with varying life expectancies at birth : From a “neutral” mortality decline to squaring off and pure aging effect

The stationary population view: from a neutral mortality decline to pure aging

Stable population age structures with constant e0= 80 years, but varying total fertility rates. (1.58 to 2.20)

TFR

Negative Growth Momentum : Italy

0

5000

10000

15000

20000

25000

30000

35000

Year

Siz

e

2016

2031

2046

2061

never

Year TFR reaches 2.06 again i.e. Replacement level

TFR back to 2.06Children (from 1.25)

FemalePopulationSize

X

X

X

X

X = about stationaryIn closed populations that have grown very old as a result of sustained

sub-replacement fertility, there will be a CONTINUED shrinkage for 50 years AFTER the restoration of exact replacement fertility

The Negative Growth Momentum

Aging bulge: unavoidableAfter a long period of

subreplacement fertility, there is an unavoidable aging bulge even if fertility returns to replacement level

Percent 65+ Italian women if TFR is restored to replacement level at various dates

0

5

10

15

20

25

30

35

40

45

2001

2011

2021

2031

2041

2051

2061

2071

2081

2091

2101

2111

2121

2131

2141

Year

Pct 65+

2.06 in 2016

2.06 in 2031

2.06 in 2046

2.06 in 2061

never

The “Second Demographic Transition” view

Primary determinants of below replacement fertility:•Economic : Elevated standard of living & high consumption aspirations, need for double income, high opportunity cost globalization world economy.•Cultural : Higher order needs accentuated (self-actualization, expressive values, individual autonomy, freedom of choice, open future,”postmaterialist” political aspirations …)(cf. Maslow’s hierarchy of needs)•TOGETHER Second Demographic Transition (SDT)

Demographic characteristics of the SDT:•Postponement of marriage and parenthood, use of efficient contraception.•But : varying degrees of catching up of fertility at later ages (main source of difference between TFRs above and below 1.5)•Hence structural, not temporary, sub-replacement fertility, but at varying levels !•Rise of alternative living arrangements : longer periods living with parents, living alone, in cohabitation, procreation within cohabitation, post-marital cohabitation, LAT relations, etc.

Caveat : Intermediate phase between First DT and Second DT : Sexual revolution, but no transition to efficient contraception = recipe for high teenage fertility, shotgun marriage, young age divorce, early single motherhood, compromised life chances. US is typical example. One of the main reasons for US TFR being = 2.0. Also major danger for 1st generation immigrant youths from non-patriarchal societies.

1.The Fertility Story

• Careful with period measures !!• Postponement & Recuperation in

Cohort Fertility• The Spanish Cohorts

a positive association between SDT and period total fertility : classic case of split correlation

Bulgaria

P oland

GreeceSlovakia

Luxembourg

The NetherlandsUnited Kingdom Finland

Denmark

France

Sweden

Lithuania

Latvia

Spain

ItalyHungary

Austria

EstoniaCzech Rep.

P ortugal

Germany

RussiaCroatia

Ukraine

Romania

Ireland

Iceland

Slovenia

Belarus

0

1

2

3

4

5

6

7

8

9

10

1.00 1.20 1.40 1.60 1.80 2.00 2.20TFR

SD

T In

dex

Figure 8a: SDT Index and TFR in 2004 (r=0.71)

All stronger recuperation countries

No or weak recup & late starters

Source of plot : Tomas Sobotka, 2008. Interpretation : Ron Lesthaeghe 2008.

1.50

A strong SDT – fertility postponement link

LithuaniaRussia

Belarus

BulgariaEstonia

Slovakia

RomaniaLatvia

Poland

IrelandCzech Republic

HungaryPortugal

AustriaSlovenia

CroatiaGreeceItaly

Spain

France

United Kingdom

Denmark

Germany

The Netherlands

Finland

Sw eden

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

1980 1985 1990 1995 2000 2005 2010

Year when mean age at first birth increased by 2 years

SD

T2

Ind

ex

SDT vanguard

SDT tail

Source: T. Sobotka 2008.

Deficits CCFR Netherlands

-1000

-800

-600

-400

-200

0

200

<20 <20-24 <20-30 <20-34 <20-39 <20-44 <20-45+

Age Brackets and Baseline (1940-44)

Defic

ets,

Tho

usan

ds o

f Birt

hs

1945-1949

1950-1954

1955-1959

1960-1964

1965-1969

1970-1974

1975-1979

1980-1984

Deficits CCFR Portugal

-900-800-700-600-500-400-300-200-100

0100200

<20 <20-24 <20-30 <20-34 <20-39 <20-44 <20-45+

Age Brackets and Baseline (1940-44)

Defic

ets,

Tho

usan

ds o

f Birt

hs

1945-1949

1950-1954

1955-1959

1960-1964

1965-1969

1970-1974

1975-1979

1980-1984

TROUGH RECUP

PTFR(t+30) = A + B1*BaseCTFR(t=0) + B2*TROUGH(t) + B3*RECUP(t) + e

Trough = deficit in cumulated CASFR at age 30 compared to baseRecup = part of trough recuperated by age 40Sample= all never communist European countries, baseline = cohort born 1940-44, predicting PTFRs in period 1960-2005.

RESULT : baseCTFR only Rsq. = .505, baseCTFR + Trough Rsq= .673, all 3 including Recup then Rsq= .793. Hence : RECUP IS ESSENTIAL.

ONLY countries dip below a TFR below 1.5 that have no or weak recuperation.The “Bongaarts’ babies” have remained in his cupboard in a large number of countries, and will stay there for as long as there is no recuperation of fertility after age 30.

-1.60

-1.40

-1.20

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

15 20 25 30 35 40Age

Cum

ula

ted d

iffere

nce fro

m t

he b

ench

ma

rk c

ohort

….. ..

1940

1945

1950

1955

1960

1965

1970

1975

1980

Benchmark CTFR (1940 cohort): 2.93

-1.60

-1.40

-1.20

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

15 20 25 30 35 40Age

Cum

ula

ted

diff

ere

nc

e fro

m th

e b

en

chm

ark

co

hort

…

..

..

1955

1960

1965

1970

1975

1980

Benchmark CTFR (1955 cohort): 1.90

-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

15 20 25 30 35 40Age

Cum

ula

ted

diff

ere

nce

fro

m th

e b

enc

hm

ark

coho

rt

…

..

..

1955

1960

1965

1970

1975

1980

Benchmark CTFR1 (1955 cohort): 0.896

-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

15 20 25 30 35 40Age

Cu

mu

late

d d

iffe

ren

ce

fro

m t

he

be

nc

hm

ark

co

ho

rt

…..

.

.

1955

1960

1965

1970

1975

1980

Benchmark CTFR3+ (1955 cohort): 0.334

Cohort Fertility Postponement & Recuperation, Spain. (benchmarks coh40, coh55)

SDT and TFRs : inconsistent or double effect ?

Self-actualisation, keeping open future.

Emancipation: gender equity & better division

of labour in family.

Organisation & policy aspects re independence of young adults and reduction opportunity costs (child care facilities, schooling, allowances & benefits), housing opportunities.

SDT

Postponement

Recuperation

Overall fertility

+

+

_

+

Social & Economic constraints: longer education, deregulation labour market etc

FAC1_1: SDT – Postponement of Marriage, Parenthood and Overall Fertility, 1995-2001

D ata colum n: FAC 1_1

-1.91 - -0 .86

-0.86 - -0 .41

-0.41 - 0 .16

0.16 - 0 .97

0.97 - 2 .03

D ata co lum n: FAC 1_1

-1.91 - -0.86

-0.86 - -0.41

-0.41 - 0 .16

0.16 - 0 .97

0.97 - 2 .03

FAC5_1: SDT – Non-conformist Family Formation (Cohabitation, out-of wedlock fertility, single parent household, abortion), 1995-2002

D ata colum n: FAC 5_1

-1.93 - -0 .84

-0.84 - -0 .12

-0.12 - 0 .16

0.16 - 0 .79

0.79 - 3 .15

D ata co lum n: FAC 5_1

-1.93 - -0.84

-0.84 - -0.12

-0.12 - 0.16

0.16 - 0 .79

0.79 - 3 .15

The Migration IssueResults of a simulation excercise for the EU-12, 1995 to 2060

Population 65+ in EU 15 in 3 Scenarios

PERCENT 65+

IF NO IMMIGRAT.

IF CT POP SIZE MIGR.

IF CT SIZE 15-64 MIGR

IF CT RATIO 15-64/64 Migr

2000 16.5 16.5 16.5 16.5 2025 23.4 22.5 21.5 15.4 2050 29.7 26.3 24.7 15.2 Perc. Points Change +13.2 +9.8 +8.2 -1.3

UN Population Divn.

Scenario with constant dependency ratio leads to irrealistic growth and growth waves. xxxxxNote : UN assumes instantaneous drop immigrant fertility level to that of host country – too strong !

EU-12 aging if e0=80 and TFR=1.64.1985 =>2060

growth of immigrantpopulation EU-12 , stockin 1985 + Descendants+400 000 newcomers p.a., fertility drops from 4 to 1.64 in 2010

EU-12 Female Pop.

Migrant extra female population.

15

9

3

0

3

2

1

EU12 nationals + descendants

Descendents of foreign mothers but born in EC12 after 1.1.85

Foreign stock of 1985 ( old survivors) and all foreign born after 1.1.85

SCENARIO: everyone e0=80; immigration=400.000 pa.;TFR nationals=1.64, TFR immigrants drops from 4.0 to 1.64 by 2010

Disaggregated projection for EU12 women, 1985-2060

TFR of native and foreign populations - selected European countries 1975 - 2001. Sources: SOPEMI, national statistical offices.

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.519

75

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

E&W New Commonwealth

France all women

France all foreign

Sweden all foreigners

Dutch

Turks in the Netherlands

Swedes

England and Wales all birthplaces

Source : D. Coleman

Dark blue: active CatholicLight blue : Non-active Cath.

Green: Islam-SunniBlack: Islam-Sharia

Purple: Protestant + otherRed : Agnostic

(Read outward)

Age & Religion Composition, IIASA projections for Spain. 2009, 2019, 2029.

Source : Katja Sherbov, Dec 2010

Long term SDT – views :

• Sustained below-replacement fertility, caused by postponement and very little progression beyond 2 children. Rise childlessness among couples.

• But very different TFR levels (say from 1.0 to 2.0), depending on degree of fertility recuperation at later ages (30+)

• Negative population growth momentum set in motion : population becomes so old that decline will not stop when TFR reaches replacement again. Decline continues for another 50 years. Unavoidable major aging bulge too.

• Need for replacement immigration, but mainly useful for maintaining absolute sizes of total population or of total active population. Less useful for reducing aging ( but not useless !)

• Replacement migration = family migration or family reunification, not just temporary guest workers.

• But once TFRs remain below 1.5 : no adequate solutions anymore.• Hence strong connection between SDT and international migration.• And also : SDT leads to multi-cultural, multi-ethnic and multi-lingual

societies, which can have very different degrees or patterns of integration.• SDT = no convenient equilibrium !

Part 2. Various measures compared

BUT !!!

ONLY the DENOMINATOR CONSIDERED HERE, I.E. THE ECONOMICALLY ACTIVE POPULATION

NOT THE NUMERATOR: DEPENDENT PENSIONERS.

3 MEASURES COMPARED•Increase in fertility•Increase in Labour Force participation rates ( activity rates)•Increase in immigration

MacDonald-Kippen Total Labour Force Projection Scenarios

• Effect of TFRs returning to 1.80 children in next 15 yrs ( starting +- in 2000)

• Effect of Rises in Labour Force Participation rates : Males : after age 30 rising to levels of 1970; Females : rising to Swedish levels at all ages ; change over next 30 yrs.

• Effect of Increasing Net Migration to 0.5 pct of Total Pop. Size : D=200.000pa =>408.000, F & UK= 35.000 => 290.000, US= 760.000 => 1.369.000 pa.

BAU

BAU= Business as usual

ALL CURRENT TFR, MIGR, LF Particip.

CURRENT TFR, LF particip, NO MIGR

TFR to 1.8

MIGR = 0.5% paLF partic to high levels

Optimistic Combination

BAU

BAU

BAU

Homework for entire EU

• Favor gender symmetry in housework & earnings;

• Maintain & increase female employment rates, but reduce opportunity costs (child-care !!!)

• Do not reduce immigration, but try to manage it with respect to education and favorable adjustment characteristics.

• Increase labor force participation rates, esp. after age 55.

Can the SDT spread to non-western populations ?

• Overall answer : spread of SDT already occurring in other societies, but not necessarily according to a western sequence.

• Lowest-Low fertility in Japan, S. Korea, Singapore, Hong Kong, now also caused by massive postponement..

• Sub-replacement fertility in Caribbean area (from Cuba to Trinidad ), in 2 Indian states and several Indian metropolitan areas, and even in several Muslim populations (Tunisia, Iran). Sub-replacement fertility widespread in most Chinese provinces.

• Take off of premarital cohabitation documented in Japan and Taiwan. “Cohabitation boom” in Latin America.

• In Japan, Korea, Singapore : postponement of parenthood equally linked to expressive and individualistic value orientations at the micro level ( but not or less strongly to religion/secularism).

• But : many of these societies have no experience with multi-culturalism (e.g Japan, S. Korea versus Singapore)

Future of migration as seen through the SDT perspective.

* Migration will continue to gain importance.* Many populations still have high TFRs, and large countries such as India, Pakistan, Bangladesh, Philippines, Indonesia, Mexico …will still produce a positive population growth momentum for several decades to come.* Several African populations ( lower on AIDS) have very high fertility and are also exhibiting a major growth momentum.* No shortage of areas with high population pressure in the next half century, but older and more typical recruitment areas may have reduced capacities for sending migrants. * Hence : geographical/cultural shifts are likely with respect to areas of origin.* Caveat : migrations can also occur even if sending country has very low fertility ( e.g. Polish, Eastern European migration to EU).

Conclusions

• No way to stop ageing via replacement migration alone : numbers completely irrealistic (unless “deportation”)

• Replacement migration is only a partial measure which works best if immigrants are in families, sex-balanced, with fertility at or above replacement level. Single sex labour migration is not demographically sound.

• Replacement migration leads to “multicultural” societies, but it takes several generations to get to a decisive shift with respect to “ancestral origins”. Question : are the third and fourth generations “integrated”?

• Short term imperatives for D,NL,B : increase labour force participation after age 50 !

• Overall : increase productivity via technological innovation and sound capital investment. And reduce public debt !!

Health care expenditure

Greenhouse gases emissions.

Child mortality

IS THERE ENOUGH TO GO AROUND ?

In millions, UN Medium projections, 2006 revisions.

Total Pop 2005 2050 Increase

Europe ( incl Eur. Russia) 731.1 664.1 - 67.0

Turkey 73.0 98.9 +25.9Philippines 84.6 140.5 +55.9

Bangladesh 135.2 254.1 +118.9India 1134.4 1658.3 +523.9Pakistan 158.1 292.2 +134.1

Indian subcontinent +776.9

PR China 1313.0 1408.8 +95.8

Can the SDT spread to non-western populations ?

• Overall answer : spread of SDT already occurring in other societies, but not necessarily according to a western sequence.

• Lowest-Low fertility in Japan, S. Korea, Singapore, Hong Kong, now also caused by massive postponement..

• Sub-replacement fertility in Caribbean area (from Cuba to Trinidad ), in 2 Indian states and several Indian metropolitan areas, and even in several Muslim populations (Tunisia, Iran). Sub-replacement fertility widespread in most Chinese provinces.

• Take off of premarital cohabitation documented in Japan and Taiwan.• In Japan, Korea, Singapore : postponement of parenthood equally linked to

expressive and individualistic value orientations at the micro level ( but not or less strongly to religion/secularism).

• But : many of these societies have no experience with multi-culturalism (e.g Japan, S. Korea versus Singapore)

Number of items with effects on postponement of parenthood in

World Values Studies, Women aged 18-45.

expected direction (net effects after controls for age, education, job status)

Japan South Korea Singapore

1995, 2000 1994, 2001 2002

a.Family and gender items

15 of 16

15 of 16

13 of 16

b.Socialization traits 7 of 9 9 of 9 7 of 9

c.Work characteristics 5 of 5 na9 of 10

d.Political orientations19 of 20

17 of 19 7 of 9

e. Ethics and morality issues 8 of 10 7 of 9 9 of 9

d.Religion 4 of 10 2 of 3 8of 10

Total58 of 70

50 of 56

53 of 63

total % 82.9 89.384.10

%

Postponmt + weak or no recuperation

Postponement + stronger recuperation

Less postponement but quantum drop