Demographic Change in Scotland

EXECUTIVE SUMMARY

Demographic change is a key issue for policy makers in Scotland and elsewhere. Changes in the size and age structure of the population will have important implications for economic growth performance, the demand for public services and overall levels of public spending in coming years. Recognising the importance of population growth, and the population profile, to economic growth, the Scottish Government Economic Strategy includes a Population Growth Purpose Target of "[matching] average European ( EU15) population growth over the period 2007 to 2017, supported by increased healthy life expectancy…"

Demographic change (population growth and population profile) - and, in the case of Scotland, progress towards the population growth target - is determined by changes in mortality, fertility and migration. Each of these have individual implications for policy and service delivery, and collectively determine the overall demography of a country in terms of both population size and structure. It is therefore important to have good evidence in relation to each of these areas to understand the dynamics of demographic change and investigate the impact on, and implications for, policy and services.

Population growth

Scotland's population stands at 5,194,000 (2009 mid year estimate), an increase of 25,500 on the previous year. After many years of decline, Scotland's population has increased in each of the 7 years to 2009. Looking at recent years, the current overall picture is of one of growth, with increased net in-migration and fertility, as well as increased life expectancy, all contributing to overall growth.

The annual population growth rate of 0.49 per cent recorded in 2008-9 was an increase on previous years. Improved population growth has, however, also been a feature in other EU countries in recent years so, although Scotland has made some positive progress towards matching EU15 population growth, there is still a gap and further gains will need to be made to close the gap. Further, population projections indicate an increasing gap between projected population change and the growth required to meet the population target. It is, thus, important to be aware of, and understand, the dynamics of mortality, fertility and migration and the factors which might influence them if the target is to be met.

Population ageing

• Scotland's population is continuing to age, with a 50% increase in over 60s projected by 2033.
• There is a strong urban/rural dimension to the ageing population; while 17% of the population are over 60, this age group makes up 21% of the population in several rural local authorities.
• Scotland's dependency ratio is projected to increase from 60 per 100 to 68 per 100 by 2033.
• Age related public expenditure in the UK is projected to increase from 20.1% of GDP in 2007-8 to 26.6% in 2057.

Scotland's population is ageing, and ageing somewhat more rapidly than the other UK countries. This has implications for the dependency ratio (the ratio of those of working age to those above/below working age), the economy, demands on public services, and tax revenues for supporting such services. However, it is important that the debate also recognises the potential positive implications of an ageing society. For example, those who remain in the workforce will contribute to tax revenues, as well as potentially increasing overall levels of labour market participation, and, as a result, economic growth. Older workers and retirees are also important consumers of goods and services - and as a result of demographic change will account for an increasing proportion of total consumers - whilst an ageing population is also anticipated to give rise to new or increased markets (and employment opportunities) in order to meet the needs of changing demand patterns. Mortality, life expectancy and healthy life expectancy

• The annual number of deaths in Scotland in 2009 (53,856) was the lowest ever recorded.
• Reduced mortality in relation to the "3 big killers" collectively (cancer, heart disease, stroke) has been notable.
• Life expectancy at birth in Scotland stands at 75 for men and 80 for women.
• Healthy life expectancy is increasing but not at the same rate as life expectancy.
• Health inequalities in Scotland result in significant variation in mortality, life expectancy and healthy life expectancy, with deprivation being a key determining factor.

Mortality, life expectancy and healthy life expectancy are all improving in Scotland, although the overall improvements mask significant geographic variations with deprivation being a key factor. Nevertheless, despite recorded improvements Scotland still lags behind other European countries.

The increasing numbers of older people in the community as a result of improving life expectancy have implications across a range of policy areas, particularly in relation to health and social care. However, older people also make a valuable contribution to society across a range of areas, for example, in relation to caring, and it is important that the positive implications of increasing numbers of older people in society are recognised. As such, policy in Scotland aims to increase life expectancy and HLE, as well as enabling older people to contribute fully to society.

Fertility

• The 60,000 births in 2008 was the highest since 1995.
• The birth rate in Scotland has increased over recent years (although the most recent figures (2009) show a slight drop), but continues to be the lowest of the UK countries.
• The birth rate is lower in cities and higher in surrounding commuter areas and rural areas.
• In relation to their English counterparts, Scots women delay longer between births and are more likely to "stop at two", both of which contribute to (but do not fully explain) the different birth rates in the 2 countries.
• A range of social and environmental factors including educational qualifications, female employment, views on gender equality, friendship networks and family friendly neighbourhoods appear to be linked to fertility.

The number of births in 2008 (60,041) was the highest since 1995, with the figure for 2009 (59,046) showing just a slight fall. However, the total fertility rate (1.77 in 2009) remains below the level required to maintain the population. Fertility is important as it contributes to population growth (or decline), and the population profile. Natural population change (ie, the difference between births and deaths) provides a longer term and more sustainable solution to growing the population than migration; fertility also has a bigger impact on the age profile of the country (and the dependency ratio in the longer term) than life expectancy.

The increased birth rate in recent years has made an important contribution to population growth. However, it is not yet clear if this positive trend will be maintained in the longer term, and a better understanding of factors which influence fertility in Scotland would be helpful.

Migration

• Recent gains in net migration - peaking at 27,000 in 2007 - have had a significant impact on Scotland's population gains.
• About half of migrants to Scotland are from the rest of the UK, the vast majority of whom are from England.
• About half of overseas migrants to the UK are from the EU.
• Migrants from the EUA8 countries have contributed to the rise in net in-migration, with Poland being the most common country of origin.
• About a million people born in Scotland currently live elsewhere.
• Migrants (in and out of Scotland) tend to be young and single, with a fairly even split between males and females.
• The main factors in migration decisions are economic, employment and study related.

Scotland has, historically, been a country of net out-migration. In recent years this trend has reversed, as a result of both retention of the Scots-born population and increased in-migration. This trend is significant as migration provides the only option for significant short term population growth.

Net in-migration has been the most important factor in Scotland's recent population gains, and policy activity to date in support of the population growth has concentrated on maximising net in-migration. Although this appears to have been sustained through a period of economic downturn in Scotland, migration is the element of population change most open to fluctuation as a result of a range of external and internal factors (eg economic conditions in Scotland and the UK and elsewhere; migration policies in the UK and elsewhere), and the long term picture regarding migration to/from Scotland is not certain.

Concluding remarks

Demographic change is complex, with links between the different drivers of demographic change, and a range of social and economic factors which can impact on trends, leaving projections open to uncertainty. Scotland's population target implies a role for government in influencing demographic trends, as well as in responding to demographic change This dual role highlights the importance of understanding the drivers and implications of population change, and ensuring that evidence is available to allow informed policy decisions in this area.