13/7/19: Russian v European Dependency Ratios: 1950-2100

Doing some numbers crunching on a different project, I just came across this interesting database from the UN showing population projections through 2100. One interesting aspect of this data is the forecasts/projections for the dependency ratio - basically, a number of working age population per 100 people of non-working age.

There are caveats attached to the analysis of this data, including the changes in the duration of the working age (over the years, younger age dependency has moved toward 24 years from 19 years due to extended period spent in education, while for older age dependency, the mark has been moving from 64 years to 69 years as the last year in working age group). These caveats aside, here is a really eye-opening chart:

We consistently hear about the demographic catastrophe that has visited Russia since 1990-1991 collapse of the USSR. We are also constantly hearing the claim that the Russian society is demographically so challenged, it is running out of people. The chart above shows that, actually, that is not exactly true. Russia has been showing pretty decent readings on population dependency ratio compared to its peers ever since the mid-1970s. More so, through 2020, the estimates from the UN suggest that Russia is performing better than its peers in Europe in terms of overall dependency. This is expected to change - to the detriment of the Russian society and economy - in 2030-2040, but thereafter, Russia is expected to once again perform better than overall Europe.

Similar picture arises when one looks at more modern definition of dependency age ranges:

This data suggests that the popular narrative about the relative decline of Russian population dynamics compared to other European states is at least highly imperfect.

3/8/15: Europe as a Demographic Disaster

Here are the latest UN projections for population growth though 2100 (best viewed by clicking on the image to enlarge):

Source: http://esa.un.org/unpd/wpp/Publications/Files/Key_Findings_WPP_2015.pdf.

Of all major regions around the world: only three are likely to post negative population growth. These are:

• Europe - posting the most disastrous, by a mile, demographic prospect of all regions;
• Followed by Asia, where cumulated population decline will be less severe (through 2100) than in Europe; and
• Finally, by Latin America.

Here is a table calculated by me based on the UN projections showing 30 countries with largest declines in population over 2 periods: 2015-2030 and 2015-2050:

I group these countries by a historical sub-regions as follows:

• EU 
• Former USSR excluding currently in the EU

Several striking observations emerge:

• One hears quite frequently media comments about the disastrous situation with Russian demographics. Except: Russian Federation is not in 30 countries with worst population growth performance over 1950-2015 period, while its counterparts in the USSR - Ukraine, Georgia and Belarus are. Russia will be ranked 19th worst performing (demographically) country in 2015-2030 and 2015-2050 period. But compare this to Ukraine (to be ranked 4th in 2015-2030 period and 3rd in 2015-2050 period); Republic of Moldova (expected to rank 11th in 2015-2030 period and 4th in 2015-2050 period); Belarus (forecast to rank 12th in both periods); Georgia (ranked 20th in 2015-2030 period forecasts - better than Russia, but 15th in 2015-2050 forecast - worse than Russia). I have not heard much of 'disastrous policies' assessments in the media concerning their demographic collapse predictions.
• Another interesting aspect of the table is the exceptionally poor forecasted performance in demographics for the Eastern European states members of the EU.

You can see the above point 2 from the table below that selects EU member states:

Just for comparative reminder: Russian population (the benchmark case for media-covered demographic disaster) is forecast to shrink by 10.4% between 2015 and 2050. Which is bad, but better than 10 out of 29 EU member states (not benchmarks, according to the media, of a demographic disaster).

6/2/2014: Dependency Ratios Out to 2050

You've heard many analysts talking about the 'demographic dividend' for Ireland as if young people (we still have more of them than other countries in Europe) can be locked safely within the shores of this island. But supply of emigrants from this (and any other country) is driven, in part, by the demand for younger workers in the labour forces around the world. And here things are rather testy:

So that story of the 'demographic dividend'... do we have a policy plan for protecting or securing it here in Ireland? one can only keep hoping... 

18/8/2013: A Baby Recession for Europe?

An interesting and forward looking study from the Eurostat on the demographic fallout from the current crisis predicting a so-called 'baby recession' in Europe. The paper is downloadable here: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-13-013/EN/KS-SF-13-013-EN.PDF

The main thesis is that "Fertility is commonly assumed to follow the economic cycle, falling in periods of recession and vice-versa, though scientific evidence is still not unanimous on this. This report looks at fertility trends in 31 European countries against selected indicators of economic recession… in 31 European countries, the economic crisis spread in 2009, while decreases in fertility became a common feature in Europe with a time lag. … In 2008, there were no falls in the rate compared to the previous year, but by 2011, the TFR had declined in 24 countries."

TFR refers to the total fertility rate.

All of this sounds reasonable, and there are some signs that fertility rates might be signaling a crisis-related decline and that such a decline might be coming. However, there is a slight hick up in the data on a number of fronts:

1. The average TFR is running at 1.595% for the 31 countries sample in 2010-2011 against 2000-2009 average of 1.527%. In other words, the decline is not evident so far, except in one year of 2011.
2. On country-average for 2000-2009 period, 11 out of 31 countries have been running ahead of average. In 2010-2011 period, same 11 countries run ahead of 31 countries-average. So there is no compositional change on under-performance relative to average.
3. Over 2010-2011, TFR average for countries was ahead of 2000-2009 average for 24 out of 31 countries. 
4. Countries that saw TFR decline from average for 2000-2009 to lower average for 2010-2011 were: Cyprus (not in crisis in 2008-2011), Luxembourg (not in crisis in 2008-2011), Hungary (in a crisis), Malta (not in crisis), Portugal (in crisis), Romania (in crisis), Latvia (in crisis), suggesting a very mixed evidence on the links between TFR and crisis to-date.
5. The weak link is further reinforced by the fact that other crisis-hit countries have fared much better in terms of TFR: Estonia, Ireland, Greece, Spain, Italy, Slovenia, UK, Iceland all posted increases in terms of 2010-2011 average compared to 2000-2009 average.

Charts below illustrate (data from Eurostat report, charted and computed by myself):

Note: in the case of Ireland, weather events had potentially significant impact on 2008 and 2010 birth rates. Adjusting for these effects, 2011 reading of TFR for Ireland is hardly a significant decline.

10/7/2013: Four charts that scream 'Wake Me Up, Scotty!'

A look into the future in four charts:

The charts above show the demographic divergence between the US, and other core G7 economies, as well as the differential in trend for France and the UK from Japan and Germany. 

Of course, labour mobility is much more open today than in the 1950s-1990s, but given that back in those days Europe usually sent its brightest to North America (more recently also to Australia and in the near future to the rest of the world, if we keep going at current rates of youth unemployment), and that with the above charts this is not likely to change. If anything, given the rends above, why would anyone young stay in declining Europe? To mind the decaying family estates and pay for the growing demand for geriatric supplies and services? So one has to wonder: is the Old World really going to have any growth?.. Of course, it might be the case that by, say 2050, Europe will harmonize and consolidate and coordinate and centralize and stabilise and OMT itself to such an extent that no one will have to work at all in the paradise fully funded by an unlimited ESM. 

Who knows... but for now, you can play with the UN Population data through 2100 here: http://esa.un.org/unpd/wpp/unpp/panel_population.htm

Updated: an interesting article on the crisis effects on European birth rates: http://hromedia.com/2013/07/10/eurozone-economic-crisis-hit-birth-rates/

6/82012: A Spooky Chart of Decade?

A spooky chart of decade? Why, this one of course:

The chart comes from The Great Leveraging, by Alan M. Taylor, CEPR DP 9082.

Yes, folks, the upward path in the red line - the dependency ratio for more developed regions - is scary enough. Fair play. Although we all knew it. The really monstrous bit is the green line rise from 2030 on and the relative flattening of its decline from 2015 onward. Why is it "monstrous"? Because until recently, immigration into the advanced economies from developing economies was taken as a given. Now, not so much anymore. So, as the dolphins sign in my favorite film: "So long & Thanks for all the fish / So sad that it should come to this / We tried to warn you all but oh dear..." Never say we haven't told you (Europeans) that abandoning family for the sake of social benefits and improved consumption of holidays is not a good idea, but it is even dafter when one thinks that the sources of cheap labour might just run out pretty soon... in and around 2010-2025...