1. The Ageing of the Labour Force and Regions under Globalization
Ronald W. McQuaid
Employment Research Institute,
Napier University, Edinburgh, UK
NARSC conference, Toronto, Canada,
16-18th November 2006

2. Outline
Introduction
Population change – selected global issues and stylised figures
The regional level
Activity rates
Conclusions

3. 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).

4. 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

5. <15 Year Olds as % Pop. 1960 - 2010 1960 2010 USA 31 19 Japan 30 14
Russia
Canada 34 16 UK 23
Germany 21 13
France 26 18
Italy 25

6. 15 yr Olds % Change 1960 - 2010 <15s Total pop USA +4 +66 Japan -36
+36
Canada
-15
+11 UK
-20
+15
Germany
-31
+12
France -7
+34
Italy
-42

7. 15 yr Olds % Change 1960 - 2010 <15s Total pop >65 Brazil +54
+163
+414
Russia
-48(!)
+14
+135
India
+93
+342
China +8
+108
+249

8. International Projected % Population Changes 2001-30
Source: GRO(S)

9. SCOTLAND: ESTIMATED AND PROJECTED AGE STRUCTURE 1901-2031
MALES
FEMALES
MALES
FEMALES
Scotland 2001
Scotland 2031
MALES
FEMALES
MALES
FEMALES

10. 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)
%; %; %
I.e. we have been through high decline – BUT that was during working population growth period

11. Population Change 1991-1999 in Scottish Regions
Source: Raeside and Khan, 2003.

12. Some policy responses
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
Migration (especially international)
Increasing activity rates
Increasing productivity
Managing decline, e.g. reducing health, welfare, pensions and income standards for future retirees (and others)

13. 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

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

15. Activity rates % 1960 & 2010 15-49 50-64 65+ Brazil 58 to 69 51 to 51
Russia
78 to 84
49 to 58
7 to 7
India
72 to 68
69 to 62
44 to 30
China
87 to 88
62 to 64
28 to 14

16. Activity Rates
> 65 years rates decline markedly and are extremely low in most countries, except Japan – possible turning point and now growth?
Activity rate for 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.

17. 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

18. Economic Activity Rates (50-SRA)(50-Re
Scotland
Moray
Aberdeen City
Dundee City
Edinburgh, City of 71.5
Glasgow City
South Ayrshire
(result: D & G 16% total decline from 2004 to 2024)
Source: Labour Force Survey February 2003.

19. 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 and supply side factors)
Extending working life

20. Paper available on: http://www.napier.ac.uk/depts/eri/home.htm and