Ageing paranoia: its fictional basis and all too real costs Jane O’Sullivan Fenner Conference 2013...
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Ageing paranoia: its fictional basis and all too real costs Jane O’Sullivan Fenner Conference 2013 – Population, Resources and Climate Change. AAS 10-11
Ageing paranoia: its fictional basis and all too real costs
Jane OSullivan Fenner Conference 2013 Population, Resources and
Climate Change. AAS 10-11 October 2013
Slide 2
Ageing is the main excuse for maintaining population growth
Population growth is a policy variable (a choice). A significant
shift in policy in the past 20 years: High fertility nations have
reduced family planning. Low fertility nations have resisted
stabilisation. A consequent resurgence in global population growth.
Global population wont peak unless nations embrace stabilisation or
descent.
Slide 3
2012 UN Population Projections
Slide 4
High 15.8 16.6 billion Medium 10.1 10.9 billion Low 6.1 6.8
billion 2012 UN Population Projections
Slide 5
High 15.8 16.6 billion Medium 10.1 10.9 billion Low 6.1 6.8
billion 2012 UN Population Projections Constant Fertility 28.6
billion
Slide 6
High 15.8 16.6 billion Medium 10.1 10.9 billion Low 6.1 6.8
billion Projections are blind to carrying capacity Resource
Constraints? Joel Cohen How Many People can the Earth Support: 7-12
billion is the zone If most people would prefer a decline in birth
rates to a rise in death rates, then they should take actions to
support a decline in fertility while time remains to realize that
choice.
Slide 7
Annual Increment of Population Medium Projection Constant
Fertility Projection Recent estimates from Population Reference
Bureau
Slide 8
Press briefing upon publication of UNs World Population
Prospects: The 2012 Revision Most of this increase is due to
changes in our estimates of current fertility for several
high-fertility countries Our medium-variant projection continues to
assume a rapid fall in future levels of fertility for these
countries. We continue to calibrate the pace of future fertility
decline using the historical experience of countries that underwent
a major reduction of fertility levels after 1950, in an era of
modern contraception. The mediumvariant projection is thus an
expression of what should be possible [it] could require additional
substantial efforts to make it possible. John Wilmoth, Head of
Population Division, UNDESA
Slide 9
Fertility reduction in response to population-focused family
planning programs Typical fertility reduction of 2-3 units per
decade in the first two decades. (UN projection assumes 1 unit per
decade.)
Slide 10
UN Survey of Population Policy 2011
Slide 11
International support for family planning has fallen Allocation
of international funding for Population Assistance from S.W.
Sinding 2009. Population Poverty and Economic Development. Phil.
Trans. R. Soc. B 2009 364, 3023-3030.
Slide 12
Fertility rebound in developed countries from: Myrskyla et al.
2009 Advances in development reverse fertility declines
Slide 13
Ageing is an inevitability of the demographic transition from:
Productivity Commission 2005: Economic Implications of an Ageing
Australia
Slide 14
Population growth only partly delays ageing % over 65 Aged
dependency: >65 / 15-65 Dependency Ratio: ( 65) / 15-65 Real
dependency ratio?: ( 70) / 20-70 TFR=2, NOM=0 TFR=2,
NOM=220,000
Slide 15
The 3 Ps: GDP = Population x Participation x Productivity
Assumptions: Natural resources dont count. Diluting, degrading and
depleting them will not affect per capita wealth, because they are
not in the model. Job seekers create jobs. The size of the economy
will be proportional to the number of working age people. The 3
factors are independent. Population growth will not reduce
participation (competition for jobs) or productivity (competition
for resources and markets). Growth rate costs nothing. The
infrastructure, equipment and professional personnel that added
people need will be created without penalty.
Slide 16
Self-affirming factorisation: The Kaya formula for global
emissions is another example: Emissions = Population x GDP/person x
Energy Intensity of $ x Carbon intensity of energy
Slide 17
The first P: Population - but wealth is a per capita thing! Did
population growth help Australia avoid the GFC? Negative per capita
growth for >4 quarters made deeper by population growth.
Population growth delinks GDP from wealth.
Slide 18
So, does population growth increase participation or
productivity? The ageing argument: keep the proportion of working
age people high. Productivity Commission 2011 Plausible increases
in fertility and net migration would have little impact on ageing
trends. any effect would be short lived. This is because immigrants
themselves age to maintain the age structure of 2003-04 in 2044-45,
annual migration during that period would need to be above 3 per
cent of Australias population, leading to a population of over 100
million by the middle of this century Sustainable Australia Report
2013: every 50,000 new migrants have roughly half the impact on
ageing trends than the previous 50,000.
Slide 19
Models show ageing will reduce participation The unemployed are
unlikely to take up the slack because: Unemployed people and people
outside the labour force are generally different from the employed
in skill, motivation and aptitude. Productivity Commission (2005)
Economic Implications of an ageing Australia
Slide 20
The real world experiment Is the proportion of people employed
governed by the supply of people of working age, or by the supply
of work? There is no correlation between ageing and proportion of
people employed.
Slide 21
The real world experiment Is the proportion of people employed
governed by the supply of people of working age, or by the supply
of work? The differences are even smaller when part-time work is
considered.
Slide 22
The real world experiment Does population growth increase
productivity? There is no trend among nations, nor among
municipalities (USA).
Slide 23
Are we measuring productivity decline as GDP growth? Density
diseconomies: Infrastructure Australia (2011) The cost of providing
new infrastructure is rising faster than the rate of inflation in
part, because costlier construction options, such as tunnelling for
new roads, now need to be adopted in the large cities.
Unremunerated costs of labour: Grattan Institute (2013): on the
perimeters of Brisbane, Sydney, Melbourne and Perth, more than 90
per cent of jobs are at least an hour away on public transport.
Residential housing debt tripled since 2003.
Slide 24
What about wealth distribution? Does a growing workforce create
more opportunities for the needy? The most youthful nations have
the poorest poor. Because immigration makes labour more abundant
relative to the existing stock of capital and land, it tends to
increase the returns to the latter at the expense of labour.
Productivity Commission 2011
Slide 25
What about wealth distribution? The GINI coefficient measures
inequality of income: Greater inequality is associated with worse
physical health, mental health, drug abuse, education,
imprisonment, obesity, social mobility, trust and community life,
violence, teenage pregnancies, and child well-being (Wilkinson
& Pickett, The Spirit Level 2009)
Slide 26
What about Pensions and Health Care Costs? If the labour market
is oversupplied, pensions only replace unemployment and disability
benefits. Raising the pension age by 3-5 years negates change in
working age proportion. but is not needed if labour supply holds
up. The worst trends for retirement funding are housing inflation
and casualised work. a generational time-bomb imposed by population
growth.
Slide 27
Can population growth offset Health Care Costs? Most increase
in health costs is due to changing treatment technologies and
expectations. Cost is related more to proximity to death than to
age. Proportion of adults with