Archive for August 1st, 2012

Population Aging and the Welfare State in Europe

by Ronald Lee and Andrew Mason

[Population Aging to 2030, Day 3, Essay 1 of 3]

Many countries in Europe and elsewhere are aging rapidly.  In part this is occurring because of the enormous strides that have been made in reducing death rates at older ages and in part because of low fertility.  Fertility is particularly low in Southern and Eastern Europe where the total fertility rate, the number of births per woman over her reproductive span, is typically around 1.5 or less.  This means that the next generation will be twenty five percent smaller than the current generation unless fertility rebounds.  This is a recipe for both population decline and an old population, one with more elderly relative to those in the working ages.

Population projections are a powerful tool to look into the future.  We can be confident that in Europe the number 65 and older will rise substantially relative to those in the working ages however defined.  Demography can tell us only so much, however.  The economic effects of changes in population age structure in Europe depend on what people do at each age.  This is changing over time and varies considerably across countries depending on health status, values, public policies, standards of living and a variety of other factors.

Figure 1. Consumption (C) and labor income (Yl) by age in Germany, Spain, and Sweden. Source: National Transfer Accounts

The importance of this can be seen by comparing Sweden, Germany, and Spain.  In Spain and Germany labor income declines very rapidly at older ages as compared with Sweden.  Swedes in their late 50s and early 60s are producing much more than Germans and Spaniards at those ages.   Sweden has a different problem, however, which is very high consumption at older ages, largely due to publicly funded health care casino online and long term care.  One could say that Swedes in their 80s are a much greater economic burden, while Germans and Spaniards in their 60s create more strain.

The support ratio, the ratio of effective producers per effective consumer, provides a way of measuring population aging that allows for differences in consumption and best online casino labor income patterns.  The support ratio counts people at each age according to what they produce and what they consume as according to the curves in Figure 1.

Figure 2. Percentage decline in the support The Carlos Raitzin horoscope cancer is very interesting if you are interested in astrology. ratio, 2010-2030.

By this measure, population aging will have the greatest impact in Germany where the support ratio will decline by over 20 percent between casino 2010 and 2030.  Germany has dgfev online casino two factors working against it – low fertility and low labor income among older adults.  The decline in the support ratio in Sweden, the United Kingdom and the United States is projected to be at about half the rate as in Germany.  Spain is roughly in the middle between these two extremes.

The difference between Spain and Germany is online pokies primarily a matter of timing.  Germany is aging earlier than Spain because its fertility declined earlier.  Both countries will experience a decline in their support ratio by about 25% between 2010 and 2050, about twice as great a decline as in the other three countries.

A final element in thinking about the welfare state and population aging is that countries differ greatly in the mechanisms on which they rely to mobile casino meet the needs of the elderly.  In general, countries in Europe rely more on the public sector than in the US or many other countries.

This is clear in Figure 3 which shows the relative contribution of net public transfers, net familial transfers, and asset-based flows to funding the gap between consumption and labor income for those 65 and older.

There is great variation in Europe with Sweden (SE) relying entirely on net public transfer to fund the old-age support system.  In Germany (DE), about two-thirds of the support comes from public transfers while in Spain (ES) it is closer to one-half.  Population aging will place particular strains on the public old age support system in Sweden.

http://ntaccounts.org/web/nta/show/Population aging and the generational economy: A global perspective

Figure 3. Old-age support system for selected countries. Public transfers, family transfers, and asset-based flows as a share of the lifecycle deficit for those 65 and older. Source: Ronald Lee and Andrew Mason, lead authors and editors, 2011. Population aging and the generational economy: A global perspective. Cheltenham, UK: Edward Elgar.

Note that all the European countries that are shown in Figure 3 rely very heavily on the public sector to fund net consumption by the elderly. None relies on help from children, and generally they rely very little on assets, unlike the US. Figure 3 also shows that some but not all Asian countries do rely on families to provide old age support. In these countries population aging will also put pressure on adult children of the elderly.

Ronald Lee is Professor of Demography at the University of California, Berkeley, and Chair of the Center on the Economics and Demography of Aging (CEDA). Andrew Mason is Professor, Department of Economics at the University of Hawaii and Senior Fellow at the East West Center. They are Co-Directors of the National Transfer Accounts Project.

Population Aging and the Future of NATO

by Mark Haas

[Population Aging to 2030, Day 3, Essay 2 of 3]

According to a number of analysts, including the last two U.S. Secretaries of Defense, America’s relations with its partners within the NATO alliance are nearing crisis.  In June 2011, Secretary of Defense Robert Gates warned that NATO faces “a dim if not dismal future” and “irrelevance” as America’s allies remain “unwilling to devote the necessary resources or make the necessary changes to be serious and capable partners in their own defense.”  The following October, Gates’ successor, Leon Panetta, stated that “we are at a critical moment for our defense partnership,” and he implored America’s allies to increase their defense spending to ensure that NATO remained “relevant.”

While irritation by American leaders toward their European allies over free riding and related calls for Europeans to increase their share of military spending are not new, European NATO countries’ defense expenditures—both relative to the United States and as a percentage of GDP—are at historically low proportions.  For most of the Cold War, America accounted for 50 percent of total NATO military spending.  That figure is 75 percent today.  According to official NATO figures, only three of NATO’s 28 members—Britain (2.6), Greece (2.1), and the U.S. (4.8)—currently spend the agreed two percent of GDP on defense.

Low levels of defense spending are already having major effects on military effectiveness.  In the 2011 campaign to topple Muammar Qaddafi’s government in Libya, the Europeans lacked the weaponry, as well as the reconnaissance, intelligence, heavy airlift, and refueling equipment necessary to defeat a minor power.  As Gates put it, “the mightiest military alliance in history is only eleven weeks into an operation against a poorly armed regime in a sparsely populated country—yet many allies are beginning to run short of munitions, requiring the U.S., once more, to make up the difference.”

Although a number of factors contribute to contracting military spending across Europe, demography—particularly widespread, massive populating aging—is among the most important of these causes.  Due to a combination of increasing life expectancies and very low fertility rates (which are the average number of babies per woman in a country), NATO states are growing older.  The number of retirees throughout Europe is rapidly expanding, while the number of working-age people is quickly shrinking.  In 2030, Europe will have over 50 million fewer working-age people (ages 15 to 59) than it does today, and over 53 million more people over sixty.

These demographic realities will have major effects Registrerer du deg i dag, far du som sagt ogsa 5 gratis spinn pa utvalgte gratis spilleautomater rett etter registreringen, uten at du er nodt til a sette inn penger for a teste det ut. on states’ ability to project power abroad.  Three outcomes are particularly important.  First, population aging is likely to slow a state’s overall economic growth.  The primary problem is that as societies age, more people exit the workforce than enter it.  A state’s gross domestic product (GDP), in its most basic formulation, is a product of the number of workers and overall productivity.  As a country’s workforce shrinks as more people enter retirement than enter the labor market, so, too, will its GDP unless productivity levels rise sufficiently to compensate for this loss.  Although the last is likely to be the case in most casino states, workforce contraction will still act as a substantial brake on economic growth for the decades to come.  One study calculates that with shrinking workforces and a 1.5 percent growth in overall economic productivity per year (which is slightly higher than the European average the last fifteen years of 1.3 percent), GDP growth in the next thirty years will average 1.25 percent in France and 1 percent in Germany.  In such an economic climate, significant increases in military expenditures are unlikely.

Compounding this tendency is a second and even more important economic effect of social aging:  the strain that this phenomenon places on state resources.  European governments have オンラインカジノ日本 made commitments to pay Being natural is what gemini monthly horoscope female lacks sometimes. for substantial portions of the retirement and health care costs of their elderly citizens.  By mobile casino 2030, public benefits to the elderly are projected to rise for many European countries to over twenty percent of GDP, and they will continue to grow after this date.  In order to pay for the exploding costs of aging populations, significant spending cuts in other areas—including for militaries—will be necessary

A third and final way in which population aging is likely to impact states’ defense budgets is by pushing militaries to spend more on personnel and less on other areas, including weapons development and procurement.  As working-age populations shrink, competition among businesses and organizations—including the military—to hire workers will grow.  Consequently, if states’ militaries want to be able to attract and keep the best employees in vital areas of operation, they are going to have to pay more to do so.  Europe’s NATO members are already devoting significantly more resources to military personnel than weapons purchases and research (well over twice as much in most countries).  Without major investments in weapons and military equipment, NATO’s European powers will be hard pressed to project force beyond their borders for a sustained period of time, as we witnessed in the attack on Libya in 2011.

The preceding effects of population aging on European states’ military budgets might spell the doom of NATO from the American point of view.  Because the United States is aging to a lesser extent and less quickly than its European allies, America’s public obligations to the elderly as a percent of GDP will be lower and its working-age population will continue to expand (by over 10 million by 2030).  The U.S., as a result, will be able to continue to devote significantly more resources to the military—both absolutely and as a percentage of GDP—than will European states because the forces pushing for the crowding out of military spending for increased care for the elderly will be weaker.  Gates in 2011 referred to NATO as a “two-tiered alliance,” with the U.S. dedicating roughly 5 percent of GDP to military spending and most of its European allies less than 2 percent, and he described the resentment this bifurcation created in America.  As the aging crisis in Europe intensifies in coming decades, this spending gap is likely to increase, as will the resentment.  America’s aging European allies between now and 2030 are very unlikely to either increase their share of the burden in defense of common interests or become more effective in projecting force abroad.  As NATO’s commitment to deal with shared threats becomes increasingly hollow, the likelihood of U.S. leaders looking for more reliable—likely “younger”—allies will grow.

Mark L. Haas is Associate Professor of Political Science at Duquesne University.

by Richard Cincotta

[Population Aging to 2030, Day 3, Essay 3 of 3]

How powerful is advanced population aging?—powerful enough to place at risk the liberal content of Europe’s democratic regimes? In this essay I’ll argue that it could; that today’s confident clusters of European and East Asian liberal democracies (states rated as “FREE” in Freedom House’s annual survey) will, as they age beyond the median age of 45 years, incur greater risks of losing elements of the political rights and civil liberties that generations of their citizens and political leaders worked hard to attain.

How sure am I of the impending risks? In fact, I’m not sure. There is yet no historic record of states experiencing advanced aging. Despite the well-documented evidence of increasing democratic stability as country-level populations age (Weber 2012, Cincotta & Doces 2012, Cincotta 2008/09 & 2008), current theory cannot hope to forecast political behaviors for countries well beyond the median age of 45—beyond the current demographic frontier and outside the reach of available data.

While no country has yet evolved a deeply post-mature age structure (Fig 1.), by 2030 some will. According to demographers at the US Census Bureau’s International Program Center and the UN Population Division, by 2030, between 19 and 29 states will possess this novel quality. Three or four will be East Asian states. Nearly all the rest will be located in Europe. According to current US Census Bureau and UN Population Division projections, by 2030 both Germany’s and Japan’s populations will range near the median age of 50 years.

Figure 1. Population age structures indicative of four phases of the age-structural transition.

So far, aging (an increase in the median age) has been “good news” for liberal democracy. Since 1972­—when Freedom House (FH) produced its first state-by-state assessments of political rights and civil liberties—the global demographic pattern of liberal democracy has been extraordinarily consistent. Among states with a youthful population (median age 25.0 years or less) the annual proportion of states assessed as FREE (Freedom House status score from 2.5 to 1.0) has been relatively low—around 18 percent, on average, over the past four decades (Figure 2). Around 60 percent of all intermediate countries (median age 25.1 to 35.0 years) and about 88 percent of mature countries (35.1 to 45.0 years) have received the “Free” assessment.

Figure 2. The mean annual proportion of states in each of three age-structural categories that were assessed as FREE in Freedom House’s annual survey, 1972 to 2011.

More importantly, youthful liberal democracies have shown themselves to be inherently unstable. Over the past four decades, youthful states have ascended to FH’s annual list of FREE regimes on 52 occasions. On 51 occasions, youthful states dropped off of that list, retreating to a less democratic or even autocratic regime in the wake of a coup d’état, after elected or unelected leaders have assumed extraordinary executive powers, or when political violence has led to restrictions on individual freedoms. As a group, 235 Chapter 20: The Importance of Big best-data-recovery.com to Business . states that have ascended to the FREE category as eitherintermediate or mature populations have experienced much greater success at maintaining this rating (Figure 3). In fact, liberal democracies over the median age of 30 years seem the most stable. From this politico-demographic vantage point, Huntington’s third wave of democracy—an empirical wave of Published November 3, 2013 by ObamaCare Facts Wondering why your health travel health insurance reviews policy was canceled online casino going into 2014? Let”s take a look at why many Americans are losing their policy, how ObamaCare played a part, and why it could be a good thing or bad thing for you depending on the situation. successive democratization that began in southern Europe in the early 1970s—owes its accumulation of liberal regimes neither to popular revolution nor to gradual regime-motivated reforms, but to the democratic stability attained as population age structures mature.

But that was then—before any liberal democracies ventured beyond the median age of 45. Only the passage of time will allow an evaluation of the durability of post-mature liberal democracies. For now, political demographers are left to search among the behaviors of aging states for premature indications of democratic setbacks.

Figure 3. The absolute number of states, by age-structural type, that newly attained and lost the status of FREE in Freedom House’s annual survey, from 1973 to 2011.

Do such indications exist? Perhaps. Nearly all of the rapidly aging states along Europe’s southern flank have fallen into some degree of fiscal distress—and the shakiest among them appears to Men best-horoscope.com can’t stand boredom. be Greece, now at a median age of 42 years. Under the pressure of civil disorder, Greece’s government has backed away from fiscal reforms and tough austerity measures. Although still assessed as FREE in FH’s most recent annual survey (Jan. 2012), Freedom House downgraded Greece’s political rights score (from 1.5 to 2.0). In Eastern Europe, declines from high levels of liberal democracy have been more obvious and widespread. Ukraine (median age of 40 years) dropped from FH’s FREE rating to PARTLY FREE in 2009. While remaining with FH’s FREE status, both Latvia’s (median age of 41 years) and Hungary’s (40 years) scores have trended toward declining political and individual freedoms over the past two years.

Nonetheless, few political scientists are ready to investigate the possibility that some of this drift away from liberal democracy is related to advanced population aging. Perhaps they should entertain the thought. In the case of Greece, one can easily imagine the rising burden of public pensions and old-age healthcare contributing to public sector deficits and the loss of fiscal flexibility, particularly during a global recession. For Ukraine, Latvia and Hungary, most experts will argue—with justification—that the strength of democratic institutions and liberal traditions in these post-communist states is still weak. That said, some have had difficulty explaining why these particular eastern European states, where the transition from state communism to liberal democracy went relatively smoothly (and enthusiastically), and not others, have experienced significant erosion of press freedoms and weakening of executive-judicial separation.

Could these lapses in “liberalness” be symptoms of the degree of fragility that, in the future, analysts will expect from post-mature liberal democracies? Just as age-structurally youthful democracies bear high statistical risks of a retreat to a less democratic regime type in the wake of intra-state conflict and electoral violence, perhaps post-mature liberal states will find themselves vulnerable to more subtle expansions of executive power and decay of judicial checks.

Significantly, no recent overt signs of illiberalness have emerged from within the world’s oldest aging states: Germany, Japan and Italy. Apparently, these have (so far) taken their rapid pace of aging in stride. Despite its fiscal problems, Italy (the next in line to enter the post-mature category) was recently upgraded by Freedom House—from 1.5 to the highest average rating, 1.0. Still, the history of advanced aging is just beginning, and depths of their future aging challenges have yet to be plumbed. By 2030, roughly 28 percent of all Germans and 26 percent of Italians are expected to be aged 65 and older. For Japan, that figure is should reach 30 percent by the same year.

How well-anchored are liberal political and institutional traditions in the societies of Europe’s and East Asia’s aging liberal democracies? Will these traditions permit prompt and adequate policy responses to aging’s oncoming challenges? So far, we cannot know. After all, we stand at the beginning of a new history.

Richard Cincotta is Demographer-in-residence at the Stimson Center in Washington, DC, and a consultant on political demography for the Woodrow Wilson Center’s Environmental Change and Security Program. From 2006-09, he served as a long-range analyst for the National Intelligence Council.

 

References cited

Cincotta, R. P. (2008). “How Democracies Grow Up: Countries with Too Many Young People May Not Have a Fighting Chance for Freedom.” Foreign Policy (165): 80-82.

Cincotta, R. P. (2008/09). “Half a Chance: Youth Bulges and Transitions to Liberal Democracy.”Environmental Change and Security Report(13): 10-18.

Cincotta, R. P. and J. Doces (2012). The Age-structural Maturity Thesis: the Youth Bulge’s Influence on the Advent and Stability of Liberal Democracy. Political Demography: How Population Changes Are Reshaping Security and National Politics. J. A. Goldstone, E. Kaufmann and M. D. Toft. Basingstoke and New York, Palgrave-MacMillanpp.98-116.

Weber, H. (2012). “Demography and Democracy: the Impact of Youth Cohort Size on Democratic Stability in the World.” Democratization, iFirst (1-23).