Population Ageing, Migration and Social Expenditure by José Alvarado; John CreedyReview by: Christopher PrinzEuropean Journal of Population / Revue Européenne de Démographie, Vol. 15, No. 1 (Mar.,1999), pp. 99-100Published by: SpringerStable URL: http://www.jstor.org/stable/20164056 .

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European Journal of Population 15: 99-100, 1999.

Book Review

Jos? Alvarado and John Creedy, Population Ageing, Migration and Social

Expenditure. Edward Elgar, Cheltenham (UK)/Northampton (USA), 1998, pp. xii +191.

The title of this book very much describes its contents. First, it is a book

concerned with the impact of population ageing on social expenditure, and

second it is about the role of immigration in influencing both these factors.

Social expenditure is defined as government expenditure which varies with age

(comprising pensions, unemployment benefits, health, social welfare, employment and education). The book focuses on Australia, although many of the fundamental

conclusions on the impact of demographic change on social expenditures can

be generalised to other countries, at least to those with a similar structure of the

population, the welfare system and the flow of immigrants.

Essentially, the focus of the book is on a set of population and social expenditure

projections, extending other analyses by considering a wider range of assumptions

regarding immigration and the social and economic characteristics of immigrants in the Australian context. This arithmetic exercise has several merits: the book

is clearly written, the reader can easily follow the authors' projection techniques since there is no black box, useful illustrative examples are provided, and there is

no improper medley of facts and policy issues. The authors give less attention to

policy interpretation; there is no mentioning of any type of social policy reform or

response to demographic change. One part of the book gives a concise summary of the state-of-the-art on

demographic and economic aspects of population ageing (including such relevant

issues as the relationship between demographic transitions and economic growth,

inter-generational fairness, ageing of the labour force, or the labour market impact of immigration) and on economic consequences of immigration. Unfortunately, this analysis is not much reflected in the social expenditure projections thereafter.

A major weakness of the approach chosen is that age-specific social expenditure

patterns are essentially kept constant for the next sixty years. This presupposes that

constancy in age-specific cost patterns is likely, although - with rapidly declin

ing mortality - constant age-specific health expenditures, to give an example, are

unlikely to prevail. Further, it infers that research has not captured some of the

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100 BOOK REVIEW

future possible directions of change. Yet we know that recent changes - such as

the rapid increase in female economic activity - will have an impact on future

pension claims (more in countries with contribution-related pension schemes than

in Australia), or on unemployment, employment or social welfare expenditures. A major result of the book is that immigration can retard the ageing process

and its impact on the ratio of social expenditure to GDP to some extent, depending on the size of the intake as well as on the age structure of immigrants. In this

respect, the authors present a number of useful results. The birthplace composition of immigrants, on the other hand, has a negligible effect on the projections which

raises the question whether other decompositions of the immigrant population could be more appropriate.

An interesting chapter at the end of the book deals with examining the statistical

properties of the social expenditure projections. This section very much charac

terises strengths and weaknesses of the book. It is a stimulating mathematical

statistical exercise under the assumption on little knowledge about potential future

change. However, the results are only of minor relevance to social policy. A well

argued sensitivity analysis on some of the main variables, such as the participation rates or the age-specific cost profiles, could probably improve the informative

content.

I would recommend this publication to those who want to know more about

the impact of demographic change, notably of ageing and immigration, on social

expenditure, as a kind of basis for further social policy analysis and interpretation.

Naturally, the book is of particular relevance to Australian readers.

Christopher Prinz

European Centre for Social Welfare Policy and Research, Vienna

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