The Unavoidable Nature of Population Ageing and the Ageing-Driven End of Growth – an Update for New Zealand

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Abstract

Despite overwhelming evidence to the contrary, many people still question the extent to which population ageing and the ageing-driven ending of growth will unfold more or less as projected. This is particularly so in New Zealand, where the population is still relatively youthful due to near-replacement fertility and many years of high per capita net migration gains. As elsewhere, however, the picture differs markedly at subnational level, with the populations of one-quarter of the nation’s 67 territorial authority areas (TAs) already (in 2017) having more than 20% aged 65+ years. Accompanying this trend, one-third of the nation’s TAs declined in population between 1996 and 2013, primarily because of net migration loss at young adult ages, but in the process accelerating their structural ageing. Taking a subnational approach, this paper explores the dynamics of population ageing across New Zealand’s TAs. We demonstrate that structural ageing is accelerating and that even excessively high levels of net international migration gain cannot be expected to appreciably reduce future structural ageing. We also show that over the period 2013–43 the majority of declining TAs will move from the old form of decline, caused by net migration loss exceeding natural increase, to a new form caused by the combined effects of net migration loss and natural decrease. The findings reinforce our central argument that the phenomenon of population ageing and the ageing-driven end of growth will not ‘go away’ and has urgent implications for matters such as rate-based local government infrastructure funding.

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Notes

  1. 1.

    In Australia, local governments facing disproportionate ageing, depopulation etc., can appeal through their state government apparatus for ‘disability’ (relativity) funding to enable them to provide ‘equivalent services, irrespective of their ability to do so’. This is enshrined in the Local Government [Financial Assistance] Act 1995 (Department of Infrastructure and Regional Development 2016).

  2. 2.

    Statistics New Zealand has recently released updated subnational population projections. We use instead the earlier set of projections, which are comparable with the stochastic population projections we present later in the paper.

  3. 3.

    These territorial authority areas represent one of each trend (growth/decline) in two contiguous, strongly growing Regional Council areas: the Bay of Plenty, and Waikato. Additional detail is available in the SmartGrowth (Bay of Plenty) and FutureProof (Waikato) Reports. See Jackson et al. (2014a, b), and Cameron et al. (2014). While we would have preferred to use stochastic projections for the entire analysis, we note that these are not yet available. Stochastic subnational population projections are being developed by Statistics New Zealand, but until they are available we are dependent on those we have developed ourselves for other purposes. Unfortunately, these can provide only a limited insight into the situation because we have not yet developed a full set that constrains to the national level.

  4. 4.

    This is different to Richard Easterlin’s (1987) argument which pertains to America’s experience of the Baby Boom and differs from that of New Zealand (Pool 2007). High/low birth rates alone do not necessarily deliver large/small cohorts, as this outcome also depends on the number of people at reproductive age.

  5. 5.

    Strengthening from −0.840 to −0.973 between 2013 and 2043, the correlation between natural increase and the proportion aged 65+ years in each TA is, as might be expected, strongly negative (the higher the proportion aged 65+ years, the lower the natural increase).

  6. 6.

    Waimate District is projected to have a slightly higher per capita net migration gain per year and a slightly higher TFR than Waitaki District (Statistics New Zealand 2015b, 2015d).

  7. 7.

    It should also be noted that between 2013 and 2018 the number of TAs projected to decline, 12, represents a halving of the number which were observed to decline between 1996 and 2013, and is driven by Statistics New Zealand’s very high net migration assumptions for the 2014–2018 period. Net international migration as indicated by Permanent and Long Term (PLT) migration for the period 2013–15 exceeds the projection assumption and thus it is indeed likely that such gains will be realized, at least nationally. At subnational level, however, they are also impacted upon by internal migration, and the international PLT movements give no insight into the current strength or otherwise of those internal flows.

  8. 8.

    Specifically, we calculate the index here as:

    E = (P + S) 2 /(99S – P)

    Where E is the Index of Efficiency, P is the population aged under 65 years, and S is the population aged 65 years or older.

  9. 9.

    Revised McDonald and Kippen 1999, p. 14.

  10. 10.

    Consider the formula for the Index of Efficiency in footnote 9. As the proportion of the population aged 65 years and over increases (holding total population constant), the denominator (99S – P) gets larger leading to a smaller value for the index.

  11. 11.

    The stochastic population projections model does not allow for the addition of absolute net migration, as the model is based on net migration rates, rather than numbers (Cameron and Poot 2010).

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Acknowledgements

Work on this paper was supported by a New Zealand Royal Society Marsden-Funded programme of research: The subnational mechanisms of the ending of population growth. Towards a theory of depopulation. (Contract MAU1308). Māori title and interpretation: Tai Timu Tangata: Taihoa e? (The ebbing of the human tide. What will it mean for the people?). We are most grateful to three anonymous reviewers for their insights and suggestions. Any errors remain our own.

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Correspondence to Natalie Jackson.

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Jackson, N., Cameron, M.P. The Unavoidable Nature of Population Ageing and the Ageing-Driven End of Growth – an Update for New Zealand. Population Ageing 11, 239–264 (2018). https://doi.org/10.1007/s12062-017-9180-8

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Keywords

  • Population ageing
  • Subnational ageing
  • Ageing-driven growth
  • Natural decrease
  • Depopulation