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Dividend or Deficit? The Economic Effects of Population Age Structure
›According to the latest projections, the global population will hit the seven billion mark later this year and perhaps nine billion by 2050. Yet, while the global population is growing, it is also aging, due to falling fertility rates and longer life expectancies. By 2050 the number of people aged 60 and over will reach two billion. At an event at the Wilson Center on April 1, Andrew Mason of the University of Hawaii at Manoa and the East-West Center and Ronald Lee of the University of California, Berkeley, discussed their research on the economic effects of an aging world with discussant Dalmer Hoskins of the Social Security Administration. [Video Below]
Changing Age Structures and Economic LifecyclesThere are three phases of age transition, Mason explained: during the first phase, high fertility rates and declining infant and child mortality rates increase the share of children in the population. In the second phase, the proportion of the working age population (those aged 15-64) increases, potentially providing a boost to production and consumption, and in the third phase, the elderly proportion increases due to lower fertility rates, decreasing production and increasing the burden on state support systems.
From 2010-2015, 85 countries are projected to witness the largest absolute increase in history of their populations aged 60 and over. This increase in elder populations is significant, Mason said, because it may mean slower economic growth.
Based on data collected through National Transfer Accounts, Mason and Lee’s economic lifecycle tracks the labor income and consumption rates of a population at a given age. In high income countries, consumption increases around the teen years as a result of investments in education, then dips slightly, and, finally, sharply rises around the age of 80 due to high health care expenditures. The consumption rate remains relatively flat in low income countries, with consumption differing the most in the older ages.
The support ratio measures the number of workers relative to the number of consumers, while taking into account age-specific variances in number of hours worked and level of consumption. Mason explained that China, after four decades of rapid growth, has reached the peak of its support ratio, with many workers relative to the number of consumers. However, China is rapidly aging, like much of Northeast Asia, and also because of its one-child policy. The resulting decline in its support ratio will likely limit its economic growth; however, Mason cautioned that it would be “rash” to say that its growth will bottom out completely.
The United States has an age structure that is “quite a bit more favorable” than other industrial countries, Mason said. Higher fertility, lower life expectancy, and a higher rate of immigration mean that aging is coming more slowly to the United States than other developed countries.
The Second Demographic Dividend: An Investment OpportunityDuring the first demographic dividend, the labor force grows more rapidly than the dependent population, thus allowing more resources to be spent on economic growth. But what happens after that? As populations age, there is a “semi-automatic” increase in investment in human, physical, or financial capital, Lee explained; for example, as fertility falls, the amount invested per child increases. This second demographic dividend, said Lee, can help somewhat offset the decline in support ratio that comes in the third phase of the age transition – aging.
One response to the increased costs of an aging population, said Lee, is to reduce consumption in proportion to the decline in the support ratio. Another option would be adding more hours to the work day or pushing the retirement age back. In the United States, Lee said that to offset the declining support ratio entirely by postponing retirement would require postponement by eight years up to 2050, and 10 years by 2085.
Brazil, Lee said, is the “world champion” of pension generosity, where pensions make up 12 percent of the GDP. The United States, by contrast, relies on asset income from physical or financial investments for about two-thirds of its retirement income. Brazil’s challenge, when it begins to feel the effects of aging (it is still relatively young), will therefore be much greater than in the United States.
A “New Lens” on Aging
Aging, Hoskins said, is not the “catastrophe” that it has been portrayed to be in the media. Supporting an aging population is “something we can plan for and handle,” he said. It is possible “to do the right thing to make sure citizens have a decent life.” The problems come when a country waits too long or does not plan at all, such as in Nigeria and the Philippines where, Hoskins said, they have very underdeveloped social protection systems and the elderly have little to no income. Mason and Lee’s analysis of the work/consumption ratio, said Hoskins, offers a “new lens” into how the world will deal with aging.
Sources: Los Angeles Times, National Transfer Accounts, UNFPA, World Bank.
Image Credits: “Elderly couple – Meiji-jingu,” courtesy of flickr user Tom Spender. Chart courtesy of Ronald Lee and Andrew Mason, National Transfer Accounts. -
Watch: Frederick Burkle on Lessons from Haiti and Professionalizing Humanitarian Assistance
›April 20, 2011 // By Schuyler Null“Haiti – in terms of coordination – was a debacle,” said Frederick Burkle, senior fellow with the Harvard Humanitarian Initiative and a visiting scientist at the Harvard School of Public Health. Burkle, who is also a senior public policy scholar at the Wilson Center, said that after the 2010 earthquake, “the large majority of people who showed up were under the age of 30 and this was their first disaster event.”
As a result, “best practices did not necessarily occur,” Burkle said. “Ninety-five percent of the work is probably done by 45 of the major NGOs,” but, he said, the number of “mom-and-pop shows” and other small NGOs in “The Republic of NGOs” is in the thousands.
Non-healthcare providers ended up providing services that they were not trained to provide – even amputations, Burkle said. “We certainly relish the humanitarian spirit of those who show up, but we have to have some coordination to ensure that best practices occur and that it goes in the right direction.”
“The professionalization blueprint really calls for courses, curriculum, and best practice standards,” said Burkle. The Harvard Humanitarian Initiative is working with the UN Office for the Coordination of Humanitarian Affairs, World Health Organization, and others to provide these resources.
“There’s a movement afoot within the humanitarian community itself to finally professionalize the humanitarian profession,” Burkle said, spurred on, in part, by the poorly coordinated responses to events like the Haiti earthquake. -
Our Shared Future: Environmental Pathways to Peace
›Download Our Shared Future: Environmental Pathways to Peace from the Wilson Center.
How does globalization affect natural resource issues such as water on local, national, and international levels? Can our common dependence on these stressed resources be a force for bringing people together rather than dividing us? What lessons can we learn from sharing insights from communities at these very different levels of organization?
Pathways to Peace
In January 2010, the Woodrow Wilson International Center for Scholars and the Fetzer Institute invited 22 scholars and practitioners to a two-day seminar to discuss these questions and the deep connection between caring for the environment and caring for community. Pathways to Peace: Defining Community in the Age of Globalization was the second seminar in a three-year initiative to combine scholarship, public policy, and local practice to articulate and support global conflict transformation and reconciliation in communities throughout the world. Examining the effect of environmental peacebuilding on communities, the discussion explored how governments, NGOs, the private sector, and other interested parties can generate positive outcomes while minimizing negative ones.
Participants from Canada, Ecuador, Ethiopia, Israel, Kenya, Nepal, Switzerland, the Philippines, and the United States brought to the table a wide range of experience and expertise from diverse fields, including peacebuilding, community building, health care, economic development, conflict resolution, and foundation management. By convening leaders in environmental peacebuilding and community building, the Wilson Center and the Fetzer Institute drew on a wide range of experience and perspectives related to environment, conflict, and peacebuilding practice and research. The group used water access and peacebuilding case studies as a means to enter into dialogue about the challenges of global community engagement.
Shared Waters
In preparation for the seminar, geographer and renowned water expert Aaron Wolf of Oregon State University contributed a paper, “The Enlightenment Rift and Peacebuilding: Rationality, Spirituality, and Shared Waters,” in which he laid out the complicated, sometimes conflictual, and often surprisingly collaborative aspects of negotiations over water resources. For Wolf, given water’s life-sustaining quality but limited quantity, it seems intuitive that “water should be the most conflictive of resources.” However, he maintains that “while press reports of international waters often focus on conflict, what has been more encouraging is that, throughout the world, water also induces cooperation, even in particularly hostile basins, and even as disputes rage over other issues…there is a long, and in many ways deeper, history of water-related cooperation.”
On this foundation, Wolf illustrates four stages of water conflict: from adversarial, to reflective, to integrative, to action. Lessons from the “spiritual understanding of water conflict transformation” he says, “offer not only new understanding of current disputes, but also models, tools, and strategies for more effective water conflict management and transformation.”
Seminar participants used Wolf’s paper as a starting point from which to write short papers based on their own expertise and experience. From Kenya to Nepal to Harlem, participants shared their perspectives on the challenges and promises of environmental issues, community building and organizing, and peacebuilding.
This report, Our Shared Future: Environmental Pathways to Peace, draws from the rich dialogue of the seminar and seminar papers to share the broad range of experience and the insight of the participants. To learn more about these remarkable programs and the people working on natural resources, peacebuilding, and community development, see the complete list of papers on page 120, which can be downloaded from the Wilson Center. -
Integrating Development: A Livelihood Approach to Population, Health, and Environment Programs
›Rural communities in developing countries understand that high population growth rates, poor health, and environmental degradation are connected, said Population Action International’s Roger-Mark De Souza at a recent Wilson Center event. An integrated approach to development – one that combines population, health, and environment (PHE) programs – is a “cost-effective intervention that we can do very easily, that responds to community needs, that will have a huge impact that’s felt within a short period of time,” said De Souza. “This is how we live our lives, this makes sense to us – it’s completely logical,” community participants in PHE projects told him.
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Carl Haub, Behind the Numbers
UN Releases Early Results of Global Population Projections
›April 18, 2011 // By Wilson Center StaffThe original version of this article, by Carl Haub, appeared on the Population Reference Bureau’s Behind the Numbers blog.
The United Nations Population Division has released preliminary results of its biennial series of population projections for the world’s countries for the 2010 revision. The projections are expected to be finalized later this month.While the global population for 2010 — 6.873 billion — is slightly lower than estimated in the 2008 revision (6.909 billion), the projected population for 2050 is now higher at 9.295 billion compared with the previous 9.150 projected in 2008. That can also be compared to the 2050 population of 9.485 billion on PRB’s 2010 World Population Data Sheet and 9.256 billion in the International Data Base of the U.S. Census Bureau.
The 2010 UN projections differ from the previous series in two significant ways. First, the projection horizon has been extended to 2100, quite far into the future. Second, the UN no longer assumes a uniform “ultimate” level of the total fertility rate (TFR) for all countries, such as the 1.85 level in its medium variant. Instead, multiple possibilities for each country’s TFR are projected with a probabilistic method based on fertility trends for the 1950-2010 period. Then, the median path of those “tracks” serves as the projected TFR for the medium variant series. The high and low variants, however, will be projected as in the past. Those variants have used an “ultimate” TFR of 2.35 and 1.35 for all countries, respectively.
The projected population of sub-Saharan Africa (SSA) in 2050, the world’s region with by far the largest potential for population growth, is now 1.963 billion, up from 1.753 in the 2008 UN projections. But, since the projections now run to 2100, we can now see beyond mid-century. By 2100, the UN projects that SSA would total an eye-popping 3.4 billion, nearly four times its present size and still be growing by 0.7 percent per year, adding 2 million annually at that time!
Continue reading on Behind the Numbers.
Sources: Population Reference Bureau, UN Population Division, U.S. Census Bureau.
Chart Credit: Data from UN Population Division, created by Schuyler Null. See full chart for interactive version (warning: it’s a lot of data – may slow or crash your browser). -
Climate Adaptation, Development, and Peacebuilding in Fragile States: Finding the Triple-Bottom Line
›“The climate agenda goes well beyond climate,” said Dan Smith, secretary general of International Alert at a recent Wilson Center event. “In the last 60 years, at least 40 percent of all interstate conflicts have had a link to natural resources” and those that do are also twice as likely to relapse in the five years following a peace agreement, said Neil Levine, director of the Office of Conflict Management and Mitigation at USAID. [Video Below]
Development, peace, and climate stability are “the triple-bottom line,” said Smith. “How would you ever think that it would be possible to make progress on one, while ignoring the other two?” Levine and Smith were joined by Alexander Carius, managing director of Adelphi Research, who pointed out that climate change is both a matter of human security and traditional security. For example, as sea-level rise threatens the people of small-island states, “it also affects, in a very traditional sense, the question of security and a state’s sovereignty,” he said.
The Triple-Bottom Line
Conflicts are never attributable to a single cause, but instead are caused by “a whole pile-up, a proliferation, a conglomeration of reasons” that often include poverty, weak governance, traumatic memory of war, and climate change, said Smith. “Climate adds to the strains and the stresses that countries are under,” and works as a “risk-multiplier, or conflict multiplier,” he said.
Focusing development and peace-building efforts on those regions experiencing multiple threats is both a “moral imperative” and a “self-interested imperative,” said Smith. “We benefit from a more prosperous and a more stable world.”
There are currently one and a half billion people in the world living in countries that face these interlinked problems, said Smith, “and interlinked problems, almost by definition, require interlinked solutions.” Responding to the needs of these people requires developing resiliency so that they can respond to the consequences of climate change, which he called “unknown unknowns.”
“What we need are institutions and policies and actions which guard us not only against the threats we can see coming… but against the ones we can’t see coming,” said Smith. The strength and resilience of governments, economies, and communities are key to determining whether climate events become disasters.
Interagency Cooperation
“Part of making the triple-bottom line a real thing is to understand that we will have to be working on our own institutions, even the best and most effective of them, to make sure that they see the interlinkages,” said Smith.
But even though individuals increasingly understand the need to address security, development, and climate change in an integrated fashion, “institutions have only limited capacities for coordination,” said Carius. Institutions are constrained by bureaucratic processes, political mandates, or limited human resources, he said. “Years ago, I always argued for a more integrated policy process; today I would argue for an integrated assessment of the issues, but to…translate it back into sectoral approaches.”
Levine expressed optimism that with “a whole new avalanche of interagency connections” being established in the last few years, U.S. interagency cooperation has become “the culture.” However, if coordination efforts are not carefully aligned to advance concrete programs and policies, they run the risk of “getting bogged down in massive bureaucratic exercises,” he said. “‘Whole of government’ needn’t be ‘all of government,’ and it needn’t be whole of government, all of government, all the time.”
Building Political Will
Europe has a “conducive political environment to making [climate and security] arguments,” said Smith, but the dialogue has yet to translate into action. In 2007, the debate on climate and security was first brought to the UN and EU with a series of reports by government agencies and the first-ever debate on the impacts of climate change on security at the UN Security Council, said Carius. However, none of the recommendations from the reports were followed and “much of the political momentum that existed…ended up in a very technical, low-level dialogue,” he said.
More recently, the United Kingdom included energy, resources, and climate change as a priority security risk in their National Security Strategy. And Germany, which joined the UN Security Council as a rotating member this year, is expected to reintroduce the topic of climate and security when they assume the Security Council Presidency in July. These steps may help to regain some of the political momentum and “create legitimacy for at least making the argument – the very strong argument – that climate change has an impact on security,” said Carius.
Sources: AFP, UK Cabinet Office, Telegraph, United Nations
Image Credit: “Trees cocooned in spiders webs after flooding in Sindh, Pakistan” courtesy of flickr user DFID -
Youth Bulge, Demography-Security Dialogue, and NATO
PRB Discussion on Population and National Security
›April 14, 2011 // By Schuyler NullThe Population Reference Bureau (PRB) held an online discussion this week with demographer Jennifer Dabbs Sciubba of Rhodes College on the topic of “Population and National Security.” On tap were questions on sex ratios, youth bulge, the definition of “national security,” whether the United States should be giving population and health-related advice, and other demographic security topics. Click through to PRB for the full transcript, or check out some select questions from ECSPers Richard Cincotta, Geoff Dabelko, and Schuyler Null below:
Richard Cincotta: Jennifer, my concern is with the lack of specificity that seems inherent in the youth bulge model in terms of civil and ethnic conflict. In other words, the highest probability of civil conflict (often protracted) is associated with very young populations – the Afghanistan, Iraq, sub-Saharan African situations. But, there is also a situation that arises among populations that are demographically somewhat older that is associated with democratization (i.e., the North African situation). These seem to have been conflated by the press and political scientists, yet they are demographically and politically very different cases. Any thoughts on how to recognize these and separate them?Jennifer Dabbs Sciubba: Rich, I think that until we have a stronger theoretical foundation for understanding the conditions under which a “youthful” population leads to civil conflict (very young pop) or democracy (slightly older pop) it will be hard to relay the difference in these two structures to non-experts. The democratization connection, in particular, needs to be refined to move firmly away from correlation and into causation. Right now, it seems to me that we give the same theoretical reasoning to both conflict and democratization (motive, cohort crowding). Do you agree?
Geoff Dabelko: Is the security community, so accustomed to framing issues as threats, internalize your messages about opportunity? Is there a recognition that low cost interventions such as provision of voluntary family planning services could be part of a holistic sustainable security approach? What are the steps that would need to happen to gain more adherents to this perspective?
(Editor: Read more discussion between Cincotta and Sciubba here and here)Sciubba: I’m sorry to say, but no, not really. The positive perspective does not resonate much because most in defense and intelligence are tasked with imagining the worst-case scenario. Opportunities and happy stories just do not fit in this paradigm (or even most of their job descriptions). I’ve tried to figure out what needs to happen to get them to pay attention to prevention, and the only place I see some chance of breaking through is in discussing Afghanistan. Many realize the challenges posed by Afghanistan’s young and growing population and there is some recognition that family planning may be relevant there. I think that for a paradigmatic shift to occur, it would have to be top-down – the vision of the President, Secretary of Defense, etc.
Dabelko: What would be the benefits of demographers and population experts taking more seriously a dialogue with the security community? Your book shows why security sector actors should pay attention to demography. Why should demographers pay attention to security?Sciubba: Some in the security community don’t necessarily understand the assumptions behind demographic projections or other aspects of the data, which means they sometimes misuse the info or distrust it and discard it all together. I also think that scholars of any discipline have a responsibility to understand how their work is being used.
Dabelko: What will be the subject of your next book?Sciubba: I’ll be returning to the politics of population aging. I’m particularly interested in comparing how different regime types have dealt with these issues, including not just Western European states, but also states like Singapore and Russia.
Schuyler Null: There’s been a lot of talk about how aging populations in Europe will affect defense sectors there, in terms of shifting budget priorities. But there’s also the aspect of how aging might affect European decision-making processes when it comes to foreign intervention (perhaps less willing put boots on the ground, stay for long, etc.).
Can you speak to how aging might affect the decision-making process and behavior of European countries when it comes to conflict in the future? How might aging affect the operation of NATO or the UN?Sciubba: Isn’t France a puzzle right now given your question? France, a low fertility country with an aging population and HUGE challenges ahead in terms of paying for entitlements to seniors, has recently shown a greater willingness to contribute to military missions. There is no doubt that aging states in Europe will be under strain trying to meet their promises to seniors and also maintain defense. But, European states still feel that there are sufficient threats in the world to warrant maintaining a military. They are trying to reduce redundancies among themselves and increase their efficiency – great cost-saving measures. Technology can compensate a bit as well. I think European states are willing to use their militaries when the threat is sufficient. Aging, however, may raise the threshold for what qualifies as “sufficient” and US-European opinions on what qualifies may increasingly diverge.
See the full transcript of questions and Sciubba’s responses at the Population Reference Bureau. -
Madagascar, Past and Future: Lessons From Population, Health, and Environment Programs
›In Madagascar, “today’s challenges are even greater than those faced 25 years ago,” said Lisa Gaylord, director of program development at the Wildlife Conservation Society. At an event at the Woodrow Wilson Center on March 28, Gaylord and her co-panelists, Matthew Erdman, the program coordinator for the Population-Health-Environment Program at Blue Ventures Conservation, and Kristen Patterson, a senior program officer at The Nature Conservancy, discussed the challenges and outcomes of past and future integrated population, health, and environment (PHE) programs in Madagascar. [Video Below]
Nature, Health, Wealth, and Power
Gaylord, who has worked in Madagascar for nearly 30 years, gave a brief history of USAID’s activities on the unique island, which she called a “mini-continent.” She used the “nature, health, wealth, and power” framework to review the organization’s environment, health, and livelihoods programs in Madagascar and their results. Governance, she said, is the centerpiece of this framework, but this piece “maybe didn’t have an adequate foundation” in Madagascar to see the programs through the political crisis.
Though its programs started at the community level, Gaylord said USAID’s objective was to scale up to larger levels. “You can’t always work on that level and have an impact,” she said, and there was “tremendous hope” in 2002 for such scaling up when Madagascar elected a new president, Marc Ravalomanana.
Unfortunately, changes in funding, a lack of economic infrastructure, and poor governance forced development programs to scale down. After President Ravalomanana was overthrown in a military coup in 2009, the situation got worse – the United States and other donors pulled most funding, and only humanitarian programs were allowed to continue.
“What worries me is that I think we have gone back” to working on a village level, Gaylord said. “We want to go up in scale, and I think that we felt that we could in Madagascar, but that’s where you have the political complexities that didn’t allow us to continue in that direction.”
Going forward, Gaylord said that it is important to maintain a field-level foundation, take the time to build good governance, and maintain a balance in the funding levels so that no one area, such as health, dominates development activities.
Living With the Sea
Based in southwestern Madagascar, the Blue Ventures program began as an ecotourism outfit, said Erdman, but has since grown to incorporate marine conservation, family planning, and alternative livelihoods. One of its major accomplishments was the establishment of the largest locally managed marine protection area in the Indian Ocean, called Velondriake, which in Malagasy means “to live with the sea.” This marine area covers 80 kilometers of coastline, incorporates 25 villages, and includes more than 10,000 people. The marine reserves for fish, turtles, and octopus, as well as a permanent mangrove reserve, protect stocks from overfishing.
One of the biggest challenges facing the region is its rapidly growing population, which threatens the residents’ health and their food security, as well as the natural resources on which they depend. More than half the population is under the age of 15 and the infant and maternal mortality rates are very high, Erdman explained. Blue Ventures, therefore, set up a family planning program called Safidy, which means “choice” in Malagasy.
“If you have good health, and family size is based on quality, families can be smaller and [there will be] less demand for natural resources, leading to a healthier environment,” said Erdman.
The region’s isolation and lack of education and health services are a challenge, said Erdman, but over the past three years, the contraceptive prevalence rate has increased dramatically, as has the number of clinic visits. The program uses a combination of clinics, peer educators, theater presentations, and sporting events, such as soccer tournaments, to spread information about health and family planning.
A Champion Community
“There is a long history of collaborative work in Madagascar,” Patterson said. Focusing on the commune (county) level, she worked in conjunction with USAID, Malagasy NGOs, and government ministries to try to scale up PHE programs in Madagascar’s Fianarantsoa province, which has a target population of 250,000 people.
“We essentially worked at two different levels,” said Patterson. At the regional level, a coordinating body for USAID and local partners called the “Eco-Regional Alliance” met monthly. The “Champion Commune” initiative, which worked at local levels, had three main goals, she explained:
Though working in such remote areas is expensive, and all non-humanitarian U.S. foreign aid has been suspended since the coup, Patterson hopes that development programs will return to Madagascar. Pointing to its vast rural areas, she stressed the importance of integrated efforts: “The very nature of multi-sectoral programs is that they have the highest benefit in the areas that are most remote. These are the areas where people are literally left out in the cold.”- Create a strong overlap with neighboring communes;
- Promote activities that benefited more than one sector (such as reforesting with vitamin-rich papaya trees); and
- Capitalize on the prior experiences of Malagasy NGOs in implementing integrated projects to help build up civil society.
Image credit: “Untitled,” courtesy of flickr user Alex Cameron.
Sources: The New York Times, Velondriake.
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