AN OVERVIEW OF DEMOGRAPHY IN THE

BUSINESS SECTOR IN THE PURSUIT

NATIONAL INTERESTS

Diego Iturralde – Statistics SA

Structure

• Demography and business

• Demographic dividend

• Current demographic trends

Demography and business

• Ever since 1798 when Malthus had his apocalyptic vision of overcrowding and starvation due to overpopulation debate has raged around population growth and development

• In the 1960s and 1970s neo-Malthusians view that high fertility hindered development. In the 1980s economist refuted this view indicating that human capital and technology were the drivers of growth

• Issues such as diversity of the population, ageing, changing dependency ratios are contributing to this debate

• The question at hand is whether the world is moving towards a state of convergence of lower fertility, changed age structures, ageing and reduced dependency or whether there will be region which diverge

• In Africa only about 22% live in countries with TFR of less than 4. This means that it is projected that Africa’s population will increase from 1-2.7 billion by 2050 which equates to an increase from 10% to 25% of the global population. From having only 3 cities of over 5 million inhabitants this category will now have 35 cities.

• Children 0-14 will increase from 411m to 839m and young adults (15-24) from 200m to 450m. It is estimated only 25% of men and 10% women will manage to get jobs by age 30. Focus needs to be on SRHR and access to modern contraceptive in countries where this is lacking.

• Rise and fall of size of labour market has an impact on GDP growth as well as productivity growth

• Countries maximising the dividend have challenges in absorbing women into labour market and the rise in the elderly is something that necessitates planning in terms of welfare, health care and labour market participation

• Emigration and proper management of migration need attention too but the impact of remittances can not be discounted

• Whilst many countries in central Europe and far East Asia show declines in their population by 2050, most of the global population growth is coming sub-Saharan Africa and the Indian sub-continent

• Declining mortality is responsible for increasing life expectancy and for population growth over the past 100 years. This was due to improved immunisation as well as general improvement in health. In this regard it is developed countries that show evidence of higher life expectancy

• By the same token decline in fertility has resulted in reduced infant mortality and in leading many developed countries to below replacement fertility. These two processes have resulted in ageing. Largest increase in median age will result in emerging market countries between now and 2050

• South Africa’s youth will decline from 28% to 21%, working age persons will remain stable from 66% to 67% but the elderly will increase from 6% to 13% in the period between 2017 and 2050

• There is a strong relationship between long term economic growth and working age population as will be evidenced by demographic dividend. There is a secondary benefit to this in terms of productivity growth through the second demographic dividend

• Future population growth as well as future decline in dependency will emanate from Sub-Saharan Africa and these must be harnessed through correct investments and prioritisation of resources.

Demographic Dividend

• Despite sustained growth in sub-Saharan Africa, two thirds of this region lives on less than $2 a day

• Accelerated growth is required in order to make a profound change to the region

• The experience in Asia and Latin America characterised by a drop in fertility which led to decreased youth dependency rates

• These countries reacted to this by investing in health, education, enacting economic policies that created sustainable jobs and which led to the accelerated growth known as the Demographic Dividend

• The model by Bloom et al indicates that in order to benefit from the dividend:

• Countries must experience demographic change

• Improve people’s health

• Invest in education

• Implementing economic and governance policies

Demographic Change

• The first requirement for the dividend to take place is to lower fertility and mortality rates and create an age structure with reduced dependency

• This was achieved by promoting family planning, birth spacing

• Child survival would lead to smaller families

• Girls education leads to postponement of marriage and childbearing

Health and Education

• Investment in health and education are key for developing a skilled and healthy labour force

• Promoting health allows children to perform better at school and to eventually contribute more productively to the labour force

• Reproductive health services and health seeking behaviour to combat non-communicable diseases need to be promoted

• Education enables people to become more skilled and to access high quality jobs which promote economic development

• UNICEF recently claimed that each extra year of education equates to 10% increase in personal income

Job Creation

• Africa’s challenge is that due to its young population it needs to create jobs at a similar rate to which the labour force is growing.

• In order to do this the working age group (15-64) needs to be larger than either the youth (0-14) or the aged (65+)

• Identify sectors of the economy that will drive economic growth

• Ensure that skilled workers are available to fill key jobs in these sectors

• Promote pro-growth economic policies as well as promoting traditionally male dominated careers to women

• A balance must be reached between economic growth and an environment that enables job creation

Governance

• It is critical that for all these investments to result in the benefits of the demographic dividend sound governance principles must be applied so that the impact of inflation, political instability and corruption to name a few, do not erode the gains made

A demographic dividend must be earned through investments in education, health of the youth, infrastructure in roads, power and

water, political stability, fighting corruption as well as labour market policy reforms

Beyond the dividend

• An emerging concept is that of the second demographic dividend and this applies to a case where all the conditions of the first dividend have been met which encourages people to accumulate more personal wealth

• Since people live longer they are able to accumulate more wealth to support themselves in old age.

• Research by Lee and Mason (2006) shows that in such cases people will invest more in each of their children and enable more resources to be made available to them which will result in the sustainability of the demographic dividend

Current Demographic Trends from Mid Year Population

Estimates, 2018

• Cohort component method

• Empirical data sources used to inform assumptions

• Census

• Administrative records on births and deaths

• ART treatment data from DoH

• Breakdown to district municipality level and using a ratio method down to Local Municipality level

• Base population of 1985

57,73

Million

South Africa’s population,mid-2018 is

0

0,2

0,4

0,6

0,8

1

1,2

1,4

Age 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79

Mil

lio

ns

Children 0-14 Youth and Adult 15-59

29,5%

Elderly 60+

AROUND 17 MILLION ARE CHILDREN (0-14 YEARS), MAKING UP CLOSE TO A

THIRD OF SA’S TOTAL POPULATION

Population age structure by

single years, 2018

8,5%62,0%

(17,0M) (35,8M) (4,9M)

8,0% 6,0% 4,0% 2,0% 0,0% 2,0% 4,0% 6,0% 8,0%

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80+

COMPARED TO SOUTH AFRICAN AVERAGE, EC HAS A HIGHER PROPORTION OF

CHILDREN AGED 0-14. Men are in higher proportion up to age 65

EC vs SA Age structure by 5

year groups, 2018

SA

EC

MALE FEMALE

8,0% 6,0% 4,0% 2,0% 0,0% 2,0% 4,0% 6,0% 8,0%

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80+

MALE FEMALE

GP vs SA Age structure by 5

year groups, 2018

COMPARED TO THE SOUTH AFRICAN AVERAGE, GP HAS A HIGHER PROPORTION

OF ADULTS AGED 25-39

SA

GP

0%

2%

4%

6%

8%

10%

12%

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Black African

THERE ARE PRONOUNCED DIFFERENCES BETWEEN POPULATION GROUPS IN

SOUTH AFRICA The Black African population structure is more youthfull compared to that of

the White population. Population structures are driven by fertility, mortality and migration.

Age structure by Population

group, 2018

0%

2%

4%

6%

8%

10%

12%

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

Coloured

THERE ARE PRONOUNCED DIFFERENCES BETWEEN POPULATION GROUPS IN

SOUTH AFRICA. Fertility levels are lower amongst Indian/Asians compared to the Coloured

population. Population structures are driven by fertility, mortality and migration.

Age structure by Population

group, 2018

14,72 M

11,38 M

6,62 M

6,52 M

5,80 M

4,52 M

3,98 M

2,95 M

1,23 M

Gauteng

KwaZulu-Natal

Western Cape

Eastern Cape

Limpopo

Mpumalanga

North West

Free State

Northern Cape

MORE THAN HALF THE POPULATION LIVE IN 3 PROVINCES (GAUTENG, KWAZULU-

NATAL AND WESTERN CAPE). GP remains SA’s most populated province.

Mid-year population estimates for

South Africa by province, 2018

1,5

2,2

02

/03

05

/06

08

/09

11

/12

14

/15

17

/18

Growth rate amomgst older adults has fluctuated, peaking in 2012.

2,3

0,3

02

/03

05

/06

08

/09

11

/12

14

/15

17

/18

-0,9

1,4

-1,5

-1

-0,5

0

0,5

1

1,5

2

2,5

3

3,5

1,2

3,2

02

/03

05

/06

08

/09

11

/12

14

/15

17

/18

Growth rate among children has over time increased over time

Growth rate of young adults is on a declining

trend

Elderly Growth rate has shown an upward trend

WHILE COMPRISING A SMALLER PROPORTION OF THE POPULATION, THERE IS INCREASED GROWTH AMONGST THE ELDERLY

Population Growth rate over

time by age group, 2002-2018

0-14 15-24 25-59 60+

2,68

2,40

1,5

1,7

1,9

2,1

2,3

2,5

2,7

2,9

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

THE TOTAL FERTILITY RATE PEAKED IN 2008 AT 2,68 AND IS DECLINING, REACHING

2,40 IN 2018

Total Fertility Rate, 2002-2018

EC LP NW NC MP KZN FS WC GP

2,9 2,9 2,8 2,72,6 2,5 2,4

2,2 2,0

0

0,5

1

1,5

2

2,5

3

3,5

MORE URBANISED PROVINCES OF WC AND GP HAVE LOWER FERTILITY RATES

THAN THE SOUTH AFRICAN AVERAGE OF 2,40

Total Fertility Rate, by Province

SA Average Fertility Rate is 2,4

2002

2003

2004

2005

2006

2007

2008

2009

2010

20

11

2012

2013

2014

2015

2016

2017

2018

Year of death

672 371

522 157

DEATHS PEAK IN 2006, THEREAFTER DECREASING.

Total number of deaths

estimated over time, 2002-2018

Male

61,1

64,2

Female

67,3

40

45

50

55

60

65

70

75

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Life expectancy by sex over

time, 2002-2018

LIFE EXPECTANCY (LE) HAS BEEN INCREASING SINCE 2007 Besides biological

differences, the variance in LE between males and females can also be attributed to a

variety of social and behavioural dynamics.

LE

62

64

65

65

66

66

66

67

55

58

58

59

59

61

60

61

FS

KZN

NW

LP

EC

MP

NC

SA

GP

WC

SA70

72

64

66

THERE IS AN AVERAGE 6 YEAR GAP IN LIFE EXPECTANCY BETWEEN MALES AND

FEMALES IN SA. Free State has significantly lower life expectancy than the SA average

Life Expectancy by province

Males

Females

53,2

Infant Mortality Rate

37,0

36,4

80,1 Under 5 Mortality Rate

46,1 45,0

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Mo

rtal

ity

rate

INFANT AND UNDER-FIVE MORTALITY RATES IN SA CONTINUE TO DECLINE

IMR and U5MR over time,

2002-2018 per 1000 live births

-362174

564879

-400000 -200000 0 200000 400000 600000 800000 1000000

Net Migration (Excluding Outside SA) shows that GP and WC receive the majority of

interprovincial inflows

Net Migration

2016 - 2021

-400000 -200000

EC

LP

KZN

FS

NC

MP

NW

WC

GPGP Gains around half a million interprovincial migrants over a 5 year period

-400000 -200000 0 200000 400000 600000 800000 1000000

NET MIGRATION (INCLUDING OUTSIDE SA) SHOWS GP RECEIVING AROUND 50% OF

ALL INTERNATIONAL MIGRATION INTO SA

Net Migration

2016 - 2021

-323 851

1,05 M

-400000 -200000 0 200000 400000 600000 800000 1000000-400000 -200000

EC

LP

KZN

FS

NC

MP

NW

WC

GP

International Migration adds to net gains of provincial migration to GP, WC and NW and MP

International Migration reverses some losses in population in EC, LP, KZN and FS

GP

WC

NW

KZN

MP

LP

EC

FSNC

GP

EC

MP

NWWC

FSNC

OUTSIDE

SA

LP

KZN

Net Migration 2016-2021 GP as

a destination region

GAUTENG RECEIVED THE HIGHEST NUMBER OF IN-MIGRANTS FOR THE PERIOD

2016 TO 2021 The economic strength of Gauteng influences its attractiveness to migrants

GP

EC

LP

KZN

MP

NW

WC

FSNC

Outside SA

GP

WC

NW

KZN

MP

LP

EC

FSNC

WESTERN CAPE RECEIVED THE SECOND HIGHEST NUMBER OF IN-MIGRANTS FOR

PERIOD 2016 to 2021. Opportunities of employment, study and quality of life play an important role

amongst the push pull factors between EC and WC

Net Migration 2016-2021 WC as

a destination region

Thank You