Demographic Change in Scotland

7. CONCLUDING REMARKS

7.1 Demographic change is complex. A range of factors impact on demographic change overall and individually on fertility and migration decisions, and morbidity and mortality rates and life expectancy. Context is crucial, making projections in relation to fertility and migration in particular open to uncertainty. For example, it is not yet clear how the economic downturn will impact on migration or fertility decisions in the medium term ⁴⁹. Further, although it is possible to look at the drivers of population change - mortality, fertility, migration - and their impact separately, there are also links between them. To understand demographic change - and the implications for Scotland's population growth target - it is important to understand these linkages. For example:

• The current population structure is the main determinant of the future structure of the population, and it will require a considerable period of time before sustained changes in the drivers of population change influence the overall structure of the population. Therefore, we can be certain that Scotland's population will age over the coming decades, but changes in the drivers of population growth can influence the rate at which it ages.
• If the ageing population and reduction in the working age population makes Scotland less competitive, labour market participation rates may fall, and Scotland may become a less attractive place for migrants.
• Migrants have contributed disproportionately to the increased birth rate in Scotland in recent years. A reduction (or indeed increase) in migrant numbers may, therefore, also impact on the fertility rate. Migrants who choose to return home may also take children with them, thus impacting on the age profile of the population as well as total population numbers, although evidence from elsewhere suggests that the presence of children is a factor supporting long term settlement ⁵⁰.
• While migrants to Scotland have a positive impact on demographic change in the short and longer term by boosting the numbers of those in the population of working age likely to have children, those migrating from Scotland come from the same age group and have the opposite impact. Thus, in and out-migration are of equal importance in growing the population, and retaining the current population (Scots-born and non Scots-born) is as important to growing the population as attracting new migrants.
• The ageing population will present new opportunities as well as challenges, particularly as overall demand patterns start to reflect the preferences of an older population. The opportunities presented by an ageing population are still unclear; increasing demand for care and medical services, the development of assistive technologies and the increasing numbers of healthy older people buying goods and services, though, could all create jobs and potentially attract migrants.

7.2 In addition, the implications of particular aspects of demographic change can also be complex, reaching beyond the immediate observed impact, for example:

• A low fertility rate has implications for the numbers of people entering the working age population in future years and the future supply of paid (and unpaid) carers for older people who will form an increasingly large proportion of the population.
• The biggest contributing factor to the population age profile is fertility, rather than mortality (ie, low fertility will reduce the numbers in the younger age groups, thus increasing the proportions in the older age groups). So, the increased birth rate in recent years will impact on the age profile in a positive way, although it will not affect the absolute number of older people in the population.
• An increased fertility rate will boost the population in the longer term but in the short term will have a negative impact on the dependency ratio.
• There is potential to increase labour market participation amongst women and those in the 50 plus age group but these groups may also feel they have to or want to care for the increasing numbers of elderly people in the ageing population, or for grandchildren to allow younger parents to work.

7.3 In the light of the current situation and projections, there are choices to be made: should policy-makers try to influence demographic trends (eg, through migration and fertility/family policies) or should they work to respond to the new population profile, or (more likely) a combination of both? Implicitly, Scotland's population target indicates a role for government in influencing demographic trends, with policy activity concentrating on migration/retention and improving HLE. It is, though, important to at least be aware that fertility is part of the equation, particularly in the longer term.

7.4 At a more specific level, key issues for policy in the area of demographic change might include the following:

• The attraction and retention of migrants (and the Scots-born population in England and elsewhere) to maintain, and grow, the working age population and support GDP growth.
• The development of economic conditions that ensure the right type of jobs to attract and retain people.
• Creation of conditions that support an increased fertility rate.
• Consideration of how to fund FPC and other services for the increasing number of older people in the population.
• The development of further initiatives to improve HLE (to bring benefits at the individual level, but also to increase labour market participation and reduce health and care costs for society as a whole).
• The identification of opportunities presented by the ageing population.

7.5 With demographic change impacting on so many policy areas at national and local levels, it is crucial that good quality information is available to allow informed decisions to be made. This paper has drawn on some of the data currently available in relation to demographic change. Given the issues identified and the evidence presented, it will be important that Scottish Government analysts, other public sector bodies and academia work together - and in conjunction with policy makers - to ensure the best evidence is available in relation to demographic change in Scotland.