SOME DEMOGRAPHIC IMPLICATIONS OF THE GLOBAL ECONOMIC CRISIS: A
CHALLENGE FOR AUSTRALIA
byGraeme Hugo
University Professorial Research FellowProfessor of Geography and Director of the National Centre
for Social Applications of GIS,The University of Adelaide
Presentation to Marketing Week, Holiday Inn, Adelaide
25 August 2009
Outline of Presentation • Introduction• The Economy and Population: A Complex
Relationship• Recent Developments in Australia’s Population
Population Growth- Mortality- Fertility- Migration
Population CompositionPopulation Distribution
• Impacts of the GFC- Fertility- Immigration- Effects on Baby Boomers
• Challenges and Opportunities• Conclusion
Population and Marketing
• Marketing is for people. Usually it is targeted at particular groups of people
• Demand for goods and services is a function of…- need or perceived need, influenced by stage of lifecycle, ethnicity, socioeconomic status etc- availability- ability to purchase or affordability
• Population information is important because it tells us about the numbers, characteristics and locations of population
Population and the Economy
• Complex two way relationship• Over simplified in the
Australian context because periods of rapid growth have coincided with periods of economic growth – eg post war baby boom
• Rapid population growth is not always good for the economy
• Population growth is not just a function of the economy
“Over the next couple of decades nothing will impact OECD economies more profoundly than demographic trends and, chief among them, ageing”
Jean-Philippe CotisChief Economist, OECDMarch 2005
The Treasury Has Discovered Population
• Intergenerational Report 2002
• Intergenerational Report II 2007
• Productivity Commission Report on Ageing 2005
Migration and the Economy
• Also a complex relationship• Much discussion• In Australia most studies
concluded that economic impact of migration positive or at worst benign
• No evidence that locals are displaced from jobs by migrants
• Myths about economic impacts of migration
Contribution of Migrants to the Economy
• Supply particular skills, contribute to increasing productivity
• Also fill low skilled jobs eschewed by Australians (e.g. agriculture)
• Important part of risk taking, entrepreneurial groups
• Crucial in developing economic linkages with origin countries
The Selectivity of Migration
• Migrant populations are never representative of the populations in origin or destination
• Migration is generally selective of the more educated, more skilled, risk takers and entrepreneurs
• Migration selectivity policy also can exacerbate these tendencies by setting particular criteria – eg Australian points system
• Hence migrants to Australia disproportionately represented in BRW 100 most wealthy Australian
Higher Degree Qualification by Australia- and Overseas-Born, 1981-2006
Source: 1981 to 2001 Census One Percent files, ABS 2006 Census
Year Australia-born Overseas-born
Percent of All Higher Degree Overseas-Born
1981 0.44 0.97 43.51986 0.53 1.21 44.21991 0.72 1.58 44.91996 1.07 2.3 44.92001 1.35 3.22 47.42006 1.46 4.59 49.0
Migration and Entrepreneurialism
• Entrepreneurs well represented
among migrants in early post war
decades
• Australian migration had become
more concentrated on skill as
defined by formal qualifications
Australia: Migration Program Outcomes by Stream, 1989-90 to 2008-09
Source: DIAC Population Flows: Immigration Aspects, various issues
How Do Entrepreneurs Migrate to Australia?
• Business Migration Categories –
established entrepreneurs with large
capital assets
• Refugee – Humanitarian Categories
Examples of Vietnamese, recent
African migrants
Pre Crisis Population Trends in Australia
• Rate of growth of population (2008) –
1.91%
Highest since 1971
• High level of immigration (2007-8) –
149,365.
Highest since 1969-70
Projections of the Population of Australia Source: ABS Estimated Resident Population data and Projections 2008
ABS 2005 ABS 2008
2006 Actual 20.7 20.72007 Actual 21.0 21.02021 Projected 23.9 25.62051 Projected 28.0 34.2
Series B
Contemporary Population Growth Rates (% pa) Source: ESCAP 2008; Population Reference Bureau 2007 and 2008; ABS 2008
Population Growth
• Natural Increase – Births-Deaths
• Net Migration – Inmigration-Outmigration
Australia: Total Population Growth Showing the Natural Increase and Net Migration Components, 1901-2008
Source: ABS 1986 and ABS Australian Demographic Statistics, various issues
-100,000
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,0001
90
1
19
06
19
11
19
16
19
21
19
26
19
31
19
36
19
41
19
46
19
51
19
56
19
61
19
66
19
71
19
76
19
81
19
86
19
91
19
96
20
01
20
06
Year
Pe
rso
ns
Natural Increase
Net Migration
Australia: Expectation of Life at Birth, 1870-2007Source: Hugo 1986 and ABS Deaths Bulletins
Expectation of Life at Birth
Males Females
1947 66.1 70.6
2007 79.0 83.7
Australia: Expectation of Life at Age 50, 1901-1910, 1970-1972 and 2007
Source: ABS
Year Males Females
1901-1910 21.2 23.7
1970-1972 23.0 28.3
2007 31.4 35.2
Persons Aged 65 Years and Over with Disabilities Source: ABS 2005
Percent of Australians Overweight or Obese by Age and Sex, 2004
Source: ABS 2008
FertilityAustralia: Total Fertility Rate, 1901 to 2007
Source: CBCS Demography and ABS Births Australia, various issues
International Total Fertility Rates, 2005-10Source: ABS 2008 and United Nations 2009
Country TFR Australia 1.8New Zealand 2.0USA 2.1Indonesia 2.2China 1.7Italy 1.4Singapore 1.3Japan 1.3Russian Federation 1.4Greece 1.3
Total Fertility Rate(a)
Source: ABS 2007, Australian Social Trends
Australia: A Country of Immigration
• 24 percent born overseas• 26 percent Australia-born with an
overseas-born parent(s)
• 809,628 persons temporarily present at 30/6/08
• 206,135 incoming permanent settlers in 2007-08
• 56,575 “onshore” settlers in 2007-08
Australian Immigration Policy
• 1947-1971 – Permanent Settlement, Worker Recruitment
• 1971-1995 – Permanent Settlement – Skill, Family and Humanitarian
• 1995 – Report of the Committee of Inquiry Into the Temporary Entry of Business People and Highly Skilled Specialists
Permanent AdditionsSource: ABS 2007, Australian Social Trends; DIAC 2008
Permanent Additions by Eligibility CategorySource: ABS 2007, Australian Social Trends; DIAC 2008
2007-08
• 206,135 Incoming Permanent Settlers
(including Refugee,
Humanitarian and New Zealand permanent
migrants)
• 420,045 Granted Temporary
Residence
Australia: Permanent Arrivals and Departures, 1959-60 to 2007-08
Source: DIMIA Australian Immigration: Consolidated Statistics and DIAC Immigration Update, various issues
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
1959
-60
1961
-62
1963
-64
1965
-66
1967
-68
1969
-70
1971
-72
1973
-74
1975
-76
1977
-78
1979
-80
1981
-82
1983
-84
1985
-86
1987
-88
1989
-90
1991
-92
1993
-94
1995
-96
1997
-98
1999
-200
0
2001
-02
2003
-04
2005
-06
2007
-08
Year
Nu
mb
er
0
10
20
30
40
50
60
Per
cen
tag
e
Permanent departures Permanent arrivals Departures as % of Arrivals
Australia: 457s Present, Asia-born and Other, 1998 to 2008
Source: Khoo et al 2009 and DIAC Immigration Update, various issues
Overseas Students in Australian Universities, 1983-2007Source: DEST, Students: Selected Higher Education Statistics, various issues
South Australia:Age-Sex Structure, 2001 and 2006
Source: ABS 2006 Census Time Series Profile
60,000 40,000 20,000 0 20,000 40,000 60,000
0-45-9
10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-84
85+
Ag
e G
rou
p
Persons
2001 2006
Males Females
Population Composition
• Key to marketing
• Particular Significance of life cycle stage/age
• Other things also important
- ethnicity
- socio economic status
- education
• Composition is always changing, can be tracked
and anticipated
Australia: Age-Sex Structure of the Population, June 2006Source: ABS Estimated Resident Population data
200,000 150,000 100,000 50,000 0 50,000 100,000 150,000 200,000
0
10
20
30
40
50
60
70
80
90
100
Age
Persons
Males Females
Baby Boomers
Wittert, 2006
Baby Boomers 2006Source: ABS
Australia% of Population 25.7% of Workforce 41.8
• In Australia, without migration, the population would begin to decline from around 2030 and workforce ages would begin to decline in between 5 and 10 years from now
• Currently migration contributes 40 percent of workforce growth but this proportion will gradually start to increase so that during the 2010s it will start to contribute all growth of the workforce
Structural Ageing:Australia: Change by Age: 2006 – 2011; 2031 (Series B)
Source: ABS 2008 Projections
-20
0
20
40
60
80
100
120
140
160
180
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
85+
Age
Perc
enta
ge C
hange 2006-2011 (22.3 m)
2006-2031 (28.8 m)
Labour Force Age Groups and Dependency Rates
Source: World Bank, 2006
Changing Population Distribution
• One of the world’s most urbanised populations 87 percent living in urban areas
• 81.1 percent living within 50km of coast
• Most mobile population in the world
Changing Population DistributionShifts in the Australian Proportion Centroid, 1911-2006
Source: Australian Censuses, ABS 2003, 2004 and 2007
Every five years 42.3 percent of the population move house. Every year
17.0 percent move.
Australia: Distribution of Population Between States and Territories, Actual 1881-2006 and Projected 2051
Source: Rowland 1982, 25; ABS 2005 and 2007
1881 1947 2006 2051
New South Wales 33.3 39.4 32.9 31.0 Victoria 38.3 27.1 24.8 23.3 Queensland 9.5 14.6 19.8 24.5 South Australia 12.3 8.5 7.6 5.6 Western Australia 1.3 6.6 9.9 11.2 Tasmania 5.1 3.4 2.4 1.6 Northern Territory 0.2 0.1 1.0 1.2 Australian Capital Territory 0.0 0.2 1.6 1.4
Total percentage 100.0 100.0 100.0 100.0 Total number (million) 2.2 7.6 20.7 28.2
Australia: Changing Distribution of the Population Between Urban and Rural Sectors, 1921 to 2006
Source: Australian Censuses, 1921-2006
0
10
20
30
40
50
60
701
92
1
19
33
19
47
19
54
19
61
19
66
19
71
19
76
19
81
19
86
19
91
19
96
20
01
20
06
Year
Pe
r c
en
t o
f P
op
ula
tio
n
Metropolitan Non-Metropolitan Other Urban Rural
Australia: Population Change in Country Towns, 2001-2006 Source: Australian Censuses of 2001 and 2006
Impacts of the GFC
• Fertility• Immigration• Emigration• Effects on the Baby
Boomers
Fertility
• The TFR in Australia increased from 1.748 in 2003 to 1.931 in 2007
• Most of the increase in fertility was in the middle to higher socioeconomic areas
• The GFC could produce a reduction- Increased job insecurity- Confidence- Housing concerns- Debt concerns
• It could also produce stability- women using a downturn in the economy to spend time out of the workforce
Impacts of the Global Financial Crisis in Australia
• Decrease of 14 percent in skilled migration intake in 2009-10
• Increased return migration of Australian expatriates
• Reduction in immigration intake• Increased global pressure for migration• Changes in Talent Wars Scenarios• Problem of scapegoating of migrants
At times of economic downturn there is a tendency for countries to adopt
protectionist policies both with respect to trade and migration. While the response is understandable, the global experience
has not been that making substantial reductions in migration has not had the desired consequences for improving the economic prospects for local workers.
Why are Migrants Needed Even During the GFC?
• Skill shortages• Labour market segmentation• The value added effect of diversity in a
globalising world• The fact that they will be needed once
economic growth is restored and the ability to turn the migration tap on and off is limited
Need to Recognise Long Term Structural Causes of Migration
– Increasing global differentials in economy and
demography and the forces of globalisation
Advantages of Migration in a Globalising Economy
• Premium on skill in global economy• Migration communities ‘hard wire’
Australia into the global economy• All high income countries will be
competing for migrants. Australia’s experience of multiculturalism gives it a significant advantage
Average Household Net Worth by Age of the Household reference Person, 1994-2007, Australia
Source: Australian Bureau of Statistics, Newsletters - Age Matters - Issue Number 1, December 2002 and ABS 2007, p.37
Australia: Changes in Participation Rates of the Older Population in the Workforce,
1970-2009Source: ABS Labour Force Surveys
Percent Participation
May 1970 June 1999 May 2009
Age Group Males Females Males Females Males Females
55-59 91.5 28.7 72.9 44.1 77.7 63.2
60-64 79.2 14.9 46.9 17.6 58.7 42.7
65+ 23.2 3.6 9.7 3.2 14.7 5.6
Australia: Persons with No Superannuation Coverage, 2007
Source: ABS 2009, 18
Australia: Persons with Superannuation in the Accumulation Phase, Total Superannuation
Balance, 2007Source: ABS 2009a, 19
The Australian Population Dilemma
• In the short to medium term population growth is necessary to replace baby boomers in the workforce
• In the long term we must recognise the environmental constraints of Australia and their exacerbation by climate change
• In the short term also need to adapt to the global financial crisis
Conclusion
• Australia is better placed demographically than other OECD nations to deal with the recession
• However policy with be crucial• We need to have a national
discourse on the future of Australia’s population in order to develop short term, medium term and long term goals
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