Employment Research Institute Napier University Edinburgh The Ageing

Employment Research Institute Napier University, Edinburgh The Ageing of the Labour Force and Regions under Globalization Ronald W. Mc. Quaid Employment Research Institute, Napier University, Edinburgh, UK http: //www. napier. ac. uk/depts/eri/home. htm NARSC conference, Toronto, Canada, 16 -18 th November 2006

Employment Research Institute Napier University, Edinburgh Outline • Introduction • Population change – selected global issues and stylised figures • The regional level • Activity rates • Conclusions

Employment Research Institute Napier University, Edinburgh Ageing of the population • CEC (2004) ageing is a main issue. • Affects demand – health, services, pensions, saving rates, wealth distribution. • Labour supply. • Increased international migration but reduced (national) inter-regional? • (Methodology - Age range of cohorts, OECD and BRIC countries).

Employment Research Institute Napier University, Edinburgh Population Changes • 15 -49 year olds generally decreasing slightly (with a slight inverted ‘U’ shape), from 1960 and especially from around 1980 to 2010 • 50 -64 year olds population is rising across major parts of the globe. In Japan this share has risen steadily: 12% in 1960 to 21% in 2010 (& 2000) • Japanese share of 65+ year olds rises from 6% in 1960 to 22% in 2010

Employment Research Institute Napier University, Edinburgh <15 Year Olds as % Pop. 1960 2010 USA Japan Russia Canada UK Germany France Italy 1960 31 30 30 34 23 21 26 25 2010 19 14 14 16 16 13 18 13

Employment Research Institute Napier University, Edinburgh 15 yr Olds % Change 1960 2010 USA Japan Canada UK Germany France Italy <15 s +4 Total pop +66 -36 -15 -20 -31 -7 -42 +36 +11 +15 +12 +34 +12

Employment Research Institute Napier University, Edinburgh 15 yr Olds % Change 1960 2010 Brazil <15 s +54 Total pop +163 >65 +414 Russia -48(!) +14 +135 India China +93 +8 +163 +108 +342 +249

Employment Research Institute Napier University, Edinburgh International Projected % Population Changes 2001 -30 Source: GRO(S)

SCOTLAND: ESTIMATED AND PROJECTED AGE STRUCTURE 1901 -2031 Scotland 1951 Scotland 1911 MALES FEMALES Scotland 2001 MALES FEMALES Scotland 2031 FEMALES

Employment Research Institute Napier University, Edinburgh Number of 15 -29 year olds in Scotland • • • 1927 – 1, 369, 915 (28% of pop) 1952 – 1, 258, 378 (25% of pop) 1977 – 1, 186, 595 (23% of pop) 2002 – 938, 223 (18% of pop) 2027 – 770, 661 (15% of pop) • 1977 -2002 -21%; 2002 -27 -18%; 1977 -2027 -35% • I. e. we have been through high decline – BUT that was during working population growth period

Employment Research Institute Napier University, Edinburgh Population Change 1991 -1999 in Scottish Regions Source: Raeside and Khan, 2003.

Employment Research Institute Napier University, Edinburgh Some policy responses 1. Increasing the size of the labour force through: increasing working life (raising pension age, tapered retirement, increasing lifetime average hours); employment policies for older workers (e. g. attitude to training); Age Discrimination legislation 2. Migration (especially international) 3. Increasing activity rates 4. Increasing productivity 5. Managing decline, e. g. reducing health, welfare, pensions and income standards for future retirees (and others)

Employment Research Institute Napier University, Edinburgh Activity Rates • Activity rate (all persons classified either as employed or as unemployed & looking for work) • Employment rates? • Falling for many (except core 15 -49) age groups

Employment Research Institute Napier University, Edinburgh Activity rates % 1960 & 2010 USA Japan Canada UK Germany France Italy Age 15 -49 64% to 79% 71 to 78 61 to 82 72 to 80 74 to 80 68 to 76 63 to 75 Age 50 -64 Age 65+ 65 to 65 21 to 9 70 to 70 59 to 61 61 to 59 59 to 57 60 to 50 48 to 41 36 to 19 18 to 5 14 to 4 14 to 2 16 to 1 15 to 3

Employment Research Institute Napier University, Edinburgh Activity rates % 1960 & 2010 Brazil 15 -49 58 to 69 50 -64 51 to 51 65+ 32 to 14 Russia 78 to 84 49 to 58 7 to 7 India China 72 to 68 87 to 88 69 to 62 62 to 64 44 to 30 28 to 14

Employment Research Institute Napier University, Edinburgh Activity Rates • > 65 years rates decline markedly 1960 -2010 and are extremely low in most countries, except Japan – possible turning point and now growth? • Activity rate for 15 -49 year olds increasing over the decades in each country, partly as a result of greater levels of female working in the formal labour market. Limited future growth scope. • 50 -64 year olds the picture is more varied, partly reflecting varying normal retirement ages etc.

Employment Research Institute Napier University, Edinburgh Activity Rates 50 -State Pensionable Age Eastern South East South West East Midlands West Midlands Scotland London Yorkshire and The Humber North West Wales North East Great Britain Source: General Registrars Office 76. 5 76. 4 74. 3 73. 4 72. 0 70. 5 69. 8 68. 9 68. 8 65. 7 60. 9 71. 5

Employment Research Institute Napier University, Edinburgh Economic Activity Rates (50 SRA)(50 -Re Scotland Moray Aberdeen City Dundee City Edinburgh, City of Glasgow City South Ayrshire 70. 5 90. 0 83. 5 76. 8 71. 5 59. 3 55. 6 (result: D & G 16% total decline from 2004 to 2024) Source: Labour Force Survey February 2003.

Employment Research Institute Napier University, Edinburgh Issues and conclusions • Major changes are occurring - numbers, skills, characteristics, productivity of labour, training • Implications for modelling • Regions as a leading indicator? • Solutions for the nation (and regions)? – Birth Rate – In-migration – Increase participation and activity rates (demand supply side factors) – Extending working life

Employment Research Institute Napier University, Edinburgh Paper available on: http: //www. napier. ac. uk/depts/eri/home. htm and http: //www. scotecon. net/publications/Mc. Quai d%20 Full%20 Report. pdf