Australian Bureau of Statistics
4102.0 - Australian Social Trends, 2006
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 20/07/2006
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Pace of Aging: Australia and Japan
PACE OF POPULATION AGEING: PROJECTED CHANGES IN MEDIAN AGE AND POPULATION SIZE
PACE OF POPULATION AGEING
Demographic modelling shows that a persistent decline in fertility rates accompanied by rising life expectancy leads, in its initial stage, to a shift in the age structure towards older ages – that is, ageing of the population. Once the population has relatively fewer young people relative to the number of older people, even increases in fertility rates will be of limited effect in adding to the population because of the reduced number of women in reproductive ages. In later phases (and in the absence of significant migration intake), population ageing is therefore accompanied by population decline as the number of deaths exceeds the number of births (negative natural increase).
...CHANGES IN THE AGE STRUCTURE
Measured by world standards, the pace of ageing in Australia is moderate. While Japan's median age increased by 19.2 years (to 42.9 years) over the last five decades to 2005, in Australia it rose by a third of that amount (6.6 years) to be 36.7 years in 2005. Although ageing is projected to accelerate in Australia in the future, the speed of change will be slower than in most other developed countries, and much slower than in Japan. By 2050 Japan's median age is projected to increase by 10.5 years, to 53.4 years, while Australia's is projected to rise by 8.5 years, to 45.2 years.
The rapid increase in the median age of the Japanese population is reflected in changes in other measures of the age structure: very fast growth of the population aged 65 years and over, a decrease in the proportion of dependent children (aged 0–14 years), and a gradual decline in the proportion of people in the age group 15–64 years, which covers the years when labour force participation tends to be strongest. In Japan, the proportion of the population aged 65 years and over increased almost fourfold between 1955 and 2005, compared with a 57% increase in Australia. At the same time, the proportion of children decreased 58% in Japan and 33% in Australia. These trends are projected to accelerate in the future.
MEASURES OF AGEING, Australia and Japan
...CHANGES IN POPULATION SIZE AND GROWTH
The changes in the age structures of the Australian and Japanese populations described above will result in changes in their respective sizes and growth rates. Between 2005 and 2050 the population of Japan is projected to decline by 21%, or a loss of 27.1 million people. Over the same period Australia's population is projected to grow 38%, or 7.8 million people to be 28.1 million people in 2050.
POPULATION GROWTH RATE, Australia and Japan
DRIVERS OF POPULATION AGEING
The magnitude and speed of ageing results from the changes and dynamics of three demographic variables: fertility, mortality (longevity) and net overseas migration.
Fertility decline is the major driver of population ageing (see Australian Social Trends 2005, Recent fertility trends). Declines in fertility lead not only to fewer people in the present and short-term but also to fewer younger people in future decades, as low birthrates translate into smaller numbers of women in childbearing ages in two or three decades. For this reason even small changes in fertility can have significant implications for the current and future population size and age structure.
Fertility has been declining in both Japan and Australia, though large falls occurred considerably earlier in Japan. In the years following 1949, Japan's total fertility rate (TFR) decreased rapidly, falling from over 4 births per woman to below 2.1 (the so-called 'replacement level') in 1957, although it did recover slightly and hovered around the replacement level until the mid-1970s. Australia's TFR, on the other hand, remained above 3 babies per woman until the mid-1960s, and only fell below replacement level in 1976. Australia's longer baby boom produced a younger age structure as measured by the median age, which decreased slightly between 1955 and 1980.
In the future, the speed of ageing in Australia and Japan will depend greatly on the level and stability of each country's TFR. If the trend towards fertility decline accelerates, population ageing will dramatically speed up in both countries. Recent Australian fertility data suggest fertility rates have stabilised somewhat following the steep declines in TFR that have occurred since the 1970s.(EndNote 5) Japan's TFR on the other hand has continued to decline, and the 2004 level of 1.3 was amongst the lowest in the world.
Is it possible to keep the TFR stable? Some commentators say "no", claiming low effectiveness of pro-natalist policies, due to the fact that the most significant causes of fertility decline lie in the areas beyond the reach of the state, such as individual choices or partner relationships.(EndNote 6) Alternatively, many argue that there is a significant role for governments to play in creating more family friendly environments, enabling the reconciliation of paid work and child rearing/bearing responsibilities, increasing the availability of affordable childcare and education of children, and easing the tax burden of parents.(EndNote 7), (EndNote 8) Japanese fertility continued to fall throughout the 1990s, despite a number of Japanese government initiatives aimed at encouraging women to have more children.(EndNote 9) However, it is uncertain how steep the decline in fertility would have been had no government action been taken.
TOTAL FERTILITY RATE, Australia and Japan — 1948 to 2004
Declines in mortality at older ages are considered to be the second most important driver of population ageing. Improvements in life expectancy, especially life expectancy at older ages, have an immediate impact in increasing the proportion of people in these age groups in the population.
Over the past 50 years both Australia and Japan have witnessed substantial improvements in life expectancy at birth. As a result of improved health care, and changes in lifestyle, the number of years a newborn baby (combined males and females) can expect to live increased by 9.1 years for Australia between 1970–1972 and 2002–2004, and by 10.1 years for Japan between 1970 and 2004. In both countries the majority of improvements taking place over this period can be attributed to mortality reductions at older ages. These changes have directly resulted in higher numbers and proportions of people in older age groups and also contributed to increases in overall costs of health and aged care.(EndNote 1),(EndNote 2) This situation will escalate in the future if, as projected, life expectancies in Australia and Japan continue to increase. To alleviate anticipated fiscal and labour market pressures, both Australian and Japanese governments have taken actions to encourage higher labour force participation of older workers, such as privately funded superannuation in Australia and, in Japan, to shift the cost of elderly care back to families.(EndNote 1),(EndNote 10)
The difference between the numbers of births and deaths within a country is its natural increase. Natural increase has been falling in both Australia and Japan, although Japan's has been falling at a faster rate. In 2006, Japan's natural increase is projected to become negative and then continue to decline, while Australia is projected to maintain positive natural increase until 2044.
LIFE EXPECTANCY, Australia and Japan
Overseas migration contributes to changes in population size and, to a lesser extent, age structure. As the age profile of newly arriving migrants is, on average, younger than that of the resident population, overseas migration tends to make the age structure of a population younger than it would otherwise be. However, increases in fertility rates have a greater effect in reducing the age structure than migration has.
The impact of overseas migration for population growth and age structure varies according to the relative volume of migration received by a given country. In Australia, a moderate-level immigration country, overseas migration has significantly contributed to population growth, and to a lesser extent to reducing the overall age of the population. Had there been no overseas migration between 1945 and 2000, Australia would have had 7 million fewer people in 2000, with the proportion of the population aged 50 years and over increasing by just 1.3 percentage points (from 28.2% to 29.7%).(EndNote 11) In Japan, a country which has historically received very little overseas migration, population growth and changes in age structure have essentially been driven by natural increase (the excess of births over deaths). Overseas migration has played only a marginal role, and its contribution to population growth has been negligible.
More recently, migration has been increasingly viewed by the Japanese government as a useful tool in overcoming problems of ageing related labour force shortages. A number of amendments have been made to very strict immigration law, in order to allow for importing unskilled labour and health care workers from neighbouring Asian countries.(EndNote 12)
Overseas migration will also continue to be important in sustaining population growth in Australia. The medium variant population projections for Australia assume a long-term level of net overseas migration of 110,000 people per year, resulting in an extra 7.1 million people in Australia by 2051. In the absence of this level of overseas migration Australia's population is projected to begin to decline in 2033. As well as contributing to population growth, overseas migration, and in particular skilled migration, has also been acknowledged to be helpful in overcoming skill deficits and ageing related fiscal pressures in Australia.(EndNote 1)
NATURAL INCREASE AND NET MIGRATION RATES, Australia and Japan
1 Productivity Commission 2005, Economic Implications of an Ageing Australia, Research Report, Canberra.
2 Department of Treasury 2002, Budget Paper No. 5: Intergenerational Report 2002–03, Commonwealth of Australia, Canberra.
3 Eckersley R. 2004, Well & Good. Morality, meaning and happiness, Text Publishing, Melbourne.
4 National Institute for Population and Social Security Research 2002, Population Projections for Japan: 2001–2050. With Long-range Population Projections: 2051–2100, viewed 1 February 2006,<www.ipiss.go.jp/pp-newest/e/ppfj02/ppfj02.pdf>.
5 Australian Bureau of Statistics, 2005, Births, Australia, 2004, cat. no. 3301.0, ABS, Canberra.
6 Lutz W. 1999, Determinants of low fertility and ageing prospects for Europe, in Family issues between gender and generations, European Commission, Vienna pp. 50-69.
7 McDonald P. 2000, 'Gender Equity, Social Institution and the Future of Fertility,' Journal of Population Research, vol. 17, no.1, pp. 1–15.
8 Longman P. 2004, The Empty Cradle. How Falling Birthrates Threaten World Prosperity And What To Do About It, Basic Book, New York.
9 National Institute of Population and Social Security Research 2003, Child Related Polices in Japan, IPSS, Tokyo.
10 Ogawa N. and R.D. Retherford 1997, 'Shifting Costs of Caring for the Elderly Back to Families in Japan: Will it Work?', Population and Development Review, vol. 23, no. 1, pp. 703–741.
11 McDonald P. and R. Kippen 2000, 'Australia's Population in 2000: The Way We Are and The Way We Might Have Been', People and Place, vol. 8, no. 3, pp.10–17.
12 Ogawa N. 2000, Policy Options for Meeting the Challenge of an Ageing Society, in Japan Ageing Research Cente, Ageing in Japan 2000, JARC, Tokyo.
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