Ageing and Longevity: What the Future Holds Professor Heather Booth School of Demography, Australian National University 4th International Conference on Ageing in a Foreign Land, Adelaide, 20-22 June 2017

Population & Longevity Ageing Age structure Product of past demographic rates Individuals Living longer More youthful at given age

population ageing – all about structure

1971: proportion aged 65+ = 8.3% Source: ABS

2016: proportion aged 65+ = 15.1% Source: ABS

2036: proportion aged 65+ = 19.5% Source: ABS. Note: This projection assumes continued high labour immigration.

Australia’s population ageing is moderate …..but why?

Demographic Transition and Population Ageing THE PROCESS Death rates fall - child survival High population growth Birth rates fall POPULATION AGEING Low population growth

Demographic Transition and Population Ageing THE PROCESS Death rates fall - child survival High population growth Birth rates fall POPULATION AGEING Low population growth NEW FEATURES Old-aged death rates fall –> ageing Large-scale migration

Migration and Population Ageing 28% of 2016 Australian population were born overseas But migrants age …. 37% of 2016 population aged 65+ were born overseas 2016 ‘Home-grown’ population increases Post-war migration At arrival, most migrants are young adults Source: ABS

Who are Australia’s older migrants Who are Australia’s older migrants? Largest migrant 65+ populations, Australia, 2016 Source: ABS

Largest migrant 65+ populations, grouped by migration history, Australia, 2016 Proportion aged 65 or older in largest migrant 65+ populations, Australia, 2016

Largest migrant 65+ populations, grouped by migration history, Australia, 2016 Median age of largest migrant 65+ populations, Australia, 2016

‘Age Factor’: an indicator of relative migrant share in population ageing Age factor = share of total 65+ population x median age of 65+ population

Largest migrant 65+ populations, grouped by migration history, Australia, 2016 Relative migrant share in population ageing, Australia, 2016

Implications of population ageing

Australia: rising old age dependency ratio Based on age groups: 0-14, 15-64, 65+

longevity

Longevity Humans are living longer …and longer … and there is no end in sight

Observed maximum female life expectancy Oeppen and Vaupel (2002)

Observed maximum female life expectancy Japan 2014 86.8 years Oeppen and Vaupel (2002)

Life expectancy at birth, Australia, 1950-2014 with forecast to 2044 88.6 84.6 85.1 Female Range = 80% probability interval 80.6 Male Forecast based on method of Hyndman, Booth and Yasmeen (2012)

But how long do we live? Life expectancy at birth – limited for measuring real longevity or age at death Based on all deaths in a particular year Not a life-course perspective Not focused on older ages Cohort life expectancy (CLE) at older ages is a more useful measure Age + CLE = expected age at death

Expected age at death increases over time and over lifetime Younger cohorts have higher expected age at death (small effect) Expected age at death increases with own age (large effect) Are these increases being planned for? Cohort Forecasts by Tickle and Booth (2014)

Increasing expected age at death and decisions about retirement

The gap: years in ‘retirement’ Expected age at death at pension age Pension age (current legislation) Based on period life expectancies: underestimate life-course expected age at death

Average years in ‘retirement’ After ‘retirement’, females can expect to live 24 years and males 21 years Is the gap too large? Should pension age be linked to life expectancy? Was earlier female retirement a blessing or a curse?!

Is the gap too large? – it all depends…… …. and other factors

Australia has high poverty rates at 65+ 33% of older Australians live in poverty, compared with 14% at younger ages. Remarkably, Australia is almost the worst country in OECD in terms of old age poverty. Source: OECD; poverty is defined as less than 50% of median income

Australia has relatively high socio-economic inequality in life expectancy@65 Note: Australian figures are from survey data and are approximate.

Whose average years in ‘retirement’? For the lowest income group After ‘retirement’, females can expect to live 21.5 years and males 17.5 years Was earlier female retirement a blessing or a curse?!

Compensatory behaviour The poor live fewer ‘post-retirement’ years (post-65) But those in poor health tend to retire at a younger age The rich live longer in ‘retirement’ (post-65) But those in good health tend to retire later

Should pension age be linked to life expectancy? Arguments for linking pension age to life expectancy should consider inequality in longevity. We don’t all have a long healthy retirement Socioeconomic inequality is a main factor

Should pension age be linked to life expectancy? Australia does not yet have reliable data on life expectancy by socio-economic status (or by other factors) Formal variable pension age is impractical Pension age is most relevant to the poor Old age security should be guaranteed Flexibility is needed in retirement Incentives to prospective pensioners to work beyond pension age