World Demographic Trends

Mélina FRANGIADAKIS 4RI1

English paper 30/10/07 World Demographic Trends

Demographic variables such as birth and death rates, age structures, global and national trends in population size, are useful to a wide range of analysts in order to plan the future needs for water, food and energy. Besides, those studies enable scientists to point out, for instance, the environmental, urbanization or welfare-related problems which are indeed closely linked to those demographic questions. We have been studying for a month the current world demographic trends through three cases : Japan, Russia and China. The three of them could be representative of a so-called demographic crisis which affects Europe and Asia but in the meantime, they all have nationalspecific factors which account for a population crisis and policies to deal with it. What population trends shall we watch ou for in the next years ? What demographic challenges policymakers are to be facing ? This paper aims at casting a light on some dramatic demographic trends which might not have been forecasted, and at evaluating the consequences of those population trends in human welfare in the years to come. I will focus on the causes and consequences of global ageing, which is at stake in the three countries I mentioned and generally speaking, in all developed nations. Then I will expose other rising demographic issues such as gender inequality, AIDS or international migrations.

1. Let’s look first for the demographic causes of global ageing. This is the well-known « demographic transition » (falling mortality rates followed by falling birth rates) which is mainly responsible for the ageing of population. If the patterns are similar in most countries, one must not neglect the international differences in the speed and the extent of ageing processes. Today, countries facing a dramatic ageing of population are industrialized nations, i.e the ones where the demographic transition has come to an end. Russia, Japan and China have in common extraordinarily low birth rates : 12 out of 1000 in China, 8.1 out of 1000 in Japan, 10.9 out of 1000 in Russia. Obviously the demographic transition is related to another phenomenon which also accounts for the ageing of population : the rising life expectancy thanks to medical progress and healthier lifestyles. Japan, here, is the best example since the country has the longest life expectancy in the world. If we combine this information to its birth rate, we do understand why more than 2 out of 5 people are 65 or over in the rural areas of Japan today. Yet the demographic transition is not the only component of global ageing : some endogenous factors also account for this phenomenon such as public policies which have been led in some countries. I am thinking of two kinds of policies-side effects : - The « women’s condition » : some countries do not enable women to conciliate work and motherhood. On the one hand it is a question of culture : you must be a mother first ; on the other hand, specific infrastructures such as pre-schools are underdeveloped in many countries. Germany perfectly illustrates those inconveniences. - China’s one-child policy : one would have hardly imagined the side-effects of this birth policy. As the one-child policy approaches the third generation, one adult child supports two parents and four grandparents. Due to that policy, China is considered to be in the most serious stituation today in terms of ageing population.

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Mélina FRANGIADAKIS 4RI1

English paper 30/10/07

2. Economic and social consequences of the ageing population. Global ageing deeply affects economics and society. The median age of the world population is expected to rise from 38 years at present in the most developed countries to 46 years in 2050. At a microeconomics level, it implies a change in labour productivity. At a macroeconomics level, labour will become scarce. Since the number of working age people is bound to fall, the relative price of labour will change. We can also easily imagine a loss of GDP at a worldwide level. This is not a projection. This change in the structure of work is happening right now in China which is about to lose its position of « world’s workshop » that the country had won thanks to its numerous and cheap workforce. Some factories already left the East Coast of China (i.e the region which had boomed the economy of the country) because the workforce became too expensive, less competitive. In Japan where one can observe rural exodus, it has become very difficult for elderly farmers to keep on working, since the agriculture is sustained by a collective effort. In a village named Ogama, local people even have decided to make their town disappear from the map ! Other villages will be administratively reorganized i.e will become part of another city. All this raises obviously the problem of the pensions and of the healthcare systems. Public spending is projected to increase as a direct budgetary consequence of the ageing of population to cover those costs. Recent studies show that there should be 1 dependent person for 4 working-aged people in 2050, instead of 1 for 10 at present. But in addition to the financing of pensions, other areas of public spending depend on the age structure (education, family subsidies…) and will be transformed. There should be 2 billion people aged 60 or over in 2050. This increasing number of « seniors » among the consummers will for sure affect the consumption markets in each country. The sector of old people’s home and care will be developed because working-age people do not have time any more to look after their parents.

3. Other demographic issues. We have seen, in the set of articles we studied, that global ageing would probably be the most preoccupying concern for industrialized countries in the next future. However, it is not the only demographic shock we have to face. Indeed, the documents we studied point out at least 2 other underestimated issues : AIDS and gender inequality. I will also say a word of international immigration which I think, is worth mentioning too. Gender inequality is another consequence of some fertility policies such as China’s preference for sons (118 boys are being born for 100 girls). Besides the problem of abortions and infanticides it causes, it contributes as the generation is growing up, to a serious gender imbalance. It concretely means that millions of Chinese men will have no chance to get married. Same problem in India, where rural families want to get boys only, not to pay dowries when their child gets married. AIDS currently decimates entire countries. Sub-Saharan Africa is in a dire situation regardind HIV-infection spread. Since we focused on Europe and Asia, we did not expressively mention it during the class but AIDS in Africa is a real challenge for the

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Mélina FRANGIADAKIS 4RI1

English paper 30/10/07

economic development of the continent as well. The only developed country which equalizes those infection rates is Russia. Russia unfortunately deserves to be a special case-study on behalf of its death rate threatening the nation : the country is losing 700 000 people per year partly because of medical causes. Some 1 million Russians are estimated to be HIV-positive. Each year, the number of infections doubles. The economic consequences of the epidemics could be scarier than in Africa where, at least, the birth rate is far higher than in Eastern Europe… At last, international migrations could also have been reported as another population trend to be watched out for. Many Hispanics cross illegally the US-Mexican bordure every day and Africans keep on taking great risks to reach Europe by boat (towards Spain or Italy). First, even if immigration is a driving force for population growth and could be considered as a solution in some countries, it is proven that it won’t reverse the ageing process ; Besides, immigration will affect ethnic composition of the receiving countries and will accelerate the difference of development between the global North and the global South.

As a result, policy makers will have to take into account at least 4 demographic trends which will soon reshape our world. The biggest challenge they will face is global ageing which already affects the socioeconomic structures of the industrialized countries by deeply changing the workforce (size, age). Three other population trends will require attention : gender inequality (especially in China and India due to their preference for sons), HIV-AIDS which ravages entire populations in Africa and seriously threatens Russians and Ukrainians, and at last, international migrations that durably transforms both the profiles of populations in receiving countries and the lives of those who stay in the global South. Various political solutions are suggested to tackle those issues such as new fertility policies, immigration, investments to fight AIDS and other diseases, changes in the pensions systems and so on, but every one agrees on the fact that there will be no quick and obvious or general solutions to the demographic crisis.

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