The country level: sustainability and age structure

1. The country level:sustainability and age structure • The most important issue that links age structure to potential problems of sustainability is the pension system • The equilibrium of a pay-as-you-go pension system depends on the fact that the total amount of contributions is equal to the total amount of pensions paid in any given year

2. The country level:sustainability and age structure • Demographically, this depends on the stability of the ratio between population in working age and population in retirement age • ‘Support ratio’: how many persons aged 15-64 are there for a person aged 65 and over?

3. ‘Support ratio’ Italy, Germany, Spain,UN projections 2002

4. The country level:sustainability and age structure • If the support ratio decreases, solutions: • Increase retirement age • Increase labour force participation (i.e. of women) • Decrease level of pensions • Increase level of contributions • At the level seen, the development is not sustainable

5. The country level:sustainability and age structure • The main reason is the decrease in fertility • Second reason the increase in longevity

6. TFR (number of children per woman) Italy, Germany, Spain

7. Life expectancy at age 65 Italy, Spain (women)

8. The country level:sustainability and age structure • “Lowest-low” fertility, defined when the average number of children per woman in a year (“period” TFR) drops below 1.3 has emerged in Europe in the 1990s (Kohler, Billari, Ortega, 2002) • Forerunners: Italy & Spain. Then Central & Eastern Europe, Former USSR

9. The country level:sustainability and age structure • Long-term sustainable solution: • Increase in fertility combined with • Increase in immigration • To be in equilibrium, TFR should be close to 2.1 (e.g. 1.8) and immigration compensate for the difference (close to U.K., U.S. solution) • Of course, in the meanwhile medium- short-term solutions

10. Net migration rate (% of the population) Italy, Spain

11. The global level • World’s population is at a level that has never been reached in the past • Today’s counts are pretty close to 6.4 billion individuals (U.S. Census Bureau World Population Clock) • Is population a “bomb”?

12. The global level Billions 12 11 2100 10 9 Modern Age Old 8 Iron Middle Bronze Stone Age New Stone Age Ages Age Age 7 Future 6 2000 5 4 1975 3 1950 2 1900 1 1800 Black Death — The Plague 2000 1+ million 7000 6000 5000 3000 1000 A.D. 4000 A.D. A.D. A.D. A.D. A.D. years B.C. B.C. B.C. B.C. B.C. B.C. B.C. 1 1000 2000 3000 4000 5000

13. The global level • Maybe pure growth problems are not the most relevant ones for the future • The demographer Wolfgang Lutz and colleagues in 2001 (‘Nature’) proclaimed ‘The end of world population growth’

14. The global level

15. Modeling population dynamics • Population dynamics can be modeled in simple but meaningful and didactical ways • Exponential growth • Logistic growth • Logistic growth with time-varying carrying capacity

16. Exponential growth • T.R. Malthus (1766-1834) • 1798: An Essay on the Principle of Population • “…the human species would increase in the ratio of -- 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, etc. and subsistence as -- 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, etc.”

17. Exponential growth • The “Population Bomb”

18. Exponential growth

19. Logistic growth • Back to Malthus (a different reading): • “…That population cannot increase without the means of subsistence is a proposition so evident that it needs no illustration...” • Pierre Verhulst (1845): logistic growth. Population cannot grow above a certain level (‘carrying capacity’)

20. Logistic growth (discrete time) • Explicit modeling of the carrying capacity (K) • Limits to growth • K is an asymptote • Note: potential chaotic dynamics (Robert May, ‘Nature’, 1976)

21. Logistic growth (discrete time)

22. Logistic growth with time-varyingcarrying capacity • The realism of the model can be improved, including ‘demographic transitions’ • K may vary over time because e.g. of innovation

23. Logistic growth with time-varyingcarrying capacity

24. Deevey’s (1960) graph(Scientific American – note the log scale)

25. …real data on the log, log scale

26. Modeling environmental impact and population • Paul Ehrlich and John Holdren (1971), “Impact of Population Growth”, Science; also Barry Commoner • IPAT Model

27. I=PAT • Environmental impact (I) is a function of: • Population (P) • Affluence (A) • Technology (T) • In fact, • A is usually expressed as production per capita (Y/P) • T is usually expressed as impact per unit of production (I/Y)

29. I=PAT • This model can be used to decompose the role of the three factors (P, A, T) in shaping environmental impact • E.g. Energy use • Technology (& technology transfers) are the keys to reduce environmental impact!

30. I=PAT (McKellar et al., 1995)

31. Bibliography • Joseph A. McFalls Jr., 2003, Population: a lively introduction, Population Bulletin, 58, 3, Population Reference Bureau, Washington D.C. • Massimo Livi Bacci, 2001, A Concise History of World Population, Blackwell Publishing, Malden • World Commission on Environment and Development, 1987, Our Common Future, Oxford University Press, Oxford • Luis Rosero-Bixby & Alberto Palloni, 1998, Population and Deforestation in Costa Rica, Population and Environment, 20: 149-185 • Richard Jackson & Neil Howe, 2003, The 2003 Aging Vulnerability Index, Center for Strategic and International Studies and Watson Wyatt Worldwide, Washington, D.C.

32. Bibliography • Kohler, Hans-Peter, Francesco C. Billari & José Antonio Ortega, 2002, The Emergence of Lowest-Low Fertility in Europe During the 1990s, Population and Development Review 28: 641-680 • Wolfgang Lutz, Warren Sanderson & Sergei Scherbov, 2001, The end of world population growth, Nature 412: 543-545 • Robert May, 1976, Simple mathematical models with very complicated dynamics, Nature 261: 459-467 • Edward S. Deevey Jr., 1960, The Human Population, Scientific American 203: 194-204 • Paul R. Ehrlich & John P. Holdren, 1971, Impact of population growth, Science 171: 1212-1217 • F. Landis MacKellar, Wolfgang Lutz, Christopher Prinz & Anne Goujon, 1995, Population, Households and CO2 Emissions, Population and Development Review 21: 849-865