Changing Demography with Public Policy
Pru Goward
Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination
2006 Australian Social and Economic Policy Public Lecture Series
Visions Theatre, National Museum of Australia
Canberra
Tuesday 11 July
Thank you for inviting me to speak this afternoon about the relationship between public policy and demography- policy, demography and destiny. The proposition that public policy can change the composition of our population- its age distribution, its ethnicity or even its class, in other words its demography is, as far as I can see, uncontestable. It has, it can and it will.
How we get the demographic outcomes we do is in some senses more interesting than the outcomes themselves. Demography is destiny they say, but it is the journey that counts. And more of destiny later.
Of course public policy covers a wide range of activities at a
number of levels of government and many of them will have demographic
consequences. Although gender equality is only one such policy, you would not
expect me to address the relationship between demography and policy without
reflecting on gender equality in particular.
Demography is certainly hot
news at the moment. From the most senior ranks of government to the top
echelons of business, there is growing concern about our demographic future, in
particular the ageing of Australia and its social and economic impact.
There’s a degree of panic about this; a fear that not only will we all get old and then die, but that Australia will end up as a sort of ghost town, like the town of Hamelin, first with no children and then with no one at all.
Of course what we are really talking about is Australia levelling out at a point with an even smaller population than today. Even then, it is not really size that matters, it’s whether or not this smaller population will be able to sustain itself at the same wealth and income levels of today. Economists are still debating this between themselves and it is far too early to declare that the bigger the better. My only comment is whether or not it’s economically sustainable, politically it isn’t and that’s the only thing that will count.
When it comes to demographic profiles, everyone loves a picture, so I asked today’s lecture convenors to put up a slide of the two mostly commonly discussed national demographic profiles. Everyone is fascinated by the beehives, coffins and other mysterious shapes in between that are now being reproduced in power points all over the country. As you know the beehive shape is the right- or desired-shape for a mature economy- lots of working aged people supporting people who are too old or too young to support themselves. It’s the one Australia has now. The coffin shape, with lots of elderly people at the top being supported by far fewer workers, is the shape of doom, the unsustainable profile- too few people supporting too many oldies. The treasurer Peter Costello loves a good power point and has certainly used the coffin and the beehive to good effect. So, I admit, have I. Statistics may lie with the exception, apparently, of demographic statistics.
However demography and a country’s demographic outcomes are not just of interest to public policy analysts.
The link between public policy and demography also poses a philosophical question. Should we seek to change our demographic outcomes with public policy or should we accept them as the unintended consequences of other policies? In other words is your demographic outcome the punishment you deserve or your reward for foresight?
These are the two questions I would like to address this afternoon;
- first how, rather than does, public policy affect the number of people, their age, class, race, ethnicity and gender composition in a country and second
- should we seek to do so?
Historically countries have often tried to change their population sizes. They have, with the exception of the Inquisition and the Holocaust, which was interested in the population’s religious profile, been less concerned with the demographic outcomes of population policy.
China and India are of course the two most significant and large scale examples of population change policy in the modern era. China has aggressively pursued decreased population through a range of punitive measures levelled against those who had more than one child, while India offered a range of incentives for those who sought to limit their families, like transistor radios for men who undertook vasectomies, but no impositions. China has been dramatically successful, India less so.
A question we might ask is whether or not this was a good thing. Their demographic outcomes contribute to the answers. China has one of the most rapidly ageing populations in the world and a shortage of women, while India promises to be the major source of new workers well into this century. But the voluntary nature of India’s population policy has had other consequences; India’s poor population is growing faster than its middle class, contraception being more widely adopted willingly by middle class families or those with educated women, than by poor families or those with illiterate women.
Closer to home, Australia’s demographic policies have been concerned with racial composition as well as numbers. The great migrations of the 1800s were responses to Australia’s emerging economic and political opportunities but they were also very much shaped by the determination to keep the racial profile of Australia much as it was. Australia for the White Man, China for the Chows- the contribution of JF Archibald to Australia’s national progress- sums up an era in immigration policy that continued on in Arthur Caldwell’s day as “Two Wongs don’t make a White”- the infamous White Australia Policy. This was accompanied by a “Breed up before they take us over” mentality at home and generous family benefits policies.
More recently, the 1950s and 60s witnessed both mass immigration and soaring birth rates, surely a signal that the nation wanted to be a bigger country and considered it could afford to be, but not really the outcome of demographic policy changes.
That is not to say people had more children by accident. The baby boomers were indisputably the result of the pent up demand for family life that had been put on hold when the men went away to war. If you look at even the fashions of the day, there was a renewed emphasis on femininity and fertility. In order to get women to make way for men coming back to civilian jobs perhaps women were encouraged to rediscover their mother goddess within? However on balance the significant increase in family size appears to have followed from the record growth and employment rates of the period and the extraordinary confidence people had in their capacity to provide for their children, rather than anything imposed on Australians as population policy.
It is most certainly true that a combination of access to reliable contraception, greater economic opportunities for women and the end of the long boom in the seventies contributed to the decline of the birth rate thereafter and today’s rising beehive. Meanwhile scientific and medical breakthroughs drove longevity and mortality improvements although I doubt any planner was calculating out the impact on Australia’s demographic profile.
As a baby boomer I find it puzzling that if there was a national policy of population increase, even if only unspoken, it was not accompanied by good planning for these extra people.
I’m not sure how great it was growing up in four children households where kids slept on enclosed verandahs because there were never enough bedrooms, where there wasn’t quite enough for every child to get their needs met, where there were never enough class rooms, science laboratories and universities to support this bulge in the population profile until it was half way through and then, when technological change in manufacturing kicked in big time during the 1980s, a whole lot of under-educated baby boomers went out of work and on to the scrap heap. Where did we think we were going to end up if we stayed with 3.6 children per woman anyway? Why did we compound our population pressures with mass immigration? If it was because we were (secretly) planning to turn ourselves into a very large manufacturing economy driven by large numbers of people, maybe we should have checked with Australians first to find out if that was what they wanted and how did that fit with centralised wage fixing and tariffs anyway? The trouble is, as we are finding now, demography is a big destiny to change. It can take a quarter of a century to begin to change the shape of a country’s age profile. Whether or not the original demographic profile had been planned is irrelevant to solving its problems.
As I said, I don’t think there’s much doubt that public policies as diverse as defence, macro economic policy, water resources, access to reliable and cheap contraception, health and cancer treatments, a better educated community and changes to the status of women have all affected fertility rates, mortality rates, longevity rates, immigration rates and thus the demographic outcome. Home ownership, job security, unemployment and expected living standards will also have had demographic outcomes because they too, affect fertility, mortality and longevity and net immigration. Remember a record number of Australians leave our shores permanently each year.
The impact of gender policies in the 70s, 80s and 90s on our demographic shape I think is particularly curious- and instructive.
Historically there has been a strong inverse relationship between women’s rights and the number of children they bear. When you give them the means of controlling their fertility and the right to do so, on balance the number of children they have goes down. When you give them the chance of economic independence and a job, the number of children they have goes down. Much of this is about opportunity costs; if you have limited opportunity to do anything other than have children, you will have children. It is about choosing a life course from an expanded range of options and horizons.
So far as increased population advocates are concerned, you’d have to conclude that gender equality has been a no-no. Barefoot, in the kitchen and pregnant is the preferred fertility stance. As early as the 1970s economists were arguing that the second wave of the women’s movement, and in particular the increasing workforce participation of women, was reducing the birth rate. It is true, when you look at third world countries today with low female labour market participation rates, that their fertility rates are higher.
(By the way their female and child mortality rates are also higher and their economies struggling, suggesting that a young demographic profile is only one among many desirable economic outcomes. As the Arab Development Bank recently concluded in its study of the Arab world’s ½ % economic growth rate (an eighth of Australia’s)- the lack of education, democratic rights and women’s rights were the three principle factors in holding those countries back.)
However more recently (that is the 80s and 90s) a new relationship between gender equality and fertility has emerged in mature economies. These economies, with well established and sophisticated education and industrial systems, demonstrate that declining fertility now results from gender inequality. It’s what happens when you half do the job. When you give women equal access to education and to jobs, but you don’t change the jobs to accommodate people who have onerous caring responsibilities. It’s what happens when you give women reproductive rights and access to contraception but you don’t give them paid maternity leave and other basic supports like the right to work part time and where child care is expensive and difficult to get. If it’s too hard to both work and have children- some will stop work but others will stop parenting.
It’s what happens when you give women the right to choose their partners but you don’t give the partners- men- an expanded range of life options that might include being a parent first and worker second. It’s what happens when you tell women it’s ok for them to paint the gutters but you don’t tell men it’s ok to clean the bathroom.
So no wonder the fertility of high earning and well educated
young women has plummeted, with a range of demographic consequences, including
for the country’s socio economic profile. As we know, poor unemployed
couple families have on average the largest number of children and so long as
the combining of work and family remains as difficult as it is, we will continue
to divide into a nation of female worker bees and breeder bees. For men it is
different- Poorly educated men being neither worker nor breeder bee and well
educated and remunerated men being both worker and breeder. A new form of
gender inequality.
We should all be grateful to the untiring efforts of your
own Peter McDonald in unpacking these relationships and so adding to our
improved appreciation of the role of gender equality in population
outcomes.
International experience seems to bear out the connection between gender equality policies and fertility and particularly the role of consistency. Countries with inconsistent gender equality policies such as traditional social values and discriminatory working arrangements combined with equality in the class room and in access to contraception will have, mostly unintentionally, lower fertility rates than those countries with greater consistency between levels of economic and social inequality. I have followed the Italian research into their low fertility with amused interest, particularly research on the amount of housework done by Italian men and its impact on fertility rates. The Italians have noted the reluctance of young women to marry and have children. They put it down to a combination of poor part time work opportunities, children who live with their parents until they well into adulthood (71% of Italians in their twenties live at home) and the expectation that, after marriage, a man’s wife will carry on the tradition set by his mother. According to Daniela del Boca, an economist at Turin University, Italy’s highly regulated labour market, the absence of professional child care and the low percentage of housework carried out by Italian husbands all contribute to the low fertility of that country. Italian men do 19% of the housework compared with at least a third of housework done by men in Northern Europe. Why would Italian women have children when that was their fate?
It is no accident that the late
Pope John Paul, hardly a new age feminist, made it his business in the dying
days of his papacy to urge the world to enable women to play a role in public as
well as family life, to be able to contribute to paid work as well as to have
children. No accident because the Catholic Church’s heartland states are
practicing contraception and actively avoiding family formation. The countries
with traditional catholic family values are shrinking. The Pope’s letter
was a cry from the heart, the heart of the church, for the survival of the
Catholic European.
Of course if we wish to increase our population, there
are many public policy options for doing so. Special benefits such as
subsidised housing loans for families of three or more children, a one size fits
all payment for anyone who has a child, a more targeted and larger payment for
those having their third child, subsidies only for women who work and have
children, subsidies only for women who have children and do not work, industrial
regulation that promotes working parenthood; all these policies affect not only
the number of children but also who has them. For example although the decision
to have a child will be the result of a number of factors such as marital
stability and personal preference, the current Maternity Payment, now $4,000 per
child, will be more of an inducement for a poor or unemployed woman to have
children that it will for a high income woman. All other things being equal,
you would expect this to be reflected in the socio-economic profile of the
Australian population- there’ll be more children in poor families. I am
not aware of any work having been done to examine any changes in the socio
economic profile of the population since this benefit was introduced but it
would be very useful to do so.
If instead your policy is only to give generous benefits to those having their third or subsequent child, you might also end up producing more children in already poor families, or families without a strong earning capacity, or families with a tradition of large families and restricted contraceptive use. But if you modified this so that it took the form of, say, a year’s paid maternity leave for the third child, it might skew the fertility outcome towards working women rather than unemployed women. Do we want this- I could not possible say?
What is clear is that gender policy, based as it is on our attitudes to gender, the role of women and the rights we assign women, will have a significant impact on demographic outcomes. It will affect not only the number of children but also who has the children, the circumstances in which those children are raised and the expectations therefore they are likely to have when they make their own fertility decisions.
There is no end to the number of policy combinations that might produce a change in the population and its profile; intended and unintended. As the keen public debate around Virginia Haussegger’s book on childless demonstrated and as Professor McDonald pointed out at the time, even a good awareness campaign of the risks of leaving conceiving too late in life might affect fertility in educated women. Job prospects and job continuity are said to affect the male’s decision to have children, so do low interest rates. Even transport infrastructure policy, by changing commuting times, could do so. Certainly recent national consultations for my current national project, Striking the Balance, confirmed that the quality of family life is affected by a number of variables including commuting times. The city of Sydney, for example, is in the grip of a commuting crisis I had never imagined, with people sitting in traffic for hours each way across the metropolitan area at great commercial and personal cost - surely reflected in that city’s declining birth rate.
Even perversely so- young professionals live in inner suburbs to avoid the commuting times but find themselves unable to afford dwellings large enough to house more than themselves and one child and without nearby childcare.
It is certainly worth advising governments that their policy decisions, however apparently removed from fertility policy, should account for their effect on population size and shape.
I am not aware of the existence of a public policy demographic model in Australia and before the age of contraception perhaps it was rather less necessary. If there is no such thing, I strongly commend one to you. Governments need to know which policies have what effects and we certainly need a better understanding of how policies can be combined together for strategic effect, one way or another.
It is important, in democracies, that people are informed. Ah yes, some of you will mutter, but what is useful about speculating on consequences a quarter of a century out that may not concern them? Better, I would have thought, to inform some people than none. It all depends on the degree of confidence in the model and that, of course, is the business of modellers.
Not being a demographer but very in love with its charms, I can give no better advice.
It is significant that for all today’s talk about the need to increase our population- or to at least to maintain it- no one seems to be talking about a population policy. Even when ZPG was all the rage in the seventies and young women like myself committed to no more than two children to save the earth, there was no population policy. Yes, there has been some recent encouragement from the Treasurer- one for yourself, one for your husband and one for the country- with, apparently, some affect- but that can hardly be said to be a population policy. Perhaps because there is always a good counter argument to every population policy? Some argue, for example, that we should limit our population because of our fragile environment- others argue we need to expand it to maintain our economic growth. Some acknowledge our lack of water and arable land but believe that technology and science will solve that problem.
But perhaps it is not entirely because of the difficulty of agreeing on a population policy? Perhaps the history of population policy in Australia- the white Australia policy, the breed-up-before-they-take –us-over philosophy, the cheap white workers policy of the post war, have left us uncomfortable? Perhaps it is considered distasteful to have children according to a national plan, where the wishes and desires of individuals are subjugated to the demands of some national socialist plot- after all, one day we have a population policy, the next day we have a parent policy, then a desirable parent policy. Who knows where it ends up? There is certainly no disagreement that any population policy or objective, however benign, is predicated on a strong sense of nationalism.
We can speculate endlessly on the coyness of successive governments about embracing a population policy-but for whatever reason, I see no great appetite for one today.
The problem with a population policy, other than the dangers of excessive nationalism, is the time lapse. A population policy change today only starts to compound itself in the next generation, twenty odd years later. The effects of a policy change do not all emerge at once and over time may involve considerable public investment or other changes not necessarily signed up to by future voters who didn’t decide the original policy shift.
This time lapse presents a number of difficulties for public policy; here are two of them:
Will the demographic concerns of today remain the concerns a quarter of a century later? (Take ZPG, a Malthusian view of the world that did not account for technological change and the capacity of humankind to adapt and modify their environment.)
Will voters ten years hence, fifteen years hence want to continue the public investment required by that initial demographic decision?
Personally I am inclined to believe that a country’s optimal population is usually pretty close to the one it has; while there are on-going adjustments to be made and these can be uncomfortable and expensive, essentially human beings are able to adapt to their surroundings and settle into some sort of equilibrium. The idea that, for example, Germany and Italy are breeding themselves out of existence and that this is some sort of crisis is an idea based on the argument that Germany and Italy are only countries if they are filled with people whose great grandparents also ate sausage, read Goethe and are buried in the same soil. In fact Germany and Italy will of course continue as countries, peopled instead by migrants or the children of migrants, peopled with a different demographic profile, but peopled nonetheless. It will be a great boon, of course, to the migrants and their children who are thus able to take advantage of the German legacy. If there is a loss it is the loss to the young men and women of Germany who have found their living conditions so unattractive and unsupportive of family life they have chosen not to enrich their lives with the wonder of children, and a loss to the world perhaps of traditional German culture. Both those concerns are valid- one is an intensely personal concern about the meaning of a person’s life and the importance of creation and love to each of us- the other is a concern that the world should maintain a diversity of cultures and traditions in order to provide the world with greater adaptive strength. But the need to maintain diversity does not necessarily mean the preservation of all existing cultures. It also means the embracing of new and adapted cultures.
The history of the world is the story of the battle between the forces of the status quo and the forces of change. At its most constructive, history has produced new, adapted and modified cultures and peoples suited to the times. At its worst, history has wiped out entire cultures and people, denying them any contribution to the future. Most of history has been somewhere in between. In other words even the disappearance of a distinct and well defined culture such as German culture will not necessarily entail the loss of cultural diversity.
Take the ancient Romans of Britain- they disappeared from England’s green and pleasant land in a few boatloads and border incursions, yet vestiges of their traditions, language and genes remain in the Britain of today.
While in every age the powers that be, the status quo, have declared their unwillingness to change and determination to defend traditional values to the death, in very few ages have they actually succeeded in doing so (the Inquisition lasted for centuries because even it never won completely). The present day might turn out to be an exception but I doubt it. This is not the first time the West has seen its supremacy challenged by either outsiders or insiders. In the past it has prevailed, rarely by destroying its challengers, more often by accommodating and absorbing them. And if today’s challenge is principally about our reducing and ageing populations, then it is entirely within the West’s own resources to address that. If domestic policy can reduce fertility rates then domestic policy can also boost them again.
At this point I feel myself drifting into a philosophical musing-out-loud exercise rather than anything rigorously argued, so allow me to return to the present.
Whenever governments have tried to plan
anything complex like industry, urban environments or society itself, they have
been as likely to pick losers as winners. Demographic policy will be no
different. Governments will be damned if they do and damned if they do not.
They will be blamed if we end up with so few people of working age we have to
import whole communities from elsewhere and blamed if we end up with too many
young people, or the wrong mix.
Countries get the demographies they
deserve; it’s an outcome not an instrument. It’s also a dynamic,
not a static outcome. Future governments, parents, children and tax payers will
respond to it, change it, adjust to it at every turn.
Allow me to finish with a short reflection on the meaning of destiny. It has a finality about it, the word destiny. An acceptance. In the case of our demography, in particular our age profile, that destiny basically assumes that the number of over sixty fives compared with the number of working aged people compared with the number of children, condemns us to a certain future. A future where one in four of us will be over sixty five is assumed to be one where tax payers will pay enormous amounts to maintain the living standards, particularly the health standards of our elderly, or alternatively one where the oldies scratch and fight for their survival and women, obviously, fare badly, and where intergenerational jealousies soon emerge. The largest generation of voters in history will, it is assumed, make sure their children and grandchildren are forced to support them in the manner to which they have become accustomed and the consequences for the country’s economic future will be ignored.
That’s the destiny of our present demography, our present distribution of ages.
But destinies needn’t be like that. For example it needn’t be that everyone over the age of 65 is a dependent and a worry for the taxpayer. With improving medicine, technology and preventive health measures there is nothing to stop people working until they are seventy. There is also nothing to stop people working more before they are 65, so providing for their later retirement.
In Australia at present only 41% of women between the ages of 55 and 64 are in any paid work at all, and by the time Australian men and women reach 60, the majority are already retired. So forget the ugly looking dependency ratios for the over 65s- ours are kicking in five or ten years earlier. These are very high ratios by western standards today.
If Australian public policy can assist more people in older age groups to work, and to work for longer, then the down side of our demographic ageing is not only staved off but permanently eased by reducing the number of years of aged dependency. To encourage more older Australians to work for longer requires an improved acceptance of older workers ( and the new Age Discrimination Act is one tool in this battle) and working conditions better suited to keeping mature-aged workers interested and willing to keep working. Part time options like extended annual leave, six months on, six months off, short weeks or even full- time days without unpaid overtime, will all contribute to keeping older workers on the job, allowing them to take it a bit easier, care for their grandchildren- and increasingly their own even more elderly parents-without having to give up work altogether. You will note that it is nearly always women who give up work or cut back on work to care for elderly parents or their grandchildren. While allowing a range of part time or flexible work arrangements may not be as good as everyone working full time until they drop dead on the way home from work, it will certainly give better results than our present drop out rates. These extremely early retirement rates put inevitable pressure on the public purse when they all turn to the old age pension and the Senior’s Health Card instead of their own retirement savings.
The challenge of keeping more Australians in work for longer is similar to our fertility challenge. Our industrial arrangements and government support systems, our attitudes to care and to gender equality will all affect how well Australians are able to combine their unpaid caring commitments with paid work. We need to ensure they can do this better than they do. This may well be the key to ensuring that while demography is destiny, that destiny is not so bad.
Thank you.
