Presentation prepared on the occasion of the Follow-up seminar of the TRIPL-E DOSE Conference

1. Population Ageing.A brief assessment of its dynamics and consequences.Ronald C. Schoenmaeckers Presentation prepared on the occasion of the Follow-up seminar of the TRIPL-E DOSE Conference Warsaw, 19 June 2007 SVR – Studiedienst Vlaamse Regering (Research Centre Flemish Government)

2. Three parts of this (short) presentation: • The essentials Something to keep in mind • The key issue • The need for an alternative view? SVR

3. “Viewed as a whole the problem of population ageing is no problem at all. It is only the pessimistic way of looking at a great triumph of civilization” Frank Notestein, 1954 Indeed, let us keep in mind that the phenomenon of ‘population ageing’ is directly related to the fact that people live longer… which is nothing, one must concede, but a positive development. Which does not mean that changing age structures – or rapidly changing population numbers for that matter – would not give rise to great concern, economically, socially, politically. SVR

4. Three parts of this (short) presentation: • The essentials Something to keep in mind • The key issue • The need for an alternative view? SVR

5. Changes in the dependency ratio[(0-19) + (65+)] / [20-64] • Shrinking work force (20-64) • Fewer numbers of young people (0-19) • Higher numbers of older people (65+) Indeed, since the second half of the XXth century, all countries experience an increase in the percentages of older people in their population. The intensity and the tempo of the process may differ, but the trend is general. SVR

6. 107 ‘active’ for 100 ‘non-active’ 104 ‘active’ for 100 ‘non-active’ Evolution dependency ratio, 1950-2100 Results simulation exercises: • Changing mort./ constant fertility levels • Changing mortality and fertility levels 0.97 0.94 Unity in diversity. 0.76 0.71 140 ‘active’ for 100 ‘non-active’ 131 ‘active’ for 100 ‘non-active’ SVR

7. Unity: similar values towards 2100. Evolution dependency ratio, 1950-2100 Results simulation exercises: • Changing mort./ constant fertility levels • Changing mortality and fertility levels Diversity: different paths between 1980 and 2050. SVR

8. These assumptions are of course – as is always the case with projections - debatable. In this particular case, it is possible, for instance, that for the EU12, E0 in 2100 is underestimated. Evolution dependency ratio, 1950-2100 Results simulation exercises, assumptions re mortality and fertility 87.5 84.0 Regression in the ’90s, especially for men 64.0 62.6 SVR

9. The most important differences between the two groups of countries are, however, related to the changes in fertility. For the EU15, between 1960 and 1980, fertility dropped by about 22% (from 2.1 to 1.7), whereas for the EU12 countries between 1950 and 2000 fertility dropped by no less than 58% (from 3.0 to 1.3). Evolution dependency ratio, 1950-2100 Results simulation exercises, assumptions re mortality and fertility Let us return to the trajectories in the dependency ratio. SVR

10. Evolution dependency ratio, 1950-2100 Results simulation exercises: • Changing mort./ constant fertility levels • Changing mortality and fertility levels It is clear that by 2100, both groups of countries will have comparable levels in the dependency ratio (experiencing 104-107 ‘active’ persons for 100 ‘non-active’ persons). It should also be clear that by that time, in both groups of countries, the value has become less sensitive to the changes in fertility. This is quite understandable, since in both cases fertility has been kept constant after 2050 (TFR= 1.85). What, by the way, would be the result of assuming a TFR=2.1? This is shown in the next slide. SVR

11. Evolution dependency ratio, 1950-2100 Results simulation exercises: • Changing mort./ constant fertility levels • Changing mortality and fertility levels Finally, assuming an increase of fertility to a TFR=2.1 (the replacement level) will hardly have an impact on the dependency ratio. Note that an increase of the TFR to 2.1 children will lower the percentage of persons aged 65 and more with only a few percentage points – for the EU15 countries from 29% to 28%; and for the EU12 countries from 27% to 26%. SVR

12. Three parts of this (short) presentation: • The essentials Something to keep in mind • The key issue • The need for an alternative view? • With respect to fertility • Increase in workforce • Increase in productivity • Migration • And also: (the need for) Intergenerational solidarity SVR

13. The need for an alternative view? • With respect to fertility • Higher fertility levels are not a ‘remedy’ against the ‘negative’ effects of an older population structure • A TFR=2.1 (as compared to a TFR=1.85) will hardly affect (lower) the percentage of persons 65 and more in society • It should be recognized that mortality – i.e. the increase in life expectancy – is the main ‘motor’ of ‘population ageing (and not fertility) SVR

14. The need for an alternative view? • Increase in the workforce • It has been demonstrated elsewhere that an increase in employment rates (in conjunction with increased productivity) may largely ‘offset’ the shrinking of the number of ‘active’ persons related to ‘population ageing’. • However, unemployment rates remain high in the EU area • One prerequisite would be more women in the workforce. But does this need to be pursued for economic reasons or rather in pursuit for a more egalitarian society? • Another (often suggested) solution is to increase the age at retirement. But studies (eg., DIALOG) show that citizens are rather hostile to this idea. Flexibility could be the key-issue for success, incl. the possibility to combine retirement and part-time work. SVR

15. The need for an alternative view? • Increase in productivity • Life-long learning is being promoted in this respect. But are citizens ready for it? Studies indicate (cf. Workshop 5) that citizens do not support the idea without proper incentives. Also, a majority of citizens appear to prioritize the learning of foreign languages – rather than increasing competencies in, for example, entrepreneurship or ICT. • On the other hand, to the extent that the much needed higher productivity is related to improved technology, there is a clear need for better education. • However, should this be done with the sole purpose of increased productivity – i.e., in order to better match labour market needs and business -, or rather/also with the overall objective of creating a ‘knowledge-based’ society, for the benefit of all? SVR

16. The need for an alternative view? • More migration? • In the long run, international migration is no solution for ‘population ageing’: • also migrants grow old and also those from outside the EU have in the long run small numbers of children • it must be recognized that international migration can only be a ‘remedy’ against declining population numbers (which would then imply a sustained influx of migrants) • ‘Return’ migration might be a workable solution, but only when achieved in close collaboration with the sending countries. • However, migration between member states should be encouraged and being facilitated. SVR

17. The need for an alternative view? • The need for more intergenerational solidarity • In general, citizens regard older people as non-productive for society • The need for more civil education and more insight in demographic processes: • Lack of a ‘life-course’ perspective • Sense of ‘intergenerational solidarity’ appears to increase with age • As was the case for higher productivity, better education would be a key element in achieving more intergenerational solidarity. SVR

18. To conclude • Better education appears to be a key element in preparing for a society with an older population structure. • One should, however, avoid making the mistake to focus on ‘more productivity’ alone – it is of equal importance to take into account the need for more ‘intergenerational solidarity’. SVR

19. Thank you for your attention SVR