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The rise of ‘demographic security’

19 October 20170 comments

In the arguments around the globe about immigration levels and threats to economic prosperity, a new phrase has emerged: ‘demographic security’.

Basically, this means that developed nations in the West need young, tax-paying workers to help pay for the pensions and healthcare of ageing populations

But also means a threat to the wellbeing of the older people in the countries suffering large net emigration of the young and educated to the West.

Countries in Eastern Europe and Central Asia (EECA) have been particularly hit as young relatives who might have cared for the elderly move away to find work.

These people often pay little or nothing into a formal social care system that provided only meagre support in the first place. Young people are also potential parents, so their departure also amounts to the reduction in size of new generations.

Also, many grandparents – who may be in need of care themselves – can end up caring for their grandchildren whose parents are working abroad.

Recent UNICEF data shows that 75,000 children in Moldova had at least one parent abroad, and 35,000 lived with neither parent – and the figures are rising.

Another recent report on the EECA (Eastern Europe and central Asia) region, which includes countries such as Albania, Bosnia and Herzegovina, Kazakhstan, Turkey and Ukraine shows these countries going through critical and unprecedented demographic change.

Life expectancy has started to increase for both men and women in the region, but this increase in longevity is not always accompanied by good health, the World Population Prospectus report says.

And between 2017 and 2050, several countries in the region are expected to see their populations decline according to by 10 per cent or more.

“This rapid demographic change has coincided with political, economic and social transformations that have led to generational divides,” the report says.

“The fall of communism affected younger people differently. They were able to reorganise themselves relatively easily. Older people found this far more difficult,” it said.

Countries in this region now talk about “demographic security”, while the debate in Western Europe is about coping with ageing populations.

The trends have benefitted populist nationalist political parties, who place a strong emphasis on nativism and pro-birth population policies.

One damaging effect is that large-scale emigration takes away the benefits of the ‘demographic dividend’, the reports says.

This occurs when the proportion of working and productive people in the total population is high, and provides a corresponding boost to growth of the economy.

When this flips around a country can lose the chance to generate a more rapid economic recovery and prepare better for the challenges of its own ageing population.

It may well be that the damage has been inflicted for nothing. Western European policy makers hoped to import young workers to rake in taxes they could use to pay for their own ageing populations, but this assumption has turned out to be wrong.

There just have not been enough new workers arriving to balance out the effect of the growing number of older people.

A report in Germany said it would need a net immigration of half a million immigrants per year to have enough workers for continued economic growth – and even this enormous number would merely postpone the impact by 20 years rather than solve the problem.

The International Monetary Fund (IMF) says close to 20 million mostly young and skilled Eastern Europeans left their countries over the past 25 years to seek better opportunities abroad.

The reports agree that what is required is a coherent strategy for institutionalised and coordinated provision of social care services.

They say there is also a need for policies which help to balance work and family life, and which offer flexibility to families caring for the elderly and disabled people.

But incentives are also needed to encourage younger people to stay in their home countries.

“Reversing migration trends presents an even greater challenge than policy tinkering around care provision, and it will require the creation of genuine economic and investment opportunities at home,” one observer said.


Laurie Nowell
AMES Australia Senior Journalist