Advances in Spatial Science Cristina Martinez Tamara Weyman Jouke van Dijk Editors Demographic Transition, Labour Markets and Regional Resilience Advances in Spatial Science The Regional Science Series Series editors Manfred M Fischer Jean-Claude Thill Jouke van Dijk Hans Westlund Advisory editors Geoffrey J.D Hewings Peter Nijkamp Folke Snickars More information about this series at http://www.springer.com/series/3302 Cristina Martinez • Tamara Weyman • Jouke van Dijk Editors Demographic Transition, Labour Markets and Regional Resilience Editors Cristina Martinez School of Social Sciences and Psychology Western Sydney University Penrith, New South Wales Australia Tamara Weyman Western Sydney University Penrith, New South Wales Australia Jouke van Dijk Faculty of Spatial Sciences University of Groningen Groningen The Netherlands Waddenacademie Leeuwarden The Netherlands ISSN 1430-9602 ISSN 2197-9375 (electronic) Advances in Spatial Science ISBN 978-3-319-63196-7 ISBN 978-3-319-63197-4 (eBook) DOI 10.1007/978-3-319-63197-4 Library of Congress Control Number: 2017955843 © Springer International Publishing AG 2017 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Foreword Demographic transitions, the subject of this book, have been reshaping our economies, societies, politics and international relations for over two centuries The planet saw its population explode from billion in the year 1800 to over billion today, as mortality rates fell sharply thanks to improved hygiene, nutrition and economic development In more recent times, declining fertility rates have been dragging down world population growth and, together with increasing life expectancy, resulting in an ageing of our populations Selective migration patterns also occur within and between countries As a result, some areas show a rapidly increasing population whereas other areas suffer from population decline The world’s different continents are at different stages of these demographic transitions Europe is the world’s “oldest continent”, despite the recent influx of many youthful refugees, followed by North America and Australia From the case studies in Poland, the Netherlands and Sweden, it becomes clear that within Europe there are also substantial differences Ageing in Sweden and the Netherlands is comparable with the United States and much less severe than in the South-European countries such as Spain and Italy which are comparable in ageing with Japan Asia, the region that has experienced the world’s fastest economic growth this past half century, is also experiencing the world’s fastest rate of population ageing Asia is unique in that it also has the world’s greatest “demographic diversity” A long period of fertility rates below the “replacement rate” of 2.1 children per woman has now led to a slowly declining population in Japan, with adverse effects on economic growth and public budgets Korea and Taiwan are both following the same pattern, as is China due in part to its one-child policy (now reformed into a two-child policy) China’s demographic transition has been so abrupt that, in contrast to its North East Asian neighbours, it will become old before it becomes a high-income country At the other end of the Asian spectrum are countries like India, Indonesia and the Philippines, which are still at an earlier stage in their demographic transitions They have large youth bulges now entering the labour market, but these energetic young people are in desperate need of skills and training and jobs Asia’s demographic v vi Foreword diversity opens opportunities for mutually beneficial migration from labour-rich to labour-poor countries But most regrettably, apart from the low-fertility cases of Hong Kong and Singapore, too few countries are opening their doors to significant immigration Europe is now confronted with increasing migration from conflict areas in Africa and the Middle East Migration of people is also related to migration of human capital Some cities in the United States showing population decline are also confronted with a decline in stocks of human capital, while other cities which have depopulated are still accumulating higher educated individuals All these demographic transitions are impacting different national regions and cities to different extents and in different ways This highlights the need for governments at all levels, from the local to the regional and national, to respond to the manifold challenges, with a response which is not one size fits all, but is modulated according to the specificity of the region or city International cooperation is also being tested by migration pressures and crossborder capital flows Businesses must adapt and respond to changing labour supplies Trade unions and civil society organisations are having to represent the interests of a dynamically changing demography Each and every one of us is now living in rapidly changing demography which is challenging social cohesion The book is a unique source of information, analysis and ideas on demographic change, labour markets and regional resilience Country case studies, often with a regional focus, cover European countries like Poland, the Netherlands and Sweden, the United States and Asia’s leading economies of China, Japan and Korea Issues dealt with include urban and regional aspects, retirement security, labour markets and productivity The authors of each chapter are leading experts in their fields I can only make the most unreserved recommendation to members of all stakeholder groups to take the time to benefit from their knowledge and experience by reading this excellent volume Asian Century Institute Sydney, Australia John West Introduction Demographic change is a universal feature of our times, affecting all countries at all stages of development The world’s population is increasing, but population growth rates are in decline This slowdown is essentially due to falling fertility rates Meanwhile, in OECD countries, people are living longer This means that the distribution of age in the population is shifting, with proportionately fewer young people than older people Ageing is not a problem unto itself: Individuals want to grow old Overall, people are significantly healthier than in the past and enjoy longer lifespans However, the aggregate effect of population ageing and the resulting changes to the population structure of many countries pose huge challenges for their economies and their ageing populations, prompting multiple questions (Newbold 2015).1 Will there be the capacity to support a growing number of retirees and fund pensions and long-term health care with a smaller and declining labour force? What are the economic benefits and costs of ageing at the local, regional and national levels? At the local level, the main reason for population ageing is migration, with the outmigration of young workers to highly urbanised areas, leaving behind older populations in less urbanised and rural areas The net result is economic and demographic decline compounded by an older and smaller population This trend is already creating policy and fiscal challenges in some countries The larger impact of demographic transition can be observed at the local level where institutions, organisations and the community feel the dynamics of shrinkage and ageing of their labour markets Despite the severity of the global trends and the difficulties in reversing these trends in the short term, national and local institutions and stakeholders can and should enhance their pathways for sustainable development by smart management of their demographic transition This book reviews these Newbold KB (2015) Population aging: what role for regional science? Ann Reg Sci 55:357–372 doi:10.1007/s00168-015-0676-y vii viii Introduction trends in a selection of countries and suggests strategic policies that need to be implemented to make labour markets more resilient and more inclusive Demographic change is recognised worldwide as a fundamental policy challenge facing not only national governments across the world, but due to its greater complexity at lower spatial scales, is even more challenging for regional and local governments Such demographic changes include falling fertility rates, increased life expectancy, migration, population ageing, youth unemployment and localised population shrinkage These processes impact the size and composition of the labour force, the stock of human capital and labour productivity The impact of demographic change is selective by individuals according to e.g age and education and differs between urban and rural areas As a result of these demographic changes, strategic solutions must take into account the interplay of different elements, integrating the characteristics of the community, human capital, industrial composition and social distribution (Martinez-Fernandez et al 2012).2 As illustrated in Fig 1, sustainable and resilient communities rely on the complex interaction of four key areas: population and health, such as ageing, fertility and longevity; new sources of growth, such as the silver and white economies, entrepreneurship and innovation; skills ecosystems, such as skills supply development, utilisation and demand; and labour markets, such as employment, unemployment, ageing workforce and skills mismatch The performance characterisations of these factors depend on elements in other key areas These are significant transitional issues facing governments at all levels, but especially at the local level, in managing industrial development, job creation, welfare levels and sustainable development This provides a framework for the analysis in later chapters of specific regional case studies and chapters that analyse more in-depth specific issues like securing income security for older (retired) people, spatial changes in the human capital stock and changes in labour productivity related to population change The book is divided into eleven chapters It starts with two general chapters In Chap 1, the demographic change phenomenon is introduced from an international perspective and where the challenges and impacts of demographic transition are discussed and the need for suitable indicators to develop effective and efficient policies Chapter examines demographic trends across OECD cities and regions and discusses challenges facing different types of places and addresses the policy dilemmas and conflicts at different spatial scales After these general chapters, a series of five chapters presents a cross-country analysis of the impacts of demographic transitions in Europe and Asia, focusing on the challenges facing regional and local communities and what governments and key stakeholders can to prepare and anticipate the changes or turn them into opportunities In Europe, the Netherlands, Sweden and Poland are analysed A comparison of these three countries is interesting, because the institutional setting, the spatial scale, population size and population density are very different The Netherlands and Martinez-Fernandez C, Kubo N, Noya A, Weyman T (2012) Demographic change and local development: shrinkage, regeneration and social dynamics OECD Publishing, Paris doi:10.1787/ 9789264180468-en Introduction ix Fig Interplay of factors impacting demographic change Source: Based on MartinezFernandez, C., Kubo, N., Noya, A., and Weyman, T., (2012), Demographic Change and Local Development: Shrinkage, Regeneration and Social Dynamics, OECD Publishing, Paris Sweden are both small in terms of population, but spatial scale and population density are very different Poland is much larger in terms of total population, and it has a very different history of institutional and economic development Across Asia, results are presented for China and Japan which are also very different in spatial scale and institutional and economic development The following chapters give an in-depth analysis of specific elements from Fig of demographic transition: South Korea’s labour market trends among older workers as another pillar of income security; the United States’ declining population areas are associated with a decline in educated individuals; and an econometric analysis of Dutch data on the effects of ageing on labour productivity and the impacts on welfare In Chap 11, potential instruments for decision-making and strategic prioritisation of actions are identified and related to strategic, coordinated policy responses involving local solutions, based on policy themes that address sustainability and inclusiveness of the labour market Next, we will describe the contents of the chapters in more detail Chapter by Martinez and Weyman gives an overview of the major worldwide trends in demographic changes Falling fertility rates, increased life expectancy, migration, population ageing and localised population shrinkage are significant policy challenges that national, regional and local governments are facing This chapter outlines the objectives of the study, illustrates the demographic transition across the OECD and globally and highlights the complexity and interplay of the factors impacting demographic change In order to get an insight into these ... change, labour markets and regional resilience Country case studies, often with a regional focus, cover European countries like Poland, the Netherlands and Sweden, the United States and Asia’s leading... Tamara Weyman • Jouke van Dijk Editors Demographic Transition, Labour Markets and Regional Resilience Editors Cristina Martinez School of Social Sciences and Psychology Western Sydney University... new and unique micro-level data set for the Netherlands In the concluding Chap 11, Re-positioning Labour Markets with Demographic Change and Ageing, Martinez, Weyman and Van Dijk conclude that demographic