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Publications I
MANAGING IRELAND'S FUTURE- 2005-2030
© 2005 Magill Summer School
Contents:
Chapter One
Managing the Future
The Future Demographic and Labour Market
AIDAN PUNCH, Central Statistics Office
Will There be Enough Children?
TONY FAHEY, Research Professor, Social Policy, ESRI
Have We A Coherent Political Vision?
MICHAEL McDOWELL TD, Minister for Justice, Equality and Law Reform
Slow Burners and Catalysts
PAT RABBITTE TD, Leader of the Labout Party
Achieving the Goals of 1916
NOEL DEMPSEY TD, Minister for Communications, Marine and Natural
Aidan Punch
Central Statistics Office
Born in Cork and educated at Colaiste Chriost Rν and UCC where he obtained a degree in Mathmatics and Statistics. Join ed the CSO as a statistician in 1972. Completed a Masters in Public Administration in UCD in 1986. Currently, Head of Population Statistics. Secretary to National Statistics Board on its foundation in 1986. Chair of European Population Committee 2002 and 2003.
President of Statistical Inquiry Society of Ireland.
The Future Demographic and Labour Market
The principal focus of the present paper is projecting the population of Ireland. This will draw on the work we have carried out in the Central Statistics Office (CSO) on national population and labour force projections and more recently on regional population projections . Some of the issues which will be touched on are the likely magnitude of the young, old and working age populations, the mix between Irish and foreignborn persons, labour market movements and regional projections.
The paper will also touch on related topics such as different household types, the changing urban/rural mix and commuting patterns. However, these will not be based on formal projection models but rather on observing past trends and postulating about the likely shape of future developments.
Looking at births first, what we really need to focus on is the number of women in the child bearing age groups and the fertility rates of these women, i.e., the average number of children per woman. The child-bearing age groups are essentially within the 15 to 49 year age range but it is really sufficient to focus on women aged 20-39 who account for over 90 per cent of all births. It is a popular misconception (no pun intended) that fertility in Ireland did not begin to decline until after 1980 whereas in fact the process had begun as far back as the mid-1960s. While the peak number of births (74,000) did occur in 1980 the total fertility rate had been in decline from its 1965 level of four children per woman to 3.2 by 1980 (it currently stands at two children per woman). The explanation lay in the fact that the increase in the number of women of child bearing age more than counterbalanced the decline in the fertility rate during the 1960s and 1970s. As to the future, the most likely scenario is that our fertility rate will approach that of our Northern European neighbours. Translated into numbers, this assumes that the total fertility rate will fall from its current level of 2 to about 1.85 by 2011 and remain constant thereafter. However, the projected increase in the number of women aged 20-39 will more than compensate for this assumed decline in fertility. The resulting average annual number of births over the next 25 years will probably be about 5 per cent higher than over the last quarter of a century.
The second ingredient in the mix is the number of deaths. Despite the continuing fall in the mortality rates of men and women in this country, life expectancy at birth in Ireland is still relatively low compared with many of our European neighbours. The 2002 figures stood at 75.1 years for males and 80.3 years for females compared with European highs of 79.0 (Iceland) and 83.6 (Spain), respectively. There is general agreement that the improvements in life expectancy will continue in the foreseeable future. For our population projections we have assumed that the average annual improvements observed over the past fifteen years or so will continue for the next thirty years. This will result in life expectancy at birth in 2030 being of the order of 81.5 for men and 86.0 for women narrowing but not eliminating the gap between ourselves and the best of the European countries.
The final component of the projections is net migration the difference between inward and outward migration. The graph illustrates the volatility of the situation over the past 25 years. The recent period will be familiar to most immigration averaging 55,000 a year, emigration averaging 25,000 a year over the past six years resulting in net inward migration of approximately 30,000 annually. However, we have to look no further back than the late 1980s to experience net emigration of over 40,000 a year. The recent situation is clearly linked to the strong performance of the Irish economy and labour force. However, what does the future hold in store? Certainly, the outlook in relation to migration has been altered by the experience of recent years to the extent that it now appears unlikely that net immigration will be reversed to any sustained degree in the coming decade or two.
Two migration assumptions were used. The highest of these (M1) assumed a continuation of net inward migration of 30,000 per annum for the next decade to be followed by 20,000 per annum for the following decade and finally by 15,000 per annum in the last five years to 2030. The present paper uses the results derived from this high migration scenario.
Population of 5_ million by 2030?
Most of the change in population over the last quarter of a century has been as a result of natural increase i.e. the excess of births over deaths. Births averaged 60,800 annually while deaths numbered about 33,000 each year leading to an annual natural gain in population of 27,800. As the earlier graph showed, net migration was outwards in the 1980s and early 1990s and strongly inwards ever since leading to a fairly neutral position over the last 25 years. In fact, over the entire 25 year period, net inward migration was a mere 11,000. Looking to the future, projected births and deaths over the next 25 years will not differ significantly from the corresponding earlier period. Births are projected to average around 63,300 annually with deaths averaging 32,400 eading to an annual natural increase in population of 30,900. However, migration is projected to differ markedly from that experienced in the past. The assumptions underlying the projections imply an annual average migration gain of about 25,000 over the next quarter of a century.
Using the above fertility, mortality and migration assumptions gives a projected population of 5_ million in 2030 compared with the present level of just over 4 million. To put matters into perspective this implies that the population is projected to grow by about 1.2 per cent on an annual average basis in the next 25 years compared with 0.7 per cent in the last 25 years.
It is worth dwelling on what the impact of the M1 migration assumption would be for the composition of our population 25 years hence. In a recent OECD study, Ireland ranked eleventh highest of twenty-six OECD countries in terms of percentage of foreign-born population (10.4% compared with an average of 7.8%) and eighth highest of twenty-three of the countries in terms of percentage of non-citizens (5.9% compared with an average of 4.5%). On the basis of the high migration assumption, the proportion of foreign-born persons could exceed 1 million by 2030 compared with 400,000 at the time of the 2002 census. This would equate to about 18 per cent of the population in 2030, higher than the present rate in the following high immigration countries: Sweden, United States, Germany and Austria; though lower than the present rates in Canada, New Zealand, Switzerland, Australia and Luxembourg.
In the absence of migration, the population would still continue to grow between now and 2030 albeit at a more modest rate of 0.6 per cent per annum close to what was achieved in the previous 25 years. It should be borne in mind that this 'modest' projection would still exceed the rates projected by Eurostat for all but two (Cyprus and Luxembourg) of the €25 member states!
An ageing population
The projections do not simply provide us with an estimate of the overall magnitude of the projected population; they also provide an indication of its likely age structure. Just over 30 per cent of the population was aged under 15 years in 1980 while the relevant proportion aged over 65 years was 10.7 per cent. At present, these percentages are 20.9 per cent and 11.2 per cent, respectively. By 2030 it is projected that the young will make up 18.8 per cent of the projected 5_ million population while older persons will account for 17.5 per cent of the total. By expressing the young and the old populations as a percentage of those aged 15 to 64 years (i.e. the socalled population of working age) we get an estimate of the age dependency of the population. This has fallen from 70 per cent 25 years ago to its present level of 47 per cent but is projected to increase again, mainly as a result of an ageing population, to reach a level of 55 per cent by 2030. We are thus at a very advantageous demographic stage at present with the situation projected to deteriorate somewhat into the future.
The labour market
The likely magnitude of the projected population of working age will clearly be a key determinant of the labour market into the future. Under the M1 migration assumption, this will increase from its present level of 2_million to 3_ million persons by 2030. However, the participation rates of persons of working age will also have a major role to play. In this regard it is necessary to distinguish between males and females. It is unlikely that there will be much change in the labour force participation of males aged less than 55 years while a tightening labour supply situation may result in a greater proportion of males aged 55 years and over continuing on in the labour force. The participation rates of females, especially those with children, are assumed to continue to increase. Despite the major gains in recent years these rates currently lag behind those of our Northern European neighbours.
The link between economic and labour force growth and migration is a critical one. Since the early 1990s, economic growth, as measured by GNP, has averaged about 5_ per cent per annum. Throughout this period, the labour force has grown at an annual average rate of over 40,000 (2.7 per cent per annum) while annual net inward migration has averaged 17,000. Looking to the next decade, the M1 migration scenario would allow labour force growth of 38,000 annually (1.8%) while zero net migration would constrain annual growth to around 17,000 (0.8%). The relationship between the labour force and migration is such that for every 10,000 shortfall in the projected labour supply an additional 15,000 immigrants would be required to bring supply and demand into balance.
Looking at the 25 year period to 2030, reliance solely on domestic demographic sources would slow average labour force growth to 9,000 (0.4%) per annum. The M1 migration scenario (net immigration of 30,000 per annum reducing to 20,000 and then 15,000) would yield annual labour force growth of 26,000 (1.2%). This would result in a labour force of 2.6 million in 2030 compared with 2 million at present with over two thirds of the increase coming in the first decade of this period.
The regional dimension
Inter-regional migration movements were both stable and predictable during the 1980s and 1990s they tended to be towards Dublin and the Mid-East from all other regions in the State. However, this pattern changed radically in recent years and culminated in a so-called 'over spill' situation whereby the net flow was outwards from Dublin to the Border, Mid-East, Midland and South-East regions. The main reason put forward for this was a shortage of affordable housing in Dublin. Making projections in such a changing environment is therefore fraught. For this reason, it was decided to focus on the period to 2021 only in the official projections.
The Dublin region will be the one whose population growth rate will be most affected by the differing internal migration assumptions. The growth rate will vary from 0.9 per cent for recent to 1.3 per cent for medium to 1.7 per cent for traditional. The Mid-East will grow at an average annual rate in excess of 2 per cent, while the West region will also gain population share, regardless of the internal migration variant chosen.
Living arrangements
Declining fertility, increased life expectancy and a greater propensity towards earlier household formation have seen the number of private households increase from 867,000 in 1979 to 1,280,000 by 2002 an increase of 47.6 per cent or 1.7 per cent per annum. Average household size declined steadily from 3.8 to 2.9 over the same period. Over two-thirds of all households had fewer than four persons in them in 2002 compared with just over a half in 1979. In particular, the proportion of one-person households has risen steadily from 16 per cent in the earlier period to 21 per cent in recent times. Among these are households occupied by old persons i.e. those aged 65 years and over. At present, over one in four old persons are living alone up from one in six in 1979.
The downward trend in average household size is likely to continue over the next 25 years, if not quite at the pace of the last quarter of a century. Even on a conservative basis, this would result in about 2 million private households by 2030. Three out of four of these households are likely to have less than four persons in them while the number of one-person households is projected to increase from its present level of over 270,000 to half a million by 2030. With an ageing population, it is to be expected that the proportion of persons aged 65 years and over living alone will also maintain its upward path.
The increasing trend towards urbanisation is also likely to continue apace. Approximately 60 per cent of the population lived in urban areas in 2002 compared with 38 per cent in the late 1970s. Based on current settlement patterns, it is highly likely that three out of four persons will live in built up areas by 2030. However, a major question is whether the low-density urban sprawl, which has occurred over the past decades, is allowed to continue or whether existing built up areas are developed to allow for more medium and high rise apartment blocks. Continued urban sprawl will bring in its wake a number of undesirable side-effects, including:
an increased reliance being placed on private transport 69 per cent of workers used private transport to travel to work in 2002 compared with 49 per cent in 1981.
longer distances being travelled to work up from 6.7 km in 1981 to 15.7 km in 2002; and
more time being spent commuting.
Lessons
The pace of demographic change experienced in this country in the last quarter of a century has been unparalleled elsewhere. The outlook is for continued population growth which, even in the absence of net immigration, is likely to be well in excess of that projected for our European counterparts. While the annual numbers of births and deaths have been reasonably predictable, both the magnitude and direction of migration have been strongly influenced by economic and labour market developments. For example in the late 1980s, when economic growth rates were depressed, the unemployment rate exceeded 16 per cent and net outward migration was running at over 40,000 per annum. In the more recent environment of high economic growth the unemployment rate has fallen to 4 per cent and net inward migration has been averaging around 30,000 annually.
But high growth rates have also posed a number of interesting challenges. Problems have arisen in the housing market with affordability being one of the main concerns. As a result, individuals and couples have had little option but to locate their dwellings at significant distances from their workplaces. The car has tended to be the only realistic means of transportation to work, with the result that longer commutes have put additional pressure on an already overburdened road system. The provision of suitable crθche facilities has also proved to be a fairly intractable problem.
The inevitable question is whether the pursuance of maximum growth should be the goal of economic policy any longer. The alternative policy of aligning economic growth more closely with our ability to supply the necessary labour force from domestic sources is worthy of serious consideration. Domestic sources of labour force supply could still see growth rates of 3 to 4 per cent being attained with due allowance being made for productivity gains. Persisting with the present policy will inevitably lead to further deterioration in the current infra structural bottlenecks.
Notes
1. Central Statistics Office, 2004. Population and Labour Force Projections, 2006-2036, Pm 4017.
2. Central Statistics Office, 2005. Regional Labour Force Projections, 2006-2021. Statistical Release.
3. The low migration scenario M2 assumes average annual inflows of 9,000 over the next 25 years.
4. Dumont, Jean-Christophe and Georges Lemaitre, 2004. Counting Immigrants and Expatriates in OECD Countries: A New Perspective, OECD, Directorate for Employment, Labour and Social Affairs.
5. Half of the 10.4% were born in Britain, many to Irish parents who returned to live here with their children.
6. The country of birth breakdown of the projected 1 million would differ significantly from the composition of the current 400,000 foreign born persons.
Tony Fahey
Research Professor in Social Policy, ESRI
Born in Co. Meath and studied in Maynooth College. Obtained his PhD in Sociology at the University of Illinois in 1982. Joined the ESRI in 1992. His research covers a range of areas relevant to social policy in Ireland and the EU including the family, demography, housing and social values. His most recent book, which he co-authored Richard Sinnott and Brenadette Hayes, is Conflict and Consensus: A Study of Values and attitudes in the Republic of Ireland and Northern Ireland (IPA, 2005).
Will There be Enough Children?
One of the great surprises for many countries in the closing decades of the twentieth century was the collapse that occurred in their birth rates. It was not just that, by the late 1990s, almost 40 per cent of the world's population found themselves living in countries where total fertility rates had fallen below 'replacement' level, now defined as 210 children per 100 women (or 2.1 per woman). Rather, it was that in many of these countries birth rates had fallen to as low as two-thirds the replacement rate, that is, to what could fairly be called critically low levels of population replacement. Having heard for so long about global over-population, we are now beginning to hear about population decline in some world regions, and about population crisis of a type that was completely unanticipated two or three decades ago.
Ireland in the past has been familiar with population crises, having been the only nation in the world from the mid-19th to the mid-20th centuries to have experienced population decline. So where does Ireland now stand in the emerging era of low birth rates? Children give richness and depth to many aspects of our lives and cannot be reduced simply to resources for the future. But they are the key social and economic resource for the future and are worth looking at in that light. Will Ireland have enough children in 25 years time to sustain the social and economic vitality we have enjoyed over the past decade?
While we cannot tell the future, we can get some sense of the likely scenarios by looking more closely at recent patterns. Strangely enough, a revealing perspective on these patterns can be achieved by looking at them in terms of Boston versus Berlin, the American versus the European experience. For the striking fact is that the problem of very low birth rates is much more European than American (though there are parts of Asia, particularly Japan, which also have very low birth rates). For twenty-five years now, Europe has had a lower birth rate than the United States and for the latter half of that period, the gap has been wide, with the US being being 35-40 per cent higher than the EU- 15 (Figure 1). The US birth rate is now hovering above 200 children per 100 women. While this is just below replacement level, it is enough when supplemented by a modest rate of inward migration to sustain population growth. In the EU-15, by contrast, the birth rate has been within the range 140 to 150 children per 100 women over the past decade and a half. Birth rates such as this would require a massive and socially unsustainable level of inward migration in order to maintain population growth. As a result, the EU is now headed in the direction of longterm population decline. The entry of ten new Member States in 2004 has done nothing to improve this picture, since their combined birth rate is about a fifth below that of the already very low EU-15.
So on this front, as on others, the US seems to be beating the EU hands down. Champions of the EU might argue that the 'European social model' is superior to that of the US but it is no better at producing babies than at producing jobs and its future vitality is compromised as a result.
As far as these issues are concerned, there is no doubt that Ireland is closer to Boston than Berlin. Birth rates in Ireland have been lower than those of the US since 1993 but only just. Having fallen to 184 children per 100 women in 1993, their lowest point ever, they recovered to 198 in 2002, almost up to US levels. Except for a short period in the early 1990s, when Sweden had a temporary spike in birth rates which lifted it to the top of the EU fertility table, Ireland has consistenly had the highest birth rates in Europe. Since we now also have substantial net inward migration, our population is likely to continue to grow over the coming decades. This gives us a US-style rather than an EU-style population outlook and contributes positively to the view ahead for Irish society and economy.
That these patterns are occuring is quite clear. Why they are occurring is quite unclear. Consider what was about to happen in Ireland in 1993, when birth rates had been falling for well over a decade but still were quite high by EU standards. The cost of housing was about to soar, employment rates among women (especially young married women) were about to take off, childcare was about to become scarce and very expensive and State support for families with children was to remain among the meanest in the EU. One might expect all these factors to exert serious downard pressure on birth rates and to bring Ireland more into line with the very low fertility performance of the EU as a whole.
But that is not what happened: in the ten years after 1993, the total number of births rose by 25 per cent and the birth rate (which expresses the number of births relative to the number of women of childbearing age) rose by about 8 per cent. Thus, while the economic boom of the past decade did not cause Irish birth rates to return to the high levels of our parents or grandparents, it did stop them from falling further and kept them at the top of the European league table. Furthermore, economic boom meant that fewer young adults than ever before left Ireland for foreign shores and more young foreigners than ever before came to Ireland. As a result, the size of the population in the family formation stages of the life cycle expanded rapidly and the number of births went up.
There is, then, a puzzle as to why birth rates in Ireland revived in the high cost, apparently child-unfriendly, climate of the 1990s. This puzzle is well worth thinking about, since it may hold the clue as to what the future may hold for birth rates in Ireland. The 'Catholic' explanation throws no light here, since, by the 1990s, the Catholic countries of Europe were among those with the lowest fertility rates. During this period, for example, Spain and Italy competed with each other for the distinction of having the lowest fertility rates in the world and other Catholic countries such as Poland and Portugal were doing little better.
We can begin to get better insight by, again, looking to United States. The puzzle of Irish births rates is no greater than that posed by the US experience. Like Ireland, the US appears to have a child-unfriendly public policy regime: state provision of childcare is virtually unknown and state financial supports to families with children are well below the norm for most European countries. Why, then, does the US beat Europe in producing babies and even beat the Scandinavian countries where state supports for families with children seem to be almost utopian?
One commonly given explanation for the strength of US fertility rates is the fertility behaviour of Hispanics in the US. The fertility rate per 100 women among US Hispanics in 2001 was 275, compared to the national average of 201. However, Hispanic fertility on its own is not enough to account for high US birth rates. Even among white women, the fertility rate in 2001 was just above 200, and high Hispanic fertility was counterbalanced by below-average fertility among other ethnic minorities (e.g. 175 among native Americans and 184 among Asians). If American white women at this time were a separate national population they would have a higher fertility rate than any European country, including Ireland.
So why do American white women have so many more children than their European cousins? Two possible reasons can be identified. One of them, strangely, is the Hispanic factor again, though this time viewed in a different light. For Hispanics in America contribute to American birth rates not only by having lots of children themselves but also by supplying cheap domestic and childminding labour to white Americans. Childcare in the United States may not be abundantly subsidised by the State as it is, for example, in the Scandinavian countries but that is not to say that it is expensive for middle-class families. The US policy of relatively abundant immigration and low minimum wages appears to be an effective means of keeping the cost of childcare and domestic labour low. Combine this with low income tax rates for high earners and tax reliefs for families with children and you end up with childcare costs that leave middle-class American mothers with just as much money left over for other things and just as much scope for having jobs outside the home as their counterparts in any European country.
The second factor that seems to help keep up birth rates in the US is the sheer buoyancy of the economy, and especially the good job situation for American women. The massive movement of American women into paid jobs from the 1960s onwards did the same as everywhere else: it pulled the birth rate down. However, demographers are now finding that women who live in developed countries, where job prospects for women are good, are likely to have more children than women who live in countries that either have a traditional view of women's role (e.g. Japan) or a sluggish job market for women (e.g. Spain or Italy). Good job prospects may discourage women from having more than two children but bad job prospects now seem to discourage them from having even two. Thus, strong demand for women's labour now seems to be one of the planks needed to keep birth rates from falling to critically low levels.
The parallels between Ireland and the US are obvious in the case of jobs, and especially jobs for women. The dreadful employment situation of the 1980s is likely to be one reason why birth rates in Ireland fell so much during that period, and the recovery in the 1990s is one reason why birth rates halted their slide. It is significant that, as births in Ireland increased since the mid-1990s, the number of women having their fourth or fifth child continued to fall but the number having their first or second increased dramatically.
Does Ireland have a parallel to the Hispanic factor in the US, viewed in terms either of high Hispanic birth rates or cheap Hispanic labour? On the surface, the answer would appear to be no. Despite recent migration, Ireland is still a long way from having any ethnic minority that is as large, relative to population size, as Hispanics are in the US. Furthermore, childcare costs in Ireland are high, partly because the sector is now far more regulated and more concerned about minimum standards than it was in the past.
Yet there are two elements of the current Irish situation that provide some echoes of that in the US. The first is that the grannies of Ireland the fit and active women aged in their fifties and sixties who do not have paid jobs of their own are major providers of childcare that are even cheaper than US Hispanics. CSO data show that of the 43 per cent of families with pre-school children who made use of childcare, almost half was provided by relatives, most of whom were unpaid. Thus the childcare system in Ireland is made up of a market-based portion which is expensive and a relative-based portion which is cheap. It is the combination of the two is that makes working parenthood in Ireland possible for so many.
The other factor to keep in mind is that Ireland is now a high wage, low income tax economy. Even though parents who have to pay the full burden of childcare costs may be pressurised, the pressure may be less out of line with that experienced elsewhere because of the high level of take-home pay now enjoyed by middle and higher income families in Ireland. Many Irish households are now quite well off and that makes them more capable of sustaining quite high childrearing costs than their counterparts in many other countries.
Birth rates in Ireland and in many other countries have evolved in unexpected ways over the past 25 years. They may surprise us again over the next 25 years. The outlook ahead for Ireland at present is reasonably good, but this is an outlook be-fogged with uncertainty. If the MacGill Summer School at its 50th anniversary in 2030 looks back over the time between now and then, it might have a story to tell about birth rates that nobody today could imagine.
Notes
1. The replacement total fertility rate (TFR) is defined as the number of births women of child-bearing age need to have in order to replace themselves. For every 100 women of child bearing age today, replacement in this sense requires 106 males births, 100 female births plus 2 male and 2 female births to allow for deaths before adulthood, giving a total of 210 (there are always about 106 males births for every 100 female births). The replacement birth rate can be well above 210 births per 100 women if mortality before age 20 exceeds 2 per cent as it did in all countries in the past and still does in many poor countries today.
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