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					    Global Demography
  The issue of how many people are in the world
(population), the growth rate of that population, their
 age and geographic distribution is a fundamental
           economic and social question
   The study of these questions is referred to as
To understand the world economy some basic facts
      about world demography are essential
This chart shows the geographic distribution of the world’s
population from 1800 to 2050(estimated)

 Source: United Nations Population Division, Briefing Packet, 1998
 Revision of World Population Prospects.
World population growth over the next 150 years is a developing
country issue
     History: Population growth
• Population change affects all our lives in a much more
  immediate way today than it has throughout most of
  human history. For the first one-half million years of
  human existence, the population growth rate was about
  zero. The population stayed about the same size from
  year to year. It was not until the 1700s that the modern
  era of population growth began. Between 1850 and
  1900, the annual growth rate reached 0.5 percent. The
  rate surged to 2.0 percent by the mid-1960s, dropped to
  1.7 percent by the mid-1980s, and declined to about 1.4
  percent by 2000.
• the last slide shows one set of population estimates but
  there is substantial controversy over these estimates
            Births and Deaths
• Human population grew rapidly during the Industrial
  Revolution, not because the birth rate increased, but
  because the death rate began to fall. This mortality
  revolution began in the 1700s in Europe and spread to
  North America by the mid-1800s. Death rates fell as new
  farming and transportation technology expanded the
  food supply and lessened the danger of famine. New
  technologies and increasing industrialization improved
  public health and living standards. Late in the 19th
  century, birth rates also began to fall in Europe and
  North America, slowing the population growth that had
  resulted from continued moderately higher birth rates
  than death rates.
As Death Rates fell life expectancy steadily increased. Today--
Fertility rates have huge implications for population projections.
Numbers below are billions of people as of 2050
The big debate: fertility rates
Average fertility levels in the developing world dropped
from over 5.9 children per woman in the 1970s to about 3.9 children per
woman in the 1990s.
Changing age structures across the
• Rapid changes in birth and death rates
  having a large impact today on the age
  structure of the population across the
  globe with much older populations in the
  high income countries
• As seen in next figure in low-income
  countries more than one-third of the
  population is under 15, compared with less
  than one-fifth in high-income countries
  An End to Population growth?
• While no one knows exactly when the population will
  stop growing, the United Nations and other organizations
  estimate that world population could continue to grow
  well into the 22nd century, reaching 9.8 billion by 2150.
  These outcomes are based on the medium projections,
  which assume (to varying degrees for different countries)
  that the downward trend of fertility rates will continue and
  stabilize at 2.1 children per woman. They also assume
  continued mortality declines. If fertility were to decrease
  at a much faster pace and stabilize at 1.6 children per
  women, world population could stop growing much
  sooner — by 2050 — at 7.3 billion. Given that scenario,
  the population would decline to 5.3 billion by 2150. On
  the other hand, slower declines in fertility could lead to a
  global population of 10.7 billion by 2050 and 16.2 billion
  in 2150, with fertility projecting to stabilize at 2.5 children
  per woman.
• Populations in particular regions also change due to migration
• Over the past 15 years, the number of people crossing borders in
  search of a better life has been rising steadily. At the start of the
  21st Century, one in every 35 people is an international migrant. If
  they all lived in the same place, it would be the world's fifth-largest
• Migration has always been a part of the world economy—largest
  migrations occurred in the 19th century—there are some predictions
  that migrations will grow in size as developed countries populations
  age—but such projections in the past have been very unreliable
• Note that migration is not just a rich country phenomena—see next
Migrant labour growing in
  importance in OECD
 But big picture is evident here-
migration from low to high income
     Aging in Developed World
• In 1950 there were about 200 million persons aged 60
  and over in the world, constituting 8.1 per cent of the
  global population
• By 2050 there will be a ninefold increase and the world's
  elderly population is projected to be 1.8 billion people,
  about 20 per cent of the total population
• Developing countries still have a relatively young
  population while populations in industrialized countries
  are relatively old
• By 2050, the more developed regions will have a very
  old population, with the proportion of older persons
  projected to increase to 33 per cent
              Life Expectancy
• In 1960, average life expectancy in the OECD area was
  66 years. Today it is 76.
• But ageing populations are also linked to low fertility
  rates (see graph 1). On average each woman in the
  OECD area has 1.6 children and in countries such as
  Italy, Spain and the Czech republic the average is about
  1.1-1.2 children; these are well below the 2.1 children
  required to maintain a stable population.
        Dependency Ratios
• For the OECD area as a whole, the
  number of people aged 65 years and over
  relative to the number aged between 20
  and 64 years – the dependency ratio – is
  expected to double in the next five
  decades to reach almost 50%.
ILO: International Labour Organization: Implications of Aging
 Other aspects of aging and labour
• Participation rate of older men (Over 55) in the labour
  force has been falling until very recently
• Likewise age of retirement has been falling in many rich
• Severe problems for pay-as-you-go pension schemes
• healthcare spending is also likely to increase, especially
  since the share of the very old (80 years old and above)
  is expected to rise from less than 3% to more than 8% of
  the OECD population over the next 50 years ( and this
  age group is one of the biggest users of healthcare
  services ) The over-65 age group accounts for 40-50%
  of healthcare spending and their per capita healthcare
  costs are three to five times higher than those under 65.
 How do most pension plans work?
• Most pension plans are Pay-as-you-go
• Existing workers pay a tax or levy which is used to fund
  the payouts to current retirees
• As long as number of workers rising faster than the
  number of retirees system more or less ok
• But with people living longer and fewer young workers
  entering the labour force many of these plans are now in
• Only viable solutions are to a) cut benefits payout to
  retirees, b) increase tax/levy on the non-retired workers
  or c) make people worker longer-reduce retirement age
  or some combination of the above

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