SOME DEMOGRAPHIC IMPLICATIONS OF THE GLOBAL ECONOMIC CRISIS: A CHALLENGE FOR AUSTRALIA by Graeme Hugo University Professorial Research Fellow Professor 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
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Graeme Hugo: Some demographic implications of the global economic crisis/challenge for Australia.
Prior to the GFC, Australia was experiencing its most rapid population growth since 1972. This presentation suggests that the GFC will lead to a reduction in population growth in Australia due to both a fall in fertility and international migration.
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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”
• 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