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9  Conclusion

The basic demography of population ageing in New Zealand is well known. The proportion of the population in older age groups is increasing, which will raise old-age and total dependency ratios over coming decades. Some aspects of population ageing are, however, less well known.

Commentaries on population ageing often overlook the fact that ongoing increases in total dependency ratios can be seen as returning New Zealand to a long-run average. It is often assumed that high rates of in-migration could reverse these trends; such assumptions are, however, incorrect.

As always, national averages obscure substantial heterogeneity. Because of a history of higher fertility and higher mortality, Maori and Pacific peoples have young population structures quite different from the New Zealand population as a whole. The extent and rapidity of population ageing also varies sharply between geographical regions within New Zealand. Moreover, although statistics on broad age groups show a slow and inexorable movement towards an older age structure, the growth rates of narrowly-defined age groups often change rapidly and erratically. Internationally, too, there is heterogeneity. Because of its relatively high fertility rates, the New Zealand population is ageing and more slowly than many other OECD countries

Current Statistics New Zealand projections, like those of most national statistical agencies, can somewhat understate uncertainty about future demographic trajectories. In particular, they may understate the potential for continued gains in life expectancy.

The policy significance of the broad structural transition towards an older population is well recognised. However, the nuances and complexities also have practical implications. They affect, for instance, immigration policy, optimal funding arrangements, the fairness of inter-generational and inter-regional transfers, appropriate levels of reserve capacity for welfare services, New Zealand’s relative economic prospects, and the plausibility of fiscal and economic projections.

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