From 29 November to 1 December 2021 the Wittgenstein Centre for Demography and Global Human Capital (IIASA, OeAW, University of Vienna) held its annual conference. The focus of the 2021 conference was on the causes and consequences of depopulation, an issue very much in the spotlight of the European Commission and beyond.
In the public and policy discourse, negative views are often emphasised but could population decline create opportunities? The conference brought together researchers from around the world working on population decline and its consequences from demographic, economic, sociological, political, environmental and geographical perspectives.
Demographic drivers of depopulation: Accounting for emigration in population replacement is crucial for better suited policy responses
Low fertility and emigration are two principal demographic forces shaping the onset and the pace of population decline. There is considerable confusion in the public debate on the role played by these two elements.
In South-Eastern, Central and Eastern Europe, outmigration has been the main driver of depopulation. In Latvia, for instance, which has lost almost one-third of its population in the last 30 years, only one-fifth of the decline is accounted for by the negative balance of births and deaths; the remaining four-fifths is due to emigration. Conversely, countries with highly positive net migration can enjoy a stable or even increasing population despite fertility rates far below the replacement level of 2.1. For instance, in a country with high net migration like Sweden, the total fertility rate (TFR) that would ensure generation replacement is estimated at below 1.2 children per woman when adjusting for migration. Thus, the actual TFR of 1.8 (2018) will lead to a substantial increase of the Swedish population under the current migration regime. By contrast, replacement level fertility needed to offset outmigration stands at much higher values for emigration countries: in Romania or Bulgaria, for instance, replacement fertility would need to be about 3 children per woman once accounting for outmigration. Investments into family-friendly policies cannot be expected to raise fertility to such high levels as they exceed fertility ideals in countries facing population decline. Thus, policymakers should not turn a blind eye to understanding the reasons for outmigration and to policies aimed at attracting return migrants.
Depopulation trends more pronounced at the local level
Depopulation is more associated with rural or remote areas but the divisive line between growing and shrinking regions does not follow an urban-rural divide. Intra-regional migration trends, which shape population dynamics in shrinking regions, are closely linked to life course. While young adults leave for opportunities to study and work in cities, other areas can attract older populations as residential preferences change during life course. Remote and sparsely populated regions face difficulties in keeping families and young adults because of loss of services (in particular schools) and infrastructure, which further impacts (future) population change. A case study on Greece presented at the conference showed that international migration is also not a solution for mitigating population decline of remote depopulated regions as international immigrants tend to move on in search for better opportunities. Policies aimed at offsetting macro trends, be it ageing or migration, do not yield the desired outcome. The focus, thus, needs to be at (rural) development policies, cohesion and locally tailored social policies that support diversely ageing regions, address the lack of opportunities for residents and marginalized social groups. In light of the pandemic, some of the rural regions may seize the opportunity that the emerging change in the nature of work and digitalization can bring.
Depopulation and Climate Change: a two-sided coin
Climate change is perhaps the most disputed driver of future population decline. So far, the evidence on how it is linked to international migration has been inconclusive, but the effect of environmental change on internal or regional cross border movements is already well documented. Data of bilateral movements between 1960 and 2015 within 69 countries around the world demonstrate a meaningful impact of climate change (specifically, the aridification) on migration.
Globally, depopulation can be viewed as a chance for a more sustainable development helping to fight the climate crisis and environmental degradation. However, evidence from Japan presented at the conference suggests that these hopes may be too high as there seems to be a negative relationship between change in population and in energy consumption: shrinking regions show higher energy consumption per capita than growing ones.
Consequences of depopulation: There is no need for alarmism
According to the UN Population Division’s forecasts, all countries will face substantial declines in population growth rates over the 21st century and about 55% of countries will end up facing depopulation by 2090. While the population shrinking will be moderate compared to other historical periods, it will nevertheless pose economic and other challenges regarding: (1) the strategic consequences of depopulation; (2) the negative economic effects of a shrinking population with respect to economies of scale; (3) the sustainability of social security and pension systems; (4) the consequences for investment, v) the effects on technological progress of an ever older population; and (5) concerns with respect to health expenditures of an ageing population.
However, there are behavioural changes that partly counteract the negative economic consequences such as increasing educational investments when families have fewer children, which, in turn, raises future productivity; increasing savings of people who expect to live longer, which, in turn, raises investment; and rising (particularly female) labour force participation when fertility falls, which partly compensates for the fall in the number of workers.
A focus on labour supply itself may provide an unduly negative outlook on the impact of population decline. Empirical analysis based on historical cross-country data shows that labour markets adjust to population decline in a way that differs from a simple reversal of how they would adjust to population growth, and provides suggestive evidence that output losses are cushioned through increases in participation rates and a decline in unemployment. Together with an increase in wages these responses also tend to lower inequality, generating an altogether more balanced or even favourable outcome.
In addition to the described behavioural changes, there are many levers by which economic policies could address the negative effects of depopulation. Chief among them are investments in technologies that raise productivity and alleviate the burden of work and investments in physical-, cognitive-, and mental health, which would allow people to participate in the labour market long and more productively and could help alleviating the burden of dementia.
Challenges of depopulation: demographic, social and policy-related perspectives
In the public understanding, depopulation is often understood as a linear process. Studies show, however, that it is strongly dependent on culture. In China, for instance, depopulation of rural areas may not lead to a loss in the capacity to build up human capital, as migrant workers typically remain firmly attached to their home regions and send large remittances. Furthermore, population decline can be non-linear due to the mutual reinforcement of ageing and population loss, as well as due to agglomeration effects, where the build-up of age-specific infrastructures and networks can strongly reinforce the concentration of specific age-groups within certain areas and, thereby, greatly increase spatial (rural-urban) inequality.
Finally, depopulation is subject to large uncertainty, in particular in respect to typically volatile migration flows. Reduction in uncertainty is important for local and regional planning. Therefore, it is important that public planners engage in constant stakeholder dialogue in order to listen to the needs of citizens and adapt and coordinate public and private planning.
This policy insight brings in a nutshell some of the key highlights of rich and varied contributions from numerous scholars, disciplines, geographies and socio-cultural as well as political contexts beyond those of industrialised European countries. We invite the readers to visit the conference website which now hosts recordings from the sessions and additional materials on presented talks and posters.
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