Population Aging – More Security or Less?

by Jack Goldstone

[Population Aging to 2030, Day 1, Essay 2 of 2]

Populations in the rich world are aging fast.  Some scholars have argued that this will create a ‘geriatric peace,’ as the traditional great powers will no longer have the financial resources or manpower to contemplate large-scale wars.  Others have argued that population aging will particularly benefit the United States.  Because of immigration, it is claimed, the U.S. will enjoy a younger and faster growing population than either its fellow rich nations, or its main challenger, China.  As Europe and China both age rapidly, the younger U.S. will enjoy a further period of relative world dominance.

I think it is wise to be skeptical of both propositions.  In regard to the geriatric peace, it does seem likely that rich nations will be less inclined to invest in their military capacity.  But this is a problem for the U.S., as it is America’s main alliance partners – Europe in NATO, and Japan and S. Korea in the Far East – that will be reducing their military spending.  This will be a problem, rather than benefit, for the U.S. if America continues to face its main military challenges from disorders in young and populous developing nations (e.g. Iraq, Afghanistan, Yemen, Libya, and Somalia).  ‘Boots on the ground’ will be harder to come by from America’s traditional allies in the future.

In addition, it should not be presumed that the U.S advantage in youth and population growth relative to Europe or China will be maintained.  Fertility among US-born Americans is only slightly higher than in Europe; and that advantage has been fueled by immigrants (mainly Hispanic).  Recently, teenage birth rates in America have fallen to an all-time low; this usually implies a long-term decline in fertility as youngsters are deferring child-bearing. Immigration also has been the main source of America’s relatively rapid population growth.   Yet according to a recent PEW research report, net migration to America from Mexico has fallen to zero since the onset of the recession.  In addition, fertility in Mexico is falling fast, and is now lower than that of Hispanics in America.  In coming decades it is likely both that the stream of migration from Latin America, and the fertility of immigrants and their descendants, will fall rapidly, sharply reducing the growth advantage of America.

Finally, it should be noted that America has two further aging challenges that are greater than that of Europe.  First, because the U.S. had a larger baby boom than Europe, it faces a much larger absolute gain in the percentage of elderly.  Where Europe faces an increase of 50% in its over-60 population by 2050, the U.S. faces an increase of 100%.  Europe will suffer from a decline in its under-60 population while the U.S. will retain some growth; hence Europe is more concerned about having enough workers to cover pension funding.  Yet the second factor is crucial – the United States spends a much larger portion of its GDP on health care, and those costs have been rising fast, relative to those in Europe.  As America experiences a huge surge in its elderly population, the difficulties of keeping a lid on health costs will increase; without a major reform, the costs of health care of the elderly in the US will pose as great or greater a limitation on state spending on defense as is found in Europe.  Just one example – the number of those aged over 80 will skyrocket in the U.S. and a significant portion of those (perhaps one-fifth) are likely to suffer from Alzheimer’s or other forms of dementia, requiring expensive nursing care.  The Alzheimer’s foundation estimated that his care alone could cost $1 trillion per year by 2050 if measures are not found to reduce the incidence or cost of Alzheimer’s in the senior population.

These considerations make clear that the U.S. cannot simply be smug about aging and presume it hands security advantages to America.  The number of those that will be 60 or older (perhaps 25% of the population and 33% of all adults by 2030) will be so large, absolutely and proportionately, that they will need to be viewed as a resource, not just an economically inactive and/or dependent group.

There are several ways to respond to America’s and the rich world’s aging in ways to enhance economic and military potential.

First, American should seek to broaden and intensify its military alliances with younger and more populous democratic states – India, Brazil, Mexico, Indonesia, as well as the existing NATO link to Turkey.  These “TIMBI” states all have growing labor forces and populations and will be capable of providing ‘boots on the ground’ for operations in other still younger and fast-growing states where military operations are likely to arise.   Whether through an expansion of NATO into a DATO alliance (Democratic alliance and treaty organization) that is committed to provide manpower to pro-democracy military actions, or through separate but parallel organizations, the U.S. needs to have close working partnerships with countries who will fill in the gaps left by the decline in military and fiscal resources of its traditional European and Far East allies.

Second, the use of healthy seniors in the civilian labor force must be encouraged and facilitated, through phased retirement and later full retirement ages.  This will reduce the dependency burden of resourcing retirement and health care for workers outside of the labor force, freeing government resources to sustain military spending where needed.

Third, the skills and experience of seniors should be valued and put to use.  Seniors, not just youngsters, should be preferred recruits for the Peace Corps, as the managerial and technical skills of senior Americans will be in great demand and of substantial value in helping developing countries train their own professional, technical, educational, legal, and managerial ranks.  America risks losing a huge repository of skills and experience when the baby boomers retire; some of this should be retained in the workplace in the US, but some should also be deployed on behalf of the US abroad.  Just as the Peace Corps built bridges and informal support for the U.S. around the world for an earlier generation, the same could be done through drawing on U.S. senior workers for a new wave of U.S. support for development initiatives.

Jack Goldstone is the Virginia E. and John T. Hazel, Jr. Professor of Public Policy in theSchool of Public Policy at George Mason University, Fairfax, VA, USA. 


Population Aging: a Demographic and Geographic Overview


             by Richard Cincotta

[Population Aging to 2030, Day 1, Essay 1 of 2]

This GT2030 blog, focused on population aging, begins with this introductory essay aimed at familiarizing readers with some of the demographic and geographic particulars of this phenomenon, and with several key demographic terms. The term most in need of definition is, of course, population aging. Strictly speaking, aging is any shift in the population’s age structure (the distribution of individuals, by age) that produces an increase in the median age (the age of the individual for whom one-half of the population is younger). Generally, advances in a population’s median age are associated with increases in the proportion of seniors (aged 65 years and older), and declines in the proportion of children (younger than 15). Sustained population aging leads to a relatively older workforce, slowed workforce growth and slowed growth among school-age children.

While various age-specific patterns of birth, death and migration can induce change in the median age, over the past century two demographic processes have contributed most powerfully to country-level population aging. First and foremost is declining fertility (fertility is usually measured by computing the total fertility rate (TFR), an immediate estimate of the number of children that women are bearing over their reproductive lifetime). The second most influential factor has been increasing longevity. Not all trends associated with modernization, however, contribute to aging. Declines in childhood mortality have served to slow aging’s pace or make it retreat, as have waves of youthful immigrants (until the immigrants themselves age) and occasional baby booms.

Is an advance in the median age bad news? That depends on “where you are” the broad diversity of age structures suggested by today’s lengthy spectrum of median ages—which in 2012 stretches from around 16 years (Niger, Uganda, Mali) to around 45 (Japan, Germany).  For states in the youthful phase of the age-structural transition (median age 25.0 years or less; see Figure 1), the near-term net economic, social, political outcomes of aging are overwhelmingly positive. Getting to the next next age-structural phase—the intermediate phase (>25.0 to 35.0)—is crucial; it is associated with very high support ratios (working-age adults per child), diminished risk of intra-state conflict, the accumulation of human capital, and higher savings (among “saver” societies). Moreover, there are growing indications that states might develop more quickly by sustaining their intermediate phase—which, for very-low-fertility states, has been rather fleeting (for example, China recently departed the intermediate phase after entering 25 years ago). In fact, states that have achieved near-universal secondary education and sustained a lengthy period of economic prosperity and liberal-democratic stability, including the US, have done so during their population’s presence within the so-called age-structural sweet spot: starting in the their intermediate phase and finishing during the first half of the mature phase (the mature phase ranges from >35.0 to 45.0 years).

This forthcoming essays in this blog are focused “beyond the sweet spot.” It is concerned with the challenges and possible outcomes of “advanced aging”—a condition never before encountered—that will evolve in the so-called post-mature phase (median age >45.0 years) of the age structural transition. Countries approaching the end of the mature phase, most in Europe and East Asia, are accumulating large proportions of seniors, most of whom are moving out of the workforce, drawing on pensions, drawing down personal savings and other accumulated assets, and accepting transfers from their children, other relatives, and other public and non-profit sources. As they age, seniors face an increasing risk of morbidity due to chronic illness and declining physical mobility, as well as an increasing risk of poverty.

While improvements in healthcare and nutrition promise to compress the late-in-life period of high morbidity and permit the extension of workforce participation, the projected declines in the number of working-age adults per retiree (the old-age support ratio) in European and East Asian states over the coming two decades is unprecedented. These projections suggest that those states heading for a post-mature future need to deftly manipulate a full range of social and fiscal policy levers in order to mediate, and adapt to, the cost burdens that are poised to descend upon their pension and healthcare systems. Simultaneously, most of these states will likely wrestle with the challenging and politically delicate task of encouraging the reestablishment of near-replacement-level TFR.

As of 2012, only Japan and German have attained the 45-year median-age mark—and just within the past year or two. Significantly, both countries face “negative momentum”; in other words, because of several decades of annual TFRs below 1.5 children per woman and steadily increasing life expectancies, these and other very-low-fertility states are projected to continue to age for the foreseeable future—until old-age mortality dissipates their populations’ currently broad bulges of seniors and middle agers, and fertility or migration significantly enlarges their childhood and young adult cohorts. In other words, advanced aging is not a momentary inconvenience.

By 2030, advanced aging will have spread widely through Europe (see figure 2: world maps, 2010 and 2030). Current projections by demographers at the US Census Bureau’s International Program Center (International Data Base, June 2011) suggest that the populations of 29 states (each over 1 million residents) will experience a median age over 45.0 years by 2030. Of these, the Census Bureau indicates that 26 will be located in Europe, and 3 in East Asia (Japan, Taiwan and South Korea). Despite China’s rapid pace of aging, US Census Bureau projections place its 2030 median age at 43 years, very close to the UN Population Division’s medium fertility-variant projection for China. The UN Population Division, using a somewhat different set of projection assumptions to produce its medium fertility variant, projects that by 2030 this post-mature group of countries (median age >45.0 years) will consist of 19 states: 14 European, 4 East Asian (including Singapore), and Cuba.


Richard Cincotta is Demographer-in-residence at the Stimson Center in Washington, DC, and a consultant on political demography for the Woodrow Wilson Center’s Environmental Change and Security Program. From 2006-09, he served as a long-range analyst for the National Intelligence Council.

 

A Guide to the Essays: Population Aging to 2030

Welcome to the National Intelligence Council’s Global Trends 2030 Blog, “Population Aging to 2030”, due to be posted from July 30-Aug 3, 2012. Two thematic questions motivate this blog:

  • Will population aging, by 2030, contribute to undermine, rearrange or unravel the current international political and economic order? 
  • How will China’s rapid aging affect its position in that order by 2030?

To produce this blog, a set of political demographers, economic demographers, political scientists and historians, all of whom have been engaged in population-related research, have been asked to submit brief essays on issues that are germane to these questions. Over the next week, sets of these essays will be posted on the GT2030 blog, grouped by themes:

Richard Cincotta & Jonathan Potton

The Stimson Center, Washington, DC

Future Trajectories of Migration and Issues Policy Makers Will Face – Migration and Europe

New trends involving global migration?

In the period to 2030, I expect the powerful motivations that induced people to migrate in last 20 years are expected to persist.  The motivations of migrants will be shaped by both push and pull factors—pressure to exit and attraction of destination countries—resulting in increasing numbers of  migrants going to emerging economies with growing middle classes in Asia, Africa and Latin America.  Massive cities with informal economies and technology centers will likely have magnetic-like attraction for both internal migrants and people from poorer countries.

  • Migrants will continue to be pushed from their origin countries by environmental stress, including climate change, by war, civil conflict and crime, and by ethnic rivalries and discrimination.  Survival will motivate many to move, despite marginalization of refugees in destination countries.
  • Migrant motivations also will be powerfully shaped by pull factors, such as the attractions of greater wages, improved life chances, opportunity to better use their skills and education, and chances to influence their origin countries as part of cohesive Diasporas.  People affected by pull factors will range from low-skilled agricultural and service workers to top flight scientists and engineers.  Successful migration experiences of earlier migrants will feed motivations of others to take their chances, especially among women with constrained life chances in their home countries.

It is worth considering seven potential trends involving global migration:

  1. Proliferation of border control and immigrant identification technologies, to track not only flows across borders, but also activities of resident immigrants. Increased use, maintenance of data bases for residents, citizens for access to services.  There will likely be a related increase in opportunities for corruption, cyber intrusions, and false documentation.  Technologies could give governments capabilities they really don’t want to implement, especially for large informal economies.  Workarounds will abound.
  2. Sharp increase in emerging economies as immigrant destinations.  Labor migrants will take advantage of vibrant economic growth and large, urban informal economies, even if the environments portend social stresses.  Governments grapple with how to accommodate immigration as both a source of economic growth and of social tension. Efforts to introduce gradations in immigrant citizenship status (as in Roman imperial efforts to give legal status to peoples from the periphery). Where will middle class interests come down? 
  3. Aging societies will find ways to make labor migration work. Aging populations and mismatches between education and labor demand will make labor migration more important to economic performance. In these aging societies, private sectors will likely sustain and increase demand for migrant labor—for both low-skill and high-skill or professional workers, even if politically and culturally sensitive.  Despite episodic efforts to rein in migration, governments will generally be both unable to withstand private sector influences favoring migration and unable to systematically track and regulate individuals migrants.  Are backlashes inevitable?
  4. Intensified debate over status of labor immigrants and refugees in advanced social welfare states. We should expect increased social mobilization, legal maneuvering and NGO activities over rights and obligations of immigrants.  How immigrants relate to preexisting social contracts will become an increasingly important issue.  Will private sectors that need labor mount campaigns to support immigration and even immigrant rights?
  5. Tensions, frictions between government jurisdictions over migration. We should expect to see divergent goals and incentives of national and provincial or local governments, with increased efforts of urban jurisdictions to extract revenue from informal economies with extensive immigrant participation. Different jurisdictions will bear different kinds of costs for migration. We are likely to see increased attention to the obligations of residency, as opposed to citizenship, with lots of contention over which part of society can articulate such obligations.  Educational standards for new migrants will likely be contested.  Could inconsistencies between jurisdictions persist for years?
  6. Increased recognition by national and sub-national governments of reputational advantages of having immigrant rights and “the right to have rights” (Arendt), at least for the highly skilled.  National reputations will be a determinant of flows and, recruitment of talent and could increasingly seen as a factor in economic performance.  Can we expect a global market for highly skilled, mobile people?
  7. Increased government-to-government cooperation over labor migration. We could see some nascent global governance mechanisms, and increased incentives for governments to bind themselves in bilateral or multilateral institutions, conventions or protocols, in order to (1) gain leverage with domestic constituencies over migration issues, and (2) gain reciprocity from signatory nations. Implementing and monitoring such agreements will be difficult, contentious, and touch sensitivities regarding sovereignty.  Would brain drain or brain gain be among the first issues to be addressed?

Robert O. is one of the Research Directors in the National Intelligence Council’s Strategic Futures Group, with a portfolio covering governance, democratization, and migration.