2  Demographic projections

2.1  Construction of population projections

The rapidity and degree of population ageing in New Zealand depend on future rates for fertility, mortality, and migration. All these rates, and hence the course of population ageing, are uncertain. Researchers have recently begun incorporating uncertainty into their models by carrying out stochastic simulations (Creedy and Scobie 2002, Lee and Edwards 2001). In this paper, however, we adopt the more conventional ‘scenario’ approach. The scenario approach is unable to provide probabilities for the various scenarios, and cannot cover the range of possible futures (here, for instance, we do not allow for the possibility of very low mortality combined with very low fertility.) But it is transparent and easy to implement, and it allows the contrasting effects of variation in fertility, mortality, and migration to be identified.[1]

We make assumptions about fertility, mortality, and migration, and for each we construct ‘base’ and ‘alternative’ demographic series. Combining the three base series gives a base population variant, which we use as a benchmark. Replacing each of the base series in turn with the alternative series generates three more population variants, which can be used to illustrate the effects of changes in fertility, mortality, and migration rates. The demographic series are summarized in Table 1 and their construction explained in this section. Further technical details are provided in Appendix 1.

2.1.1  Fertility

The base and alternative series for fertility are shown in Figure 1, together with historical trends. Fertility is measured by the total fertility rate, the average number of children a woman would have over her lifetime if the year’s age-specific fertility rates were to prevail indefinitely. Demographers usually project fertility by choosing a path for the total fertility rate and using an assumption about age-patterns to derive age-specific rates. Basing projections on the total fertility rate can, however, be problematic if the age-pattern of fertility is changing, as has been occurring in New Zealand. To avoid this problem, the fertility variants shown in Figure 1 were calculated using a cohort approach, described in Appendix 1. The base variant was designed to be similar to Statistics New Zealand’s median fertility variant (Statistics New Zealand 2000), while the alternative variant brings New Zealand fertility close to the lowest-fertility countries in the OECD.

Figure 1- Total fertility rate under the base and alternative fertility series

2.1.2  Mortality

The base mortality series uses the same life expectancies as Statistics New Zealand’s median mortality variant (Statistics New Zealand 2000) in which life expectancy is assumed to stop increasing by mid-century. The alternative variant assumes that life expectancy maintains a constant rate of increase. Although Statistics New Zealand’s assumption that the increase in life expectancy will slow is still widely accepted, predictions of imminent slow-downs have been repeatedly proved wrong (Preston, Heuveline and Guillot 2001:132), and the notion that life expectancy may continue to improve past mid-century is not necessarily over-optimistic. Details of the derivation of age-specific mortality rates from the life expectancies are given in Appendix 1.

Figure 2 - Life expectancy under the base and alternative mortality series

Note: ‘Life expectancy’ refers to the life expectancy at birth for males and females combined.

2.1.3  Migration

The migration series, which are graphed in Figure 3, are expressed as age-specific net migration rates. They show net inward migration per thousand population. When combined with New Zealand’s 2001 population structure, these rates give net migration levels of slightly over 5,000 migrants per year for the base variant and 0 for the alternative variant.[2] The figure of 5,000 was chosen to match Statistics New Zealand’s median variant, and the figure of 0 to reflect the fact that averages for net migration over recent decades have typically been well under 5,000. The age-specific rates are assumed to remain constant over the entire projection period, though the absolute number of net migrants changes as population size and age-structure change. The age-specific migration rates were derived by regressing individual age-sex specific rates against overall net migration levels for the years 1996-2001. Details are provided in Appendix 1. As indicated in Figure 3, rates for the 20-24 year age group are negative, even though overall net migration is by assumption positive or zero; this has in fact been the pattern in the recent years.

Figure 3 - Age-specific net migration rates in the base and alternative migration variants, 2001-2101