Population Ageing, Pensions and Immigration

Importance of the population age structure

Among the factors of the demographic situation, there is one which plays a very specific role, namely that of the population age structure. Yet, because this structure varied little up to the nineteenth century, demographers remained unaware of its importance for many years. Consequently, it was thanks, above all, to its disruptive influence on international comparisons based on crude rates that age composition became a specific topic of study. It was not until later, in a more recent period, that the need to extend these studies to other areas of key importance became clear, and it is Mr Sauvy who holds the honour of being the first scholar in France to highlight the economic consequences of population ageing.(1)

The effects of population age structure are multiple. First, in the purely demographic field, and aside from the technical problems it raises, age structure is often one of the reasons behind the slow speed at which many demographic phenomena emerge. For example, a reduction in fertility to below replacement levels does not immediately produce a surplus of deaths over births in a “young” population, because as cohorts of increasing size enter their reproductive lives, the number of births continues to rise for some years, while the increase in deaths is temporarily slowed by a decline in deaths of young children (who account for a notable share of all deaths). Births thus continue to greatly outnumber deaths for many years, even if fertility declines substantially.

The French people’s persistent lack of concern for such an alarming demographic situation can be attributed to this circumstance, and likewise to immigration, which also masks their inadequate level of fertility. We note, indeed, that it is above all through changes in age structure that immigration has played this role, for the increase in population size resulting from inflows of foreigners alone would not have given such a misleading impression had these foreigners not arrived at childbearing ages (ages at which mortality is low), thus swelling the numbers of births while barely affecting numbers of deaths. The balance of births and deaths could thus remain favourable for longer, failing to reflect, for several decades, the profound internal imbalance of the French population.

The age structure thus influences the population prospects of a country in a relatively near future. It also modifies them over a longer time scale. Hence, all other things being equal (same fertility and same mortality), a million citizens drawn at random in Italy or the Netherlands, and a million French people giving birth and dying in the same way as these Italians and Dutch, would not give the same population figure 100 years from now, by which time, the Italians and Dutch would be almost 20% more numerous than their French counterparts.(2)

These demographic effects of age structure are compounded by economic effects whose importance cannot be understated. This is just one of the many points where economic and demographic phenomena are interlinked. Indeed, it was through a strange aberration that political economy, of which demography was originally a major chapter, lost interest in this part of its domain, leaving statisticians to pursue the exploration alone and to establish demography as an independent discipline; economists, in the meantime, confined man, the key factor of production and consumption, to the mere role of economic entity, homo economicus, placed on the same footing as banknotes, wheat, coal, transportation, capital and services, all trampled upon by the implacable mechanism of a wretched “harmony”. It was only under the pressure of social circumstance that political economy agreed to a somewhat more human approach, and returned its attention to what, in a man, is more than just a “worker” or a “purchaser” in possession (or otherwise) of “money”. As economists thus achieved a more realistic conception of production and consumption, new horizons opened up before their eyes, notably regarding both the economic consequences of demographic phenomena and the demographic effects of economic factors.

The demographic-economic problems raised by changes in the pace of population growth are certainly those which most legitimately deserve attention in many countries. It would certainly be...