The Demography of Australian Ageing over the Next Decade:

Certainties, Surprises and Implications for Government

byGraeme Hugo

ARC Australian Professorial Fellow, Professor of Geography and Director of the Australian Population and Migration Research Centre ,

The University of Adelaide

Presentation to COTA National Policy Forum, National Press Club, Canberra22 July 2014

Outline of Presentation• Introduction• The Growth of Australia’s Older

Population• Drivers of Ageing in Australia• Changing Composition• Changing Distribution• Implications for Government Policy• Conclusion

Key Issues• The Certainties of the Demography of

Ageing• There are no policy “silver bullets”• Australia is well placed

demographically to accommodate the change

• However initiation of a range of initiatives needs to be done now

• An opportunity as well as a challenge

Four Certainties of the Demography of Ageing in

Australia• Population aged 65+ will increase by

85% between 2011 and 2031• Percentage aged 65+ will increase

from 13.8 in 2011 to 18.7 in 2031• The characteristics of the older

population will change• Their spatial distribution will change

Australia: Population Change by Age, 2006-11

Source: ABS 2011 Census

2006 2011 % Change

Total 19,855,291 21,507,716 8.3

65-74 1,373,435 1,627,407 18.5

75+ 1,270,935 1,384,880 9.0

65+ 2,644,370 3,012,287 13.9

15-64 13,273,710 14,351,405 8.1

Australia: Population Change by Age, 2011 and Projected 2031

Source: ABS Estimated Resident Population and 2031 Projections Series B

2011 2031 % Change

Total 22,340,024 30,501,192 36.5

65-74 1,681,931 2,878,511 71.1

75+ 1,405,980 2,826,768 101.1

65+ 3,087,911 5,705,279 84.8

15-64 15,018,500 19,255,273 28.2

Australia: Comparison of Projected Growth of Population, 2031

Source: ABS 2013 Projections

 

  Series A Series B Series CDifference Series A and C in 2031 (m)2011 (m) 2031 (m) 2031 (m) 2031 (m)

Total Population 22.34 31.87 30.5 29.3 2.57

65+ 3.09 5.83 5.71 5.69 0.14

Percent 65+ 13.8 18.3 18.7 19.4 1.1

Australia: Age Sex Distribution, 2011 and Projected 2031Source: ABS 2011 Census; ABS Projections, Series B, 2013

1500000 1000000 500000 0 500000 1000000 1500000

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-94

95+

Number

Age

2011 (shaded) and Projected 2031

Males Females

WHY IS AUSTRALIA’S POPULATION AGEING?

• Fertility – the rate at which women in that area were having children 65-90 years ago.

• Mortality – the rate at which older people are lost to death.

• Migration – the extent to which older people move into or out of the area.

• The ‘ageing in place’ of residents in the area into the 65+ age groups.

Australia: Total Fertility Rate, 1901-2012Source: CBCS, Demography and ABS, Births Australia, various issues

Australia: Age Structure 1961 to 2011 Showing Baby Boomer CohortSource: ABS Censuses

1961

1986

2011

800 600 400 200 0 200 400 600 800

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Number (000s)

Age

Males Females

800 600 400 200 0 200 400 600 800

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Number (000s)

Age

Males Females

800 600 400 200 0 200 400 600 800

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Number (000s)

Age

Males Females

Australia: Expectation of Life at Birth, 1870-2011Source: Hugo 1986 and ABS Deaths Bulletins

Expectation of Life at Birth

Males Females

1947 66.1 70.6

1981 71.4 78.4

2011 79.7 84.2

Australia: Expectation of Life at Age 50, 1901-1910, 1970-1972 and 2011

Source: ABS

Year Males Females 1901-1910 21.2 23.7 1970-1972 23.2 28.3 2011 32.0 35.6

Key Questions on Longevity

• Are we increasing the maximum age people can reach or are just a greater proportion getting closer to the maximum age which remains fixed?

• Proportion of years spent with and without disability, concept of disability free years

Are Baby Boomers Healthier than Previous Generations?

• Baby boomers are in many ways a privileged generation being the first generation to grow up in an era of increasing affluence and prosperity.

• They have unprecedentedly high levels of education compared with earlier generations.

• They grew up in an era of expanding job and educational opportunities.

• They were the first generation to grow up having access to immunisation and antibiotics.

• They have substantially lower levels of smoking than previous generations.

Are Baby Boomers Less Healthy than Previous Generations?

• Firstly, the very medical breakthroughs which have ‘rescued’ baby boomers from dying of a heart attack or stroke like the previous generation may in fact leave them with a chronic illness or disability.

• Secondly, baby boomers, more than previous generations, have adopted sedentary life styles and have a higher incidence of obesity than any previous generation.

Uncertainty About This Question in Australia

• Global Burden of Disease Study 1990-2010 found in high income countries decrease in mortality offset by increased years of living with disability

• In Australia suggestion that this has not been the case but there is a lack of data to be definitive

Proportion of the Population with Disabilities, 1981-2012

Source: ABS, 1999 and 2013b

Age Group 1981 2003 2012

45-54 16.7 21.6 18.1

55-64 27.1 33.8 29.4

65-74 34.6 44.4 42.0

75+ 53.1 68.0 67.6

All People 13.2 20.0 18.5

Australia: Disaggregation of Life Expectancy Into ‘Disability Free’ and ‘With

Disability’ Years, 1998 and 2012 (Years)Source: AIHW, 2014, 3

Male Female

1998 2012 1998 2012

Life Expectancy at Birth 75.9 79.9 81.5 84.3

Disability Free Expectancy 58.0 62.4 62.1 64.5

With Disability Expectancy 17.9 17.5 19.4 19.8

• Unrecognised burden of mental illness especially dementia (Global Burden of Disease Study)

• Access Economics – Number with dementia2011: 266,574

2030: 553,285

2050: 942,624

• Recent evidence that these numbers can be substantially reduced by lifestyle and diet adjustments

Australia:A Country of Immigration

• 26.1 percent born overseas in 2011• 18.8 percent Australia-born with an

overseas-born parent(s) in 2011• 908,049 persons temporarily present at

30 June 2011• Without postwar migration the Australian

population would be less than 13 million• 19.2 percent of Australian households

use a language other than English at home

Australia: Age-Sex Distribution of Recent Permanent Settler Arrivals, 2012-13

Source: DIAC unpublished data

15000 10000 5000 0 5000 10000 15000

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65+

Number

Age

Males Females

Australia: Settler Arrivals by Region of Last Residence, 1947 to 1996 and Permanent Additions by Region of Birth, 1997 to 2013

Source: DIBP data

*194

5-47

1948

-49

1950

-51

1952

-53

1954

-55

1956

-57

1958

-59

1960

-61

1962

-63

1964

-65

1966

-67

1968

-69

1970

-71

1972

-73

1974

-75

1976

-77

1978

-79

1980

-81

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

–97

1998

–99

2000

–01

2002

–03

2004

–05

2006

–07

2008

–09

2010

–11

2012

-13

0

50000

100000

150000

200000

250000

300000

UK and Ireland Other Europe Africa Americas NZ and Pacific Middle East Asia

Year

Nu

mb

er

*July 1945 to June 1947

Note: Middle East includes North Africa from 1996-97.

Australia: Australia-born and Overseas-born Age-Sex Distribution, 2011

Source: ABS 2011 Census

6 5 4 3 2 1 0 1 2 3 4 5 6

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-84

85+

Percent

Age

Australia-born (shaded) and Overseas-born

Males Females

Australia : Persons Aged 65+ years by Birthplace, 2011

Source: ABS 2011 Census

Birthplace Total 65+ %65+

Total Population 21507719 3012281 14.0

Australia-born 15017846 1787004 11.9

MES-born 1911697 396868 20.8

CALD-born 4578176 828409 18.1

% of Total CALD 27.5

% of TotalOverseas-born 40.7

Average Annual Growth Rate 2006-11

3.1

2.7

3.7

3.6

Australia: Indian Ancestry and India-Born by Age and Sex, 2011

Source: ABS, 2011 Census

40000 30000 20000 10000 0 10000 20000 30000 40000

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-84

85+

Number

Age

Indian Ancestry (shaded) and India-born

Males Females

Australia: Age Pension Paid Overseas by Country of Residence, June 2011

Source: Department of Families, Housing, Community Services and Indigenous Affairs, 2012

Role of Immigration in Ageing

• Slight younging effect• Greatest positive impact is its impact on

productivity• Increasing diversity of Australia’s older

population

The Characteristics of Older People

• Age Vs Cohort effects• The Baby Boomers are quite different to

previous generations of older Australians when they were on the verge of retirement

• Must not assume it will be “more of the same” in working, housing, spending, use of leisure, needs and demand for services etc

Australia: Baby Boomers and Pre-war Generation As They Enter Old Age, Social Indicators

Source: ABS National Health Surveys 1989-90 and 2008-09; ABS Census 1981 and 2006

Social Indicators Baby Boomers

(1946-65) %

Pre-war Generation (1927-36)

%

Social Supports Entering later life without a spouse 34 19 Childless 14 9 Living alone 11 6

Education Completed secondary school 43 6 Bachelor degree or higher 19 3

Religion Identify as Christian 66 80

Housing Owner/purchaser 80.7 84.1 Rental 19.3 15.9

No Private Health Cover 37 42 Overseas-Born 31 21 NES Overseas-Born 20 12

Some Key Considerations• The extent to which baby boomers will be able to call

upon a partner or a child to assist in their day to day care will be considerably less than the previous generation of older Australians. Yet policy is to increase the proportion of care being delivered at home rather than in a residential care context.

• The proportion of baby boomers owning their home outright will be less than is currently the case. Yet home ownership is one of the three pillars of the Australian aged care system.

• Increasing cultural diversity presents many challenges in aged care provision because until relatively recently the population aged 85+ was overwhelmingly Anglo Celtic in origin.

Australia: Persons 15 Years and Over, Visited a GP 12 or More Times in the

Previous 12 MonthsSource: ABS, 2012

Health Status at Mid-life: Baby Boomers Compared with Pre-war GenerationSource: ABS; National Health Surveys, 1989-90, 2007-08

Health Indicators

Baby Boomersat Mid-life

%

Pre-war Generationat Mid-life

%Obesity 26 12Diabetes 9 3Asthma 10 5Hearing loss 17 8Arthritis 33 26Migraine 6 4Back problems 9 6Multiple conditions (≥3) 4 0.5High cholesterol 14 8Alcohol risk 15 11Currently smoking 18 24Emphysema/bronchitis 3 5No private health cover 37 42

Differences Within the Baby Boomer Generation

• Dangers of stereotyping• Need to look at variations within• First generation to develop

highly segmented markets

Australia: Average Household Net Worth by Age of the Household Reference Person, 1994-2012

Source: ABS, 2002, 2007 and 2013c

Housing Tenure

Tenure 45-54 55-64 65-74 75+

Percent

Owned outright 27.5 51.3 72.1 76.2

Owned with a mortgage 49.4 30.9 12.2 6.6

Being purchased under a rent/buy scheme 0.2 0.1 0.1 0.1

Rented 21.5 16.2 13.4 12.6

Being occupied rent-free 0.8 0.8 0.8 1.0

Being occupied under a life tenure scheme 0.1 0.2 0.8 2.5

Other tenure type 0.4 0.4 0.5 1.1

Total 100.0 100.0 100.0 100.0

N 2976481 2532605 1644047 1391101

Australia: Tenure by Age, 2011Source: ABS 2011 Census

Comparison of Owners and Renters: Demography

Source: SAMSS, 2007-13

Owners

(%)

Renters

(%)

Percent Employed 75.7 56.9

Percent with Degree 24.1 15.0

Currently Married 83.9 46.1

Percent in 2 Lowest SEIFA

Quintiles 34.4 49.4

Comparison of Owners and Renters: Chronic Conditions

Source: SAMSS, 2007-13

  Owners (%) Renters (%)

Diabetes 7.8 13.0

Asthma 10 16.8

COPD 4.4 8.4

Arthritis 25.9 31.6

Osteoporosis 3.8 5.6

Mental Health 15.4 29.6

At Least One Chronic Condition 47.4 61.1

A DIFFERENT SPATIAL DISTRIBUTION

Where older people live is important for a number of reasons:• Older people have lower levels of personal

mobility which means they are restricted in their ability to travel long distances to obtain services and interact.

• Housing is often the major element in older people’s assets.

• Their local area is often where their main social contacts are located.

• Their home can hold many important memories crucial to their wellbeing.

Australia: Persons Who Moved in the Last Five Years by Age, 2001-06 and

2006-11Source: ABS 2006 and 2011 Censuses

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99

Number Moved

Age in years

Moved 2006-2011 Moved 2001-06

Simplified Model of Response of Older People Entering Retirement

A Typology of Migration of Older Australians

Source: Hugo, 1988, 17

Age Type Selectivity Reason for Moving‘Young Old’60s and early 70s

Mainly Voluntary Higher Income   Lower Income 

- recreational, retirement to resort locations – environmental factor

- trade down to age-appropriate housing

- closer to children- forced housing adjustment –

renters and mortgage holders

‘Old Old’70s and over

Showing Element of Compulsion

Little Selectivity

- onset of widowhood or disability forces move to be closer to children

- inability to live independently forces need to live with children or residential care

To What Extent Will Baby Boomers Move As They Near Retirement?

• In the United States there is a clear secondary peaking in the age migration profile around retirement ages

• No evidence in 2011 Australian Census internal migration data

• Delaying due to increased workforce participation?

Australia: Changes in Participation Rates of the Older Population in the

Workforce, 1970-2014Source: ABS Labour Force Surveys

Age Group

Percent Participation

May 1970 June 1999 February 2010 January 2014

Males Females Males Females Males Females Males Females

55-59 91.5 28.7 72.9 44.1 79.4 64.4 79.0 63.5

60-64 79.2 14.9 46.9 17.6 61.7 41.8 61.8 42.5

65+ 23.2 3.6 9.7 3.2 14.8 6.4 16.0 7.5

Mixed Evidence of Increased Retirement

Migration by Baby Boomers

• Beer and Faulkner (2009, 133) found 41.5% of persons aged 55-64 had moved in last 10 years

• Olsberg and Winters (2005) found two thirds want to remain in their own homes

Australia: Rest of State Age-Sex Specific Net Migration Profile, 2006-2011

Source: ABS 2006 and 2011 Censuses

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

40,000

Net

Mig

ratio

n

Age

Males Females

Growth of Population 2006-11

Capital Cities Rest of State

Total 1.8 1.2665+ 2.45 2.9

% per annum

*Clear evidence of sea change type migration

The Potential Role of Second Homes (Study of 9 Councils)

• Located in resort areas, mostly coastal• 45% owned by baby boomers• 30.7% have definite intentions to move

permanently to them – others will increase the amount of time spent there

Age structure of persons intending to move to non resident owned property

0

50

100

150

200

250

300

0-4 5-14 15-24 25-44 45-64 65-74 75+

Num

ber

Current (2012) age

All sea change LGAs

Within two years from now Between two and five years from now

Between five and ten years from now Don't know

Changing Distribution within Cities

• Preference shown to “age in place”• However often attachment is to a local

community rather than a particular house

• Concept of “age appropriate housing”• Unknown whether baby boomers will

move more but even if they move to the same extent there will be a large impact because of their greater numbers

Types of Retirement Migration Among Baby Boomers

• Migration to environmentally amenable resort communities in coastal, riverine and other non-metropolitan areas.

• Voluntary trading down to more age-appropriate housing within metropolitan areas.

• Involuntary trading down among renters and mortgage holders who are unable to keep up payments when they cease full-time work.

Adelaide Statistical Division: Distribution of Population Aged 65 Years and Over Between

Metropolitan Sectors, 1971-2011Source: ABS 1971 to 2011

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1971 1981 1991 1996 2001 2006 2011

Per

sons

Year

Inner

Coastal

Middle

Outer

Adelaide Statistical Division: Growth of the Population Aged 65+ by SLA, 2006-11

Source: ABS 2006 and 2011 Census

Metropolitan Adelaide Sectors and Aged Care Beds, 2000 and 2013

Metropolitan Adelaide: Number Beds/1000 persons Aged 70+, 2011 and Projected 2021 and

2026Source: ABS 2011 Census and ABS for the purpose of the Commonwealth, through the

Dept. of Health and Ageing, and other governments, 2007

Suburban Sector 2011 2021 2026 Coastal 92.1 72.3 63.8 Inner 140.4 109.2 94.6 Middle 87.1 68.7 61.0 Outer 97.6 64.0 54.7 Total 98.7 71.8 62.5

Potential Role of Baby Boomers in Achieving Important National Goals

• Regional development – retirement migration as a key location leader for development in selected regional areas

• Increasing population density of suburbs, TODS

• Increasing availability of affordable family housing

• Potential role for policy

Conclusion• Much of the material presented about Australia’s future aged

population is fact rather than prediction, projection or estimate• However some uncertainties…

– How healthy will baby boomers be in old age? The signs are not good here but real efforts to reduce obesity among baby boomers could have massive dividends in improving their lives in old age but also substantially reducing demands on the health and aged care systems.

– How many baby boomers will move as they approach or enter retirement? This will be influenced by whether or not they continue working into old age, the availability of alternative housing options, patterns of partnering among baby boomers, etc.

– What will be the preferences of baby boomers for housing – both while they are fully independent and when they need care?

Projections of Aged Care Workforce Demand

Source: Productivity Commission 2011

  2010 2020 2030 2040 2050

Residential Care          

Direct care workers (FTE workers) 85,000 107,000 157,000 254,000 353,000

Direct care workers (total workers) 144,000 182,000 266,000 431,000 598,000

Total residential care workforce(direct and support workers) 189,000 239,000 349,000 565,000 785,000

Community Care          

Direct care workers (FTE workers) 11,000 41,000 57,000 82,000 102,000

Direct care workers (total workers) 19,000 66,000 92,000 132,000 164,000

Total community care workforce(direct and support workers) 22,000 78,000 109,000 156,000 194,000

Total Workforce Requirementa 212,000 317,000 459,000 721,000 979,000

a Total workforce requirement may not reflect sum of components due to rounding.

Policy Implications• Policy must be multifaceted

– Transformation of health and aged care systems– Increasing retirement age and associated

retraining, transitioning etc– Increasing workforce participation– Population issues – immigration, fertility– Focusing on potential dividends not just

challenges• Intergenerational Report. The Three Ps…

– Population– Participation– Productivity

A Fourth P – Planning, Preparation