Week 2: Past Trends and Future Trends, Demographic Transition Model and Demographic Dividends

Japan: TFR 2024

TFR 2024 = 1.37, far below replacement.

Japan: Mean age at first birth

Mean age at first birth in 2022 = 32.2.

Japan: Causes of fertility decline

Age at marriage rising; unstable jobs; unattractive marriage package; rising childrearing costs.

Japan: Longevity 2024

Males 81.1, Females 87.14, overall 85.15 years.

Japan: Natural change 2022

Natural change = -4.6 per 1,000 population.

Japan: Population structure 2024

0–14: 11.1%, 15–64: 59.6%, 65+: 29.3%.

Japan: 2050 elderly projection

Elderly share projected to exceed 38% by 2050.

Japan: Speed of ageing

Japan aged from 7%→14% elderly in just 24 years.

Japan: Migration impact

Only ~1.8% of population are migrants; rules tight; small demographic effect.

Key insight on Japan ageing

Japan shows ultra-rapid ageing → higher fiscal costs, pension shortages, care shortages, slow growth, fewer young workers.

Singapore: TFR 2024

TFR 2024 = 0.97, among the world’s lowest.

Singapore: Life expectancy 2024

Life expectancy 84.19 (M: 82.3, F: 86.5).

Singapore: Old-age support ratio

Support ratio fell from 13.5 (1970) to 3.5 (2024).

Singapore: Median age trends

Median age rose from 19.5 (1970) → 42.8 (2024).

Singapore: Drivers of ageing

Declining TFR, rising life expectancy, insufficient migrants.

Singapore: Demographic challenge

900k+ baby boomers turning 65 since 2012; resident labour force shrinking; migration restrictions since 2013 worsen outlook.

Global ageing: Who ages fastest?

Developed countries age fastest; by 2050, 1 in 4.5 will be 60+; support ratio falls from 12→4.

Global ageing: Developing countries

Developing countries face compressed transitions, giving little time to adjust.

Ageing within elderly population

80+ group grows far faster than 60+; 80+ rises from 86m (2005) to 394m (2050).

Ageing within workforce

Share of 50+ workers rises; by 2050 older workers dominate; fewer young workers.

Ageing and labour force growth

Ageing shrinks working-age population and lowers LFPR of elderly; Japan/Germany negative LF growth; ASEAN/India/LatAm healthy.

DTM: Stage 1

High fertility & mortality; small stable population.

DTM: Stage 2

Mortality falls; fertility remains high; population boom.

DTM: Stage 3

Fertility declines due to urbanisation, education, female labour force; growth slows.

DTM: Stage 4

Low fertility & mortality; population stabilises but older.

DTM: Stage 5

Ultra-low fertility; population begins to decline.

Demographic dividend concept

Declining fertility temporarily creates favourable age structure with more workers per dependent.

Dividend mechanism: labour

Fewer children → higher female labour force participation, but requires job creation.

Dividend mechanism: savings

Fewer dependents → higher savings → investment.

Dividend mechanism: human capital

Fewer children → more resources per child → higher human capital.

East Asia miracle growth

1965–1990: per capita income >6% annually; demographic transition explained 25–40%.

Critical insight on demographic dividend

Dividend is temporary; low fertility eventually creates a demographic tax.

Lutz (2010): Reasons for fertility decline

Decline due to fewer potential mothers, changing norms and ideal family size, higher aspirations & income uncertainty.

Lutz: Immigration & ageing

Immigration cannot stop ageing; only slow it.

Lutz: Education & population size

Education/human capital can offset smaller populations; optimal TFR can be <2 with high human capital.

Mamolo & Scherbov: Why new measures

Chronological age measures ignore changing health/longevity conditions.

Mamolo & Scherbov: RLE15

RLE15 = share of population with <15 years of remaining life.

Mamolo & Scherbov: Implication of rising life expectancy

With longer life expectancy, ageing may be less severe than traditional chronological measures imply.