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SIMULATING THE EFFECT OF DEMOGRAPHIC EVENTS ON THE HOUSEHOLD COMPOSITIONAuthor(s): Keith Spicer, Ian Diamond and Maire Ni BhrolchainSource: Journal of the Australian Population Association, Vol. 9, No. 2 (November 1992), pp.173-184Published by: SpringerStable URL: http://www.jstor.org/stable/41110620 .

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Vol.9, No.2, 1992 Journal of the Australian Population Association

SIMULATING THE EFFECT OF DEMOGRAPHIC EVENTS ON THE HOUSEHOLD COMPOSITION*

Keith Spicer, Ian Diamond and Maire Ni Bhrolchain Department of Social Statistics University of Southampton

Southampton S09 5NH, England

The aim of this paper is to measure the effects on household composition of changes in demographic events, e.g. mortality, fertility, marriage, divorce. British household data are taken from the General Household Survey and aged by simulation to 2001 using a 'Most Likely* model. Subsequently different assumptions of each demographic event are taken from 1991 so that the effects of perturbations within each event can be studied. Special features of the simulation model are the differentiations between cohabitation and marriage and separation and divorce, and the detailed breakdowns of household types such as lone parents into single and previously married women and men with children aged 0-4, 5-15 and 16 and over.

Introduction The most commonly used method for projecting the number and type of

households is the headship rate method For example, Bell (1992) reports that in Australia, there are a number of different household projections at both national and subnational levels, the majority of which use a headship rate. The Australian Bureau of Statistics publishes population projections at national and state level but has not published projections for the numbers of households and the number of persons residing in households (Ironmonger and Lloyd-Smith 1990). United Nations (1973) provides full descriptions of the most common household projection methods.

A headship rate is the proportion of people in a certain subpopulation who are heads of households, thus the headship rate for single males aged 20-24 is 0.4 if 40 per cent of such males are heads of households. In the forecasting and projection of these rates, groups are normally distinguished by age, sex and marital status. The usual procedure (Rees 1986) is to forecast future marital behaviour within the groups: the proportion of single males aged 20- 24 that will marry in the next five years or the proportion of married males that will divorce in that time. In essence one is finding probabilities of individuals making a transition from one status to another. In conjunction with an independent population projection over the same period, projected headship rates are then used to project the number of household heads and hence the number of households.

Material from the General Household Survey was made available through the Office of Population Censuses and Surveys and the ESRC Data Archive has been used by permission of the Controller of H.M. Stationery Office.

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Despite their widespread use, headship rates have a number of disadvantages. Murphy (1986) pointed out that a great drawback is that demographic and socioeconomic characteristics of the other members of the household are completely ignored and that, anyway, the choice of a head within the household is crucial as regards the output household composition. Bell and Cooper (1990) reported that the output displayed by the headship rate methods is often confined to the total number of households and the age- sex distribution of heads. Often other assumptions, such as the household distribution (by type) of single males aged 20-24, for example, have to be made to project the household composition with sufficient information for planning purposes. Indeed, as Murphy, Sullivan and Brown (1989) stated, the headship rate approach describes a state rather than modelling a process.

Moreover, the crucial drawback is that it is difficult to incorporate demographic period effects into the headship rate approach. For example, if marriage rates decrease by five per cent and divorce rates increase by five per cent at certain ages, how does one transfer those assumptions into headship assumptions?

Household Simulation

Studying the effect of demographic factors on the household composition is therefore not trivial. Simulation at the individual level can handle all demographic events by taking each household, one at a time, simulating each possible event (using a Monte Carlo method) for each individual within each household for each year over a number of years. Our methodology is similar to that of Brass (1983), taking a 'marker' individual as the head of the household. The marker is taken as the senior woman, that is the oldest married woman or, if there is none, the oldest non-married woman or, if there are no adult women, the oldest man. The marker can only leave the household by death or abdication: the latter only applies to the case of a man, who abdicates when he enters a relationship with a woman and is deemed to be 'owned1 by another marker. If any other members leave the household, they are kept in the simulation in their new household, although in the case of a man, he dis- appears when he enters a relationship. There is thus a balance in the number of men, since we introduce men as relationships commence, though there may be small discrepancies introduced in some demographic attributes such as the age distribution of men. Women who form new households become new markers.

Special consideration in our simulation is given to the marriage process. We use an 'open population* model in that when a woman marries, or cohabits, her partner's age and marital status are simulated, thereby ensuring that there is always a partner available for her to form a relationship with. Alternative models in the past, notably Galler (1988) and Hammel et al. (1976), have attempted to use a 'closed population', searching for the most suitable partners in the other households; but there are immense problems in determining a 'scoring system' for prospective partners, and forming the methodology for when no suitable partners are available.

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We also split the marriage process itself into two parts: cohabitation and marriage. Since cohabitation is now widespread1 we must incorporate it into our simulation. The average length of the cohabitation period is just under two years for first marriage and three years for second marriage (GHS data, various years) so we must adjust our marriage rates to account for cohabiting unions two and three years earlier. In addition, many such unions do not end in marriage. Bumpass and Sweet (1989) estimate this is so for around 40 per cent involving single women in the United States. Spicer (1992) showed that British cohabitation behaviour is very similar, using data taken from Haskey and Kiernan (1989) by comparing lengths of current cohabitations and also the length of time prior to marriage spent in a cohabiting union. The US Cohabitation Life Table (shown in Table 1) is therefore used for British cohabiting unions in our simulation.

We have no similar information for previously married women but the proportion of non-marrying unions is probably lower, say around 25 per cent. The problem is similar to that for single women but we have to make some assumptions since many women are ineligible to marry through being separated and not divorced. We assume that separated women who are cohabiting at the time of divorce have cohabited, on average, for half the period of separation; and that about one half of all divorced women who ever cohabit as divorced are cohabiting at the time of divorce. These assumptions tie in with GHS data that 20-25 per cent of separated women are cohabiting. Our life table is formed in Table 2.

Table 1 Cohabitation life table (single women)

No. of years Split Marry Still cohabiting

0 0 0 100 0-1 12 26 62 1-2 10 16 36 2-3 6 7 23 3-4 4 4 15 4-5 3 3 9 5-10 5 3 1

10+ 0 1 0

Table 2 Cohabitation life table (previously married women)

No. of years Split Marry Still cohabiting

0 0 0 100 0-1 9 21 70 1-2 9 17 44 2-3 5 13 26 3-4 1 11 14

4+ 1 13 0

1 Nearly half of all first marriages are preceded by cohabitation as are over two-thirds of later marriages in Great Britain (GHS 1986-1989 data).

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We must also differentiate between separation and divorce. Murphy (1984) estimated that around 13 per cent of British women who separate never divorce; Bloom et al. (1975) estimated ten per cent in the US. Therefore we must correct the divorce rates by two years, the approximate average length of time between separation and divorce (GHS data), to give separation rates and also by a factor of 100/87 to account for those not divorcing. We can then use the distribution of time from separation to divorce to model divorce as a separate event

The third special feature in our simulation is the treatment of ex-nuptial fertility. Using Bachrach's (1987) model II, incorporating age and parity, we can approximately estimate fertility for single cohabiting, single non- cohabiting, previously married cohabiting and previously married non- cohabiting women. Because Bachrach (1987) did not specifically give fertility rates but the probability of women (in given marital statuses at the start of the period) giving birth within the following five years, we must first correct her probabilities to one-year birth probabilities and then correct to the vital registration rates for overall ex-nuptial fertility.

Each individual in each household is thus exposed to each possible event in turn, though some events are clearly not applicable to some individuals, e.g. a male giving birth, a non-married woman divorcing, a married woman marrying. Individuals can be subject to leaving the parental home, giving birth, moving into a relationship (either cohabitation or marriage), leaving cohabitation (either to a marriage or splitting), separating (if married), divorcing (if separated), going to an institution or dying. Other events involve 'introducing' a new member into the population, for example gaining an elderly relative. These events are simulated using characteristics of the marker and other data. For the example of gaining an elderly relative, and institutionalization, information is taken from the work of Grundy (1986, 1989) using Longitudinal Study data. The Longitudinal Study (LS) links one per cent of the population through the comparison of two successive censuses, in these cases, 1971 and 1981, to monitor individual change.

The General Household Survey The General Household Survey (GHS) is a continuous British voluntary

household survey covering about 12,000 households a year. Interviewing takes place throughout the year and results are published annually. The topics covered include household composition, marriage and fertility history as well as occupation, education and contraception. Response has been fairly consistent in the 1970s and 1980s at around 80 per cent, though for the contraception section this is slightly lower.

For the actual simulation, we have taken a sample of 10,000 households from the 1971 General Household Survey, split into ten smaller samples each of 1,000 households. The data quality was remarkably good with only 70 households in total needing any manipulation. Over half of these were due to marriage data being given but the date of marriage left blank. On these occasions, the couples were deemed to be cohabiting as suggested in the codebook. The majority of the other households needing manipulation had the

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age of one member missing. In these cases the missing age was estimated using the ages and relationships of the other members.

The age-sex structures of our sample and the 1971 Census were similar but only after correcting for non-response by household size using the rates given in Barnes and Birch (1975) and then correcting by age. The distributions of household size and type were then deemed to be similar enough to those given in the census to continue the analysis.

Calibration After running each of our ten samples five times (a total initial sample of

50,000 households) the results we obtain for 1981 are shown in Table 3, the household type distribution for 1981. Although it could be argued that no one type of household is very closely in agreement in terms of the percentage distributions exhibited by the simulation and the census, it could also be argued that no one type is particularly inaccurately measured. Two additional independent repetitions of the simulation (each of the ten samples run five times in each case) using different random number seeds also led to no error being greater than 1.1 per cent of all households in any instance.

As regards more up-to-date comparisons, we can compare our simulated distribution to that from the 1987 GHS. However, the General Household Survey data do not account for non-response errors so we must instead study the changes in the GHS between 1981 and 1987 and compare these with the changes in the simulation distribution over the same period. Table 4 shows that the shifts in the distribution from 1981 to 1987 are similar to a degree of one per cent and this must be adequate since we only have integer percentages given in the GHS.

Table 3 Comparison of 1981 Census and simulation household distributions (percentages)

Household type 1981 simulation 1981 Census Error

1 Adult 16-59 7.3 7.0 +0.3 2 Adults 16-59 15.2 15.7 -0.5 Youngest person 0-15 34.1 33.4 +0.7 3+ Adults 12.6 13.6 -0.9 2 Adults, 1/2 60+ 15.6 15.4 +0.2 1 Adult 60+ 15^2 14^ +0.2

Table 4 Comparison of 1987 household distributions

Household type Simulation GHS % Changes 1981 1987 1981 1987 Sim. GHS

1 Adult 16-59 7.3 8.7 7 8 +1.4 +1 2 Adults 16-59 15.2 16.5 13 14 +1.3 +1 Youngest person 0-15 34.1 30.7 35 31 -3.4 -4 3+ Adults 12.6 13.5 13 14 +0.9 +1 2 Adults, 1/2 60+ 15.6 14.7 17 17 -0.9 0 1 Adult 60+ 15.2 16.0 15 16 +0.8 +1

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Table S Cohabiting and single-parent households: comparison of simulation and GHS percentages.

1981 1987 Household type Simulation GHS Simulation GHS

2 cohabiting adults, with/without children:

Singlewoman 1.5 1.2 1.9 2.3 Prev. married woman 0.8 1.0 0.9 1.2

Single parent + dep. children 3.7 4 4.3 4 Single parent + ind. children 3.9 4 4.2 4

(includes single fathers)

Some data manipulation was necessary to ensure that the two distributions matched correctly. In particular, the assumption that leaving home without cohabitation or marriage decreased for younger ages (under 25) between 1981 and 1991 but increased for older ages (over 30) ensured that the requisite percentages were found. Penhale (1989) has shown that the leaving home process is occurring at later ages. The comparisons for cohabiting couples and single parents are given in Table 5, also showing a fair agreement for both 1981 and 1987 between our simulation and percentages derived from the GHS.

In addition, the percentage of married-couple households dropped from 63.4 to 58.0 per cent between 1981 and 1987 in our simulation. Department of Environment (DOE) estimates for the corresponding years are 63.4 and 58.6 per cent. The average household sizes from our simulation and from DOE estimates match precisely at 2.67 in 1981 with a decline to 2.59 in our simulation compared to 2.55 in DOE estimates.

Assumptions for 1991-2001 In order to project on to 2001 we have to make some assumptions

regarding demographic behaviour in Great Britain. These are listed below. • Ten per cent decrease in all mortality from 1 99 1 to 200 1 . • Increases in marital breakdown slow: half the annual percentage increases

over 1977-87 by age at marriage and duration. • Increases in nonmarital fertility slow: smooth curves fitted for each

age/marital status specific probability. • Constant marital fertility by age. • Institutionalization rates and the elderly 'going home' rates halved because

of better health and longevity. • Small decreases in the proportion of cohabitations ending in marriage to 50 per cent for first marriage and 70 per cent for later marriage.

• Increases in the proportion of marriages preceded by cohabitation to 60 per cent for first marriage and 90 per cent for later marriage.

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• Marriage rates projected by smooth trends: decreases of up to five per cent for females and males aged 16-19, smaller decreases up to age 30, small rises of one to four per cent for older ages. The ensuing household distribution is given in Table 6. It should also be

noted that the actual number of households, which is simultaneously simulated, changed by around ten per cent between 1981 and 1991 and by around six per cent between 1991 and 2001, closely in agreement with DOE estimates and projections of nine per cent and six per cent

Table 6 Household composition 198 1-2001

1981 1987 1991 1996 2001

1 Adult 16-59 7.3 8.7 9.3 10.1 10.6 2 Adults 16-59 15.2 16.5 17.1 17.9 17.9 Youngest 0-15 34.1 30.7 29.0 29.0 28.6 3+ Adults 12.6 13.5 14.7 13.4 13.1 2 Adults 1/2 60+ 15.6 14.7 13.8 13.3 13.3 1 Adult 60+ 15.2 16.0 16.2 16.3 16.6

Married-couple households 63.4 58.0 54.7 50.9 49.5 Single-parent households 7.6 8.5 8.7 10.1 10.1 Cohabiting households 2.3 2.7 2.9 3.8 4.1 One-person households 22.4 24.0 25.6 26.4 27.2 2+ families households 0.9 1.2 1.7 2.3 2.6 Other households 3.6 5.5 6.3 6.6 6.5

Average household size 2.67 2.59 2.55 2.48 2.43

The Effect of Demographic Factors on the Household Composition

We will now look at the different household types and identify the events which have the most effect on the numbers and proportion of households of that type. To do this we rerun our simulation model a number of times, each run incorporating different assumptions for the period 1991-2001. For example, one simulation scenario incorporates an additional ten per cent reduction in all mortality rates, another incorporates no increase in ex-nuptial fertility after 1991. In all, 26 alternative scenarios were used.

Married-couple households We predict that, by 2001, we will see under half of households being

'married-couple' households (around 49.5 per cent). A small additional percentage of households within the '2+ Families' households will contain one or more married couples but these are kept within the latter type.

The results of our scenarios are perhaps self-evident. Fewer and shorter periods of cohabitation, higher marriage rates and a greater amount of divorce after separation will lead to more married-couple households. However, even if we keep cohabitation and marriage at the 1991 levels for the period 1991- 2001, so promising more married-couple households, we still see only just over 52 per cent as opposed to almost 55 per cent in 1991. Our baseline

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model gives rise to under 50 per cent of all households being married-couple households. Changes in the general level of marital breakdown will lead to small changes in the proportion of married-couple households but only of the level of 0.5 per cent of all households (in the case of a cessation of the growth in marital breakdown) owing to the general trend to later marriage.

We may see a switch in balance of those married couples with dependent, independent and no children. Later leaving home would lead to more 4married couple with independent children' households while the 'mairied couple only* households would gain through earlier leaving home and higher levels of divorce after separation.

Single-parent households The increase in the proportion of single-parent households may slow to

just over ten per cent of all households by 200 1. Two events make massive differences to the proportion of single-parent households: cohabitation and nonmarital fertility.

If the proportions of marriages preceded by cohabitation were to be kept constant at 40 per cent (first marriage) and 80 per cent (second or later marriage) rather than increasing to 60 per cent and 90 per cent, we would see 14 per cent fewer (p<.01) single mothers with children aged 0-4. The length of cohabitation would have some effect in that women can become single mothers more quickly under shorter cohabitation lengths but the main effect on single parents occurs through changing the proportions in the outcome of cohabitation. More marriages (say halving the chance of splitting) would lead to the proportion of single parents only being 9.3 per cent (p<.001) yet doubling the chance of splitting would lead to an increase to 11.2 per cent (p<.05).

If the rise in ex-nuptial fertility is halted in 1991, the rise in the proportion of single-parent households would also be slowed considerably so that, by 2001, we would see just 9.3 per cent (p<.001) of households being single- parent households.

There is some effect under changing assumptions of separation and divorce on the percentage of single-parent households. However-, the effects are not as large as those seen regarding changes in cohabitation and ex-nuptial fertility and we see only a marginally significant reduction to 9.8 per cent (p<.05) under even a complete cessation in the rise in marital breakdown.

Cohabiting households We predict about 4.1 per cent of all households to be 'Cohabiting Woman

+ Other(s)' households with this proportion probably not exceeding five per cent. Higher cohabitation rates and longer periods of cohabitation had clear effects in producing a higher percentage of cohabiting households although the latter produce merely a cross-sectional effect An interesting result is that a greater proportion of 'splits' in the cohabitation outcome made a positive difference to the number of cohabiting households with more women 'available' for further relationships. Among previously married women, lower separation and divorce rates clearly led to fewer cohabiting households.

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One-person households The proportion of one-person households under our baseline model was

somewhat lower than in other projections for 2001: the DOE projections give a figure of around 30 per cent as opposed to our figure of around 27 per cent The DOE projections use headship rates which immediately throw doubt on their accuracy. It is probable that we will see a proportion somewhere between 26 and 30 per cent

The greatest effects on the proportion of one-person households are seen among the elderly with the most important events being 'going home' and institutionalization. Owing to better health in old age, the age-specific rates for the above two events could fall sharply, leading to more one-person households. Mortality had little effect, mainly because, although many otherwise defunct households would be saved by further decreases in mortality, many otherwise one-person households would be converted to two-person households so negating the effect of mortality on one-person households.

Two-or-more-families households A family consists of one of the following: a married couple, a cohabiting

couple, or a single parent with a dependent child. It is therefore possible for there to be households with two (or more) families, for instance, a married couple with a daughter and her child. The proportion of '2+ Families' households almost doubled over the 1991-2001 period but still accounts for under three per cent of all households. The increase in ex-nuptial fertility rates over that period is a significant effect and there are also suggestions that the levels of leaving home are important, too. However, the overall proportion of '2+ Families' households is unlikely to stray outside the two to three per cent range under any scenario.

The lone elderly: one adult 60+ Lone elderly households constitute 16.6 per cent of all households under

our baseline model in 2001; this represents a considerable slowing from the sharp increases seen in the 1975-1985 period. No significant deviations are seen except under changing assumptions of "going home' and insti tution- alization. To halve either would entail an increase in the 41 Adult 60+' household percentage to about 17 per cent. However, assumptions on both the above events are difficult to predict owing to the general lack of data. Grundy (1986, 1989) has produced figures for 1971-81 from the Longi- tudinal Study which can be transformed into transition probabilities, but their accuracy is uncertain.

Elderly couples: two adults, one or both 60+

Any additional decreases in mortality above the ten per cent assumed in our baseline model will cause more *2 Adults, 1/2 60+' households to be formed; reducing mortality by a further ten per cent will lead to the overall proportion being 13.9 per cent instead of 13.3 per cent. It seems therefore that in future years after 2001, we are likely to see a reverse in the downward trend that we

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have seen since 1971. Since mortality will probably fall,2 we may see more elderly couples surviving to old age.

Youngest 0-/5 households The proportion of households with children will be significantly altered

only by changes in nonmarital fertility since married women are far more likely to have children already. Even so we will see a drop in the proportion of households with children to under 29 per cent although if ex-nuptial fertility continues to increase then we may see the proportion of these households rise again in the next century.

Two adults, 16-59 Earlier leaving home (without marriage or cohabitation) and a slowing in

ex-nuptial fertility would make significant differences to the proportion of 42 Adults 16-59' households, which stands at about 18 per cent under our baseline model. Higher marriage rates would obviously also cause this proportion to rise but the effect is not as large as might be expected: a return to the higher marriage rates of 1981 would still only see 18.2 per cent of all households containing two adults aged under 60.

One adult 16-59 The slow rise in one-young-adult households will continue to about 10.6

per cent of all households by 2001. The rise will not be entirely reversed by any realistic scenario although most of the demographic events do have small effects. A greater emphasis on cohabitation rather than marriage, along with higher separation rates from cohabitation, will have the largest positive effect A slowing of the rise in ex-nuptial fertility, which looks likely, and earlier leaving home, which is not so likely, would have similar consequences.

Summary and Discussion Because of the complexity of household behaviour, future household

patterns are uncertain, but it is apparent that the future numberand type of households are of paramount importance. Particular types of household require particular attention; for example, an excess of lone elderly households may necessitate widespread specialist services such as those provided by 'home help'.

The majority of projection techniques incorporate information on the household head, typically in the form of headship rates. A headship rate is the proportion of a subsection of the population who are heads. Despite the widespread use of household heads, the results of those methods depend heavily on the actual choice of the head in a household. Furthermore, headship rates do not capture the true nature of household events such as marriage, divorce or leaving home. It is thus advantageous to study households individually

2 Although Day (1991) has pointed out that this is largely dependent on ecological factors which may become more important in the next century.

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rather than as one complete body of many households, that is, to take each household and expose it to demographic behaviour. We do this by microsimulation, for each household taking each event in turn and determining whether or not the event occurs by random number generation. Thus it is possible to accommodate a multitude of demographic events to assess the consequence of changes in transition probabilities and to make the process quite complex while being able to study any one household type in detail.

The number of households will increase by an estimated 5.5 per cent between 1991 and 2001, although the extent of the increase may be between four and seven per cent. Average household size is likely to decrease to around 2.43 by 2001.

The proportion of married-couple households will fall to just under a half. It is also possible that we will see a shift towards married-couple-only households rather than with dependent or independent children although the evidence for such an effect is not convincing. The effect is provoked, in the simulation, by later marriage but, in reality, the marital fertility rates may correct themselves by increasing among the newly-married older women.

Increases in the proportions of cohabiting and single-parent households will be seen in the 1990s, mostly due to single women in both cases. Single parents will probably account for more than ten per cent of all households and cohabiting households around four per cent; higher levels of cohabitation and ex-nuptial fertility would provoke an even higher proportion of single-parent households. The growth in one-person households is less certain but will be over a quarter, probably about 27 per cent of all households by 2001. The proportion of lone elderly households will not rise substantially in the 1990s but will still increase slowly to well over 16, and possibly 18 per cent of all households. It is certain that the increase will accelerate in the latter half of the first decade of the 21st century owing to the larger cohorts reaching the age of 60 in those years. Greater increases will be seen if 'going home* and institutionalization rates decrease but a decrease in mortality will actually increase the two-elderly-persons households much more than those of the lone elderly.

An overriding finding of the sensitivity analysis was that realistic deviations in the probabilities of any event do not alter the overall trend of any household type, only accelerate or decelerate that trend, at least in a short period of time, such as ten years. For instance, the absolute percentage of married-couple households fell between 1991 and 2001 under aU scenarios by at least two per cent, even under quite extreme marriage and divorce assumptions. Further increases in single-parent households are largely dependent on increases in cohabitation and nonmarital fertility while the behaviour of elderly people is critical in determining the proportion of one- person households. In general, though, the age-sex structure of the population is the most important factor in household composition, at least in the short term.

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