Tuesday, April 23, 2013

Australian age-dependency ratios

Everywhere you turn it seems that higher rates of population growth are seen as a 'solution' to an ageing population.  Here's one recent example.  My general views on this matter are found here.

At the very least there should be a publicly accessible model of population growth to verify the claims being made in this debate.  The productivity commission has modelled population growth for this purpose, although the intricacies of the model are not at all clear or public.

My first step towards this is to actually look at the historical demographic record in Australia.  As you can see from the interactive chart below, the country's age dependency ratio has been steadily increasing since at least the 1970s.

Offsetting this age dependency has been a quite dramatic decline in youth dependency as fertility rates fall. The total dependency, or number of children and retirement age people per working age person is at record lows.

The next step is the add some features to this model to allow a choice of assumptions about immigration rates (and ages) as well as birth and death rates, to see exactly what how immigration policy is affecting demographics and whether there are some circumstances in which the 'immigration solves ageing' slogan may hold.



  1. The ratios should stabilise as the pre-boomer generation dies out. I don't think it will be the problem that many expect.

    I do have a question though Cameron, what do you think will happen in the global economy around 2070 when the global population begins to decline?

    How do we promote economic growth when we have a shrinking market? We will probably have entered the next world by then, but it's a question that interests me.

    Do you have any thoughts?

    1. "How do we promote economic growth when we have a shrinking market? "

      Actually I think with low population growth, even slightly negative, it will be much easier to improve wellbeing. We might just have to reconsider what we measure as economic well being, since if we just measure the way we currently do for GDP things will look average (maybe not so much in per capita terms). But once we start measuring in per capita terms, and measure things that matter, I think progress will be quite good.

    2. Yes measurement per capita will make the numbers look better, but I still have concerns about how productivity per capita will have value when demand is falling.

      it's a way off so I won't lose any sleep just yet.

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  2. Nice work Cam

    and the freshen up looks good too :-)

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