The myth of the demographic time bomb

P. Scrivener says there is too much doom and gloom about our ageing population

Reprinted with permission from the Oct/Dec 2002 issue of Right Now!

Britain has an ageing population due to the combination of a decline in birth rates and an increase in life expectancy. This situation will become more marked during the first three decades of this century when the post-Second World War baby boom generation will be retiring.

But the strongest force in this change is falling fertility rates. In the succeeding 'baby bust' generation of the 1970s and 1980s, birth rates fell below replacement levels in most advanced countries. The current birth rate in Britain is about 1.7 per woman but needs to be 2.1 to replace the existing population.

It is widely assumed that these facts and figures imply enormous future social problems -- that there will be a 'demographic time bomb' as a consequence of which society will be faced with a chronic labour shortage and productivity deficit. Yet I believe this to be a myth, based on flawed assumptions.

In the myth, it is assumed that present trends will continue, thus the responsibility of providing for the larger numbers of elderly people will fall on a relatively diminishing working population for whom it will be a burden, and it is assumed that the solution is immigration.

Phil Mullan's book The Imaginary Time Bomb: Why an Ageing Population is not a Social Problem provides a good argument as to why immigration is not necessary to solve this non-existent problem. This needs to be more widely accepted, particularly in the political establishment. In this article I have included the points he raised.

Why the pessimists are wrong

The pessimists use an arbitrary retirement age. British society has tended to accept the government's pension age or retirement age as the dividing line between active adulthood and old age, but when pensions were first introduced in Britain the retirement age was 70.

The compression of work into fewer years of longer hours does not fit well with increasing longevity, and there have been a number of authoritative calls from parliament and the actuarial profession against early retirement.

They assume that the present retirement age equates to the age at which elderly people become a burden. Commentators have taken the ratio of over 64-year olds to the population of working age (usually taken as the 16 to 64 age range) as the key trend in the rise in the elderly 'dependency' ratio. But continued improvements in living conditions make contemporary and future generations of the elderly fitter and healthier. And as across Europe and America healthcare costs are concentrated in the last six months of life, projections should be built up by counting back from the forecast date of death rather than from the date of birth.

They ignore economic growth. It is assumed that an ageing population will bankrupt the state pension scheme. However, the future rate of economic growth and the level of wealth creation determine affordability.

It is the types of jobs and technology, as well as the number of working people, that determine society's productivity. Modern societies double their wealth about every 25 years. This pace of expansion projected into the next half-century dwarfs the extra cost for society from more elderly dependants. In any case, industrialised societies are already productive enough to produce sufficient wealth to provide for the present elderly population, and even quite low levels of growth will satisfy even the most extreme projections of the future pace of ageing. (Indeed, using immigration to increase the labour force will depress wages, discourage investment in capital, slow the increase in productivity and decrease competitiveness -- as happened in England with the cotton industry.)

Because of increased wealth, Western societies have been able to manage a fall in the ratio of working people to retired people from 12:1 in 1900 to around 3:1 today.

They also ignore the possibility of encouraging changes in fertility. More influential on demographic ageing than increased longevity or the reduction of premature death, has been the fall in fertility rates. With each generation smaller than its predecessor the average age of the population rises. The proportion, and not necessarily the numbers, of old people rises.

Further declines in old age mortality will be much slower than over the past few decades. Then, if fertility were in the region of the replacement rate, population numbers and the age structure of the population would tend to stabilise. So, if society fears that there may be a problem with an ageing population (though this has been shown not to be the case), action could be taken now to encourage an increase in the birth rate to replacement levels.

The main cause of the decline in the fertility rate appears to be the increase in the numbers of working women, and the continuing inadequacy of proper childcare facilities discouraging pregnancy. Women tend to marry later and get pregnant later.

There are a number of actions that could be taken: taking one wage into account when calculating mortgages thus allowing one partner to stay at home to look after children; encouraging a more positive attitude towards family creation as the source of personal happiness and security and the basis of a stable society; the workplace, the tax and welfare system, such as increasing child benefit, could be made more favourable to women, so that they are able to have more than one child each.

Finally, the mythmakers use projections instead of forecasts. The official projections for Britain are that ageing will accelerate in the first third of the 21st century. Although these projections are widely used to back up the case for a demographic time bomb, a member of the Government Actuary's Department has written "the one certainty of making population projections is that these projections will, to a greater or lesser extent, turn out to be wrong as a forecast of future demographic behaviours".

A projection based on the present state of affairs cannot forecast the future, because present trends may not be maintained. Changes to fertility rates could significantly alter the situation. Even if all the projections are accurate, there will be a peak around 2040 in the proportion and numbers of over64s. Mullen tells us that the familiar steadily ascending lines on the charts used by alarmist commentators do not extend much beyond 2040. After this time, the proportion of over-64s declines.

Higher fertility, with average family size returning to 2.1 from the current average of around 1.7, would stabilise the dependency ratio, whereas even substantially higher levels of immigration do not.

If there were a problem, it could be solved in a relatively short time by encouraging an increase in the fertility rate in the ways described above, thus increasing the production of future workers, and by raising the retirement age to 70 or 75.

However, even these modest measures may well not be necessary if more people saved or invested for their old age rather than relying on the current contributions of employers and employees (the present method of financing state pensions) to pay their pensions. But, so far, almost the only policy that has been adopted by government for solving this mythical problem is immigration. This has profound and permanent consequences for the native population.

Why is the myth perpetuated?
It has been suggested that this myth was made up by insurance companies -- who have an interest in selling pensions. But more importantly, despite the fact that it is recognised in government circles that the population projections used are unreliable, the myth is perpetuated by the Government itself, as well as by its tame commentators.

Successful and enduring societies show a high degree of homogeneity. Immigration and the doctrine of multiculturalism undermine such societies. In the case of the UK, has this been brought about deliberately or through incompetence? It has been said (by a leader-writer in the Daily Telegraph) that immigration (in this case in the form of 'asylum seekers') affords opportunities for Labour: "For the salient characteristic of New Labour ideology is its determination to redefine Britain and Britishness - through sweeping constitutional and cultural change. It calculates that the enduring success of this project will depend upon sweeping demographic change as well ... it knows that newly arrived groups are likelier to vote for big-government parties than not."

The belief that immigration is the only cure for the 'problem' is a reflection of the current state of Western thought. This is dominated by a profound aversion by elected representatives, and the political elite to defending the long-term interests of the people who have lent them power for just that purpose, as well as a disrespect for national feeling and denigration of self-assertiveness among their fellow-Westerners.

But public opinion has always opposed large-scale immigration. This is sufficient reason, even if there were no others, to discontinue it. A nation must be allowed to retain its homeland. It is perverse to propose a solution which will serve to destroy the people whom it is said to benefit.

P. Scrivener is compiling an anthology of essays to be called "English Witness", on behalf of Steadfast
The Imaginary Time Bomb: Why an Ageing Population is not a Social Problem, Phil Mullan; (I.B Tauris) 2000.
"Use over 50s or economy will fail, businesses warned", John Carvel; Guardian, 2nd October 2001.
The Death of Europe, Anthony Scholefield; Futurus, 2000.
The Death of the West, Patrick Buchanan; Thomas Dunne Books, 2002.
"Identity Crisis", David Coleman; Spectator, 6th January 2001.