Ageing boom is the real crisis, Ruel

Paul Golding, guest columnist

Forget the babies, worry about oldies!

Opposition Senator Ruel Reid has received an avalanche of criticism regarding his call for a mandatory policy bonding Jamaicans (males and females) to have no more than two children for at least the next 10 years until Jamaica resolves its socio-economic issues. He made this recommendation in the context that 50 per cent of all children are on the Programme of Advancement Through Health and Education (PATH). This is an alarming statistic and, no doubt, requires further analysis and clarification.

The kernel of this suggestion is that steady population control can be used to enhance the welfare of the country. The corollary to this argument indicates that high population growth creates pressure on limited natural resources and reduces private and public capital formation.

NATURAL BALANCE

The discussion on the relationship between population dynamics and economic development is not new and has been widely investigated by economists and social theorists. A school of thought that supports Senator Reid's notion is that of the influential Thomas Malthus, an English cleric and scholar. Malthus wrote in 1826 that preventative and positive checks on population growth are necessary to keep the natural balance between production, especially food and consumption.

Adam Smith, who is considered the father of economics, held a similar view, stating that population growth should be a consequence and not a cause of economic growth. This school of thought generally supports a policy of controlled population growth.

An opposite view is held by Kremer (1993), who stated and empirically confirmed that larger populations are associated with higher growth rates and faster technological development. Technological development, a consequence of population growth, led to an increase in labour productivity, per-capita income and improvements in living conditions. Advocates of this school of thought would suggest policy imperatives that support fertility and immigration to countries with declining population, such as Canada.

What is clear is that the precise relationship between population growth and per-capita income is inconclusive and, therefore, the policy position should be based on both internal and external environmental conditions.

The 2011 Population and Housing Census will be used for the internal analysis. Data from the census indicate that the annual percentage rate of population growth of 0.36 per cent is the lowest it has been since the period 1911-1921, where the rate was 0.31 per cent. The low growth rate between 1911 and 1921 was attributed to high levels of migration.

DECLINING BIRTHS

The current low rate is attributable to the declining number of births. The census indicates that birth rates have fallen from an average of 24.2 per 1,000 between 1991 and 2001, to 17.4 per 1,000 between 2001 and 2011. The current fertility rate is 2.4 children per woman. Meantime, there has been a marginal increase in death rates from 6.4 between 1991 and 2001 to 7.1 in 2011.

Besides births and deaths, migration plays an important role in Jamaica's population dynamics. Migration has remained high and has fluctuated between six and eight per cent between 2001 and 2011. Generally, the majority of persons who migrate fall within the high-fertility age group of 15-44 and are the higher contributors to economic activities.

The census also indicates that the population is ageing. Between 2001 and 2011, the number of persons in the under-15 age group declined by 136,000, while the under-four cohort has declined by 63,000. In contrast, the 45-64 age group has increased by 127,000.

The data suggest that 17.8 per cent (477,000) of the population will retire in the next 20 years (using 2011 as the base year), an all-time high in the history of Jamaica. With improvements in technology and health care, this group of retirees is expected to live longer than any other group in the history of the world. Jamaica's life expectancy is currently 72.2 years and improving.

Externally, the United Nations (UN) Department of Economics and Social Affairs has indicated that in almost every country, the proportion of people aged above 60 years is growing faster than any other age group, as a result of longer life expectancy and declining fertility rates. Based on Jamaica's census data already discussed, a similar phenomenon is occurring.

From a migration perspective, let's examine the present occurrence in the three countries where most of the Jamaican diaspora reside: Canada, USA and United Kingdom (UK). Of these countries, Canada has the lowest fertility rate of 1.63 children per woman; the highest life expectancy of 80.5 years; the lowest percentage of the population under 15 years old (16.5 per cent) and the second-highest percentage of the population over 65 years old (14.2 per cent). This is a very ageing population.

The UK comes next on the ageing scale. The UK has the second-lowest fertility rate of 1.88 children per woman; the second-highest life expectancy of 79.6 years; the second-lowest percentage of the population under 15 years (17.6 per cent) and the highest percentage of the population over 65 years (16.6 per cent).

Of the three countries, the USA has the third-highest fertility rate (2.06); third-highest life expectancy of 78.1 years; the highest percentage of the population under 15 years (19.8 per cent) and the lowest percentage of the population over 65 years (13.1 per cent).

The UN argues that fertility declines in countries like Jamaica has led to a decreasing proportion of children and an increasing proportion in the working ages. This results in favourable demographic conditions for potential economic growth - a 'demographic dividend'. Developed countries were already at the end of the dividend and are in a period during which the older population is continuing to grow while, in most cases, the absolute number in the working ages is falling substantially.

There is also another consequence of ageing that is described as demographic dependency - the ratio of the number of persons in working ages to the number of younger and older dependents. This provides a crude indicator of the dependency burden within a society. As the population ages, this burden will increase, although it is also expected that older persons will remain in the workforce beyond age 65.

Developed countries have addressed these ageing issues by attracting immigrants from high-fertility countries. Case in point is the high number of Jamaicans migrating to Canada. This trend is expected to continue and is projected to have adverse effects on Jamaica's population growth.

Senator Reid's recommendation has both theoretical and practical merit, but should not be assessed within the narrow parameters of the PATH phenomenon, but from a broader national and international perspective.

With Jamaica's fertility rate declining and migration rates expected to increase or, at worse, hold steady, there is no compelling justification to institute a measure which would be considered draconian and difficult to enforce. In my estimation, the policy imperative should be how to deal with Jamaica's future ageing population.

Paul Golding is dean, College of Business and Management, UTech. Email feedback to columns@gleanerjm.com and pgolding@utech.edu.jm.