The Demography of Australian Ageing over the Next Decade: Certainties, Surprises and Implications for Government

by Graeme 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, Canberra 22 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

Total 65-74 75+ 65+ 15-64

Australia: Population Change by Age, 2006-11

Source: ABS 2011 Census 2006 19,855,291 1,373,435 1,270,935 2,644,370 13,273,710 2011 21,507,716 1,627,407 1,384,880 3,012,287 14,351,405 % Change 8.3

18.5

9.0

13.9

8.1

Total 65-74 75+ 65+ 15-64

Australia: Population Change by Age, 2011 and Projected 2031

Source: ABS Estimated Resident Population and 2031 Projections Series B 2011 22,340,024 1,681,931 1,405,980 3,087,911 15,018,500 2031 30,501,192 2,878,511 2,826,768 5,705,279 19,255,273 % Change 36.5

71.1

101.1

84.8

28.2

Australia: Comparison of Projected Growth of Population, 2031

Source: ABS 2013 Projections Total Population 65+ Percent 65+ Series A 2011 (m) 2031 (m) Series B 2031 (m) Series C 2031 (m) Difference Series A and C in 2031 (m) 22.34

3.09

13.8

31.87

5.83

18.3

30.5

5.71

18.7

29.3

5.69

19.4

2.57

0.14

1.1

Australia: Age Sex Distribution, 2011 and Projected 2031

Source: ABS 2011 Census; ABS Projections, Series B, 2013 2011 (shaded) and Projected 2031 95+ 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 1500000 Males 1000000 500000 0 Number 500000 Females 1000000 1500000

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, 1901-2012

Source: CBCS,

Demography

and ABS,

Births Australia

, various issues

Australia: Age Structure 1961 to 2011 Showing Baby Boomer Cohort

Source: ABS Censuses

1961

85+ 80-84 75-79 70-74 Age 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 800 Males 600 400 200 0 Number (000s) 200 400 Females 600 800

1986

85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 Age 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 800 Males 600 400 200 0 Number (000s) 200 400 Females 600 800

2011

Age 85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 800 Males 600 400 200 0 Number (000s) 200 400 Females 600 800

Australia: Expectation of Life at Birth, 1870-2011

Source: 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 1901-1910 1970-1972 2011 Males 21.2 23.2 32.0 Females 23.7 28.3 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 45-54 55-64 65-74 75+ All People 1981 16.7

27.1

34.6

53.1

13.2

2003 21.6

33.8

44.4

68.0

20.0

2012 18.1

29.4

42.0

67.6

18.5

Australia: Disaggregation of Life Expectancy Into ‘Disability Free’ and ‘With Disability’ Years, 1998 and 2012 (Years)

Source: AIHW, 2014, 3 Life Expectancy at Birth Disability Free Expectancy With Disability Expectancy 1998 75.9

Male 2012 79.9

58.0

17.9

62.4

17.5

Female 1998 2012 81.5

62.1

19.4

84.3

64.5

19.8

• Unrecognised burden of mental illness especially dementia (Global Burden of Disease Study) • Access Economics – Number with dementia 2011: 2030: 266,574 553,285 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 65+ 60-64 55-59 50-54 45-49 40-44 Age 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 15000 Males 10000 5000 0 Number 5000 10000 Females 15000

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

Source: DIBP data 300000 250000 200000 150000 100000 50000 0 UK and Ireland Other Europe *July 1945 to June 1947 Note: Middle East includes North Africa from 1996-97.

Africa

Year

Americas NZ and Pacific Middle East Asia

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

Source: ABS 2011 Census Australia-born (shaded) and Overseas-born 85+ 80-84 75-79 70-74 65-69 60-64 55-59 Age 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 6 Males 5 4 3 2 1 0 Percent 1 2 3 4 Females 5 6

Australia : Persons Aged 65+ years by Birthplace, 2011

Source: ABS 2011 Census Birthplace Total 65+ Total Population Australia-born MES-born CALD-born 21507719 15017846 1911697 4578176 % of Total CALD % of TotalOverseas-born 3012281 1787004 396868 828409 %65+ Average Annual Growth Rate 2006-11 14.0

11.9

20.8

18.1

27.5

40.7

3.1

2.7

3.7

3.6

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

Source: ABS, 2011 Census Indian Ancestry (shaded) and India-born Age 85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 40000 Males 30000 20000 10000 0 Number 10000 20000 Females 30000 40000

Australia: Age Pension Paid Overseas by

Source:

Country of Residence, June 2011

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

ABS

National Health Surveys

1989-90 and 2008-09; ABS Census 1981 and 2006 Source: Social Indicators Social Supports Entering later life without a spouse Childless Living alone Education Completed secondary school Bachelor degree or higher Religion Identify as Christian Housing Owner/purchaser Rental No Private Health Cover Overseas-Born NES Overseas-Born Baby Boomers (1946-65) % 34 14 11 43 19 66 80.7 19.3 37 31 20 Pre-war Generation (1927-36) % 19 9 6 6 3 80 84.1 15.9 42 21 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 Months

Source: ABS, 2012

Health Status at Mid-life: Baby Boomers Compared with Pre-war Generation

Source: ABS; National Health Surveys, 1989-90, 2007-08 Health Indicators Obesity Diabetes Asthma Hearing loss Arthritis Migraine Back problems Multiple conditions (≥3) High cholesterol Alcohol risk Currently smoking Emphysema/bronchitis No private health cover Baby Boomers at Mid-life % 26 9 10 17 33 6 9 4 14 15 18 3 37 Pre-war Generation at Mid-life % 12 3 5 8 26 4 6 0.5

8 11 24 5 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

Australia: Tenure by Age, 2011

Source: ABS 2011 Census Tenure Owned outright Owned with a mortgage Being purchased under a rent/buy scheme Rented Being occupied rent-free Being occupied under a life tenure scheme Other tenure type Total N 45-54 27.5

49.4

0.2

21.5

0.8

0.1

0.4

100.0

2976481 55-64 Percent 65-74 51.3

30.9

0.1

16.2

0.8

0.2

0.4

100.0

2532605 72.1

12.2

0.1

13.4

0.8

0.8

0.5

100.0

1644047 75+ 76.2

6.6

0.1

12.6

1.0

2.5

1.1

100.0

1391101

Comparison of Owners and Renters: Demography

Source: SAMSS, 2007-13 Percent Employed Percent with Degree Currently Married Percent in 2 Lowest SEIFA Quintiles Owners (%) 75.7 24.1 83.9 34.4 Renters (%) 56.9 15.0 46.1 49.4

Comparison of Owners and Renters: Chronic Conditions

Source: SAMSS, 2007-13 Diabetes Asthma COPD Arthritis Osteoporosis Mental Health At Least One Chronic Condition Owners (%) Renters (%) 7.8

13.0

10 4.4

16.8

8.4

25.9

3.8

15.4

47.4

31.6

5.6

29.6

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 2006-11

ABS 2006 and 2011 Censuses Source: 180000 160000 140000 120000 100000

Number Moved

80000 60000 40000 20000 0 Moved 2006-2011 Moved 2001-06

Age in years

Simplified Model of Response of Older People Entering Retirement

A Typology of Migration of Older Australians

Source: Hugo, 1988, 17 Age ‘Young Old’ 60s and early 70s Type Mainly Voluntary Selectivity Reason for Moving 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, 1970-2014

Source: ABS Labour Force Surveys Age Group 55-59 60-64 65+ May 1970 Males Females 91.5

79.2

23.2

28.7

14.9

3.6

Percent Participation June 1999 February 2010 Males Females Males Females 72.9

46.9

9.7

44.1

17.6

3.2

79.4

61.7

14.8

64.4

41.8

6.4

January 2014 Males Females 79.0

61.8

16.0

63.5

42.5

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 Males Females 30,000 20,000 10,000 0 -10,000 -20,000 -30,000 -40,000 Age

Growth of Population 2006-11

Total 65+ Capital Cities Rest of State

% per annum

1.8

2.45

1.26

2.9

*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

200 150 100 50 0

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

300

All sea change LGAs

250 0-4 5-14 15-24 Within two years from now 25-44 45-64 65-74 75+

Current (2012) age

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, 1971-2011

Source: ABS 1971 to 2011 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Inner Coastal Middle Outer 1971 1981 1991 1996 Year 2001 2006 2011

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

Source:

2026

ABS 2011 Census and ABS for the purpose of the Commonwealth, through the Dept. of Health and Ageing, and other governments, 2007 Suburban Sector Coastal Inner Middle Outer Total 2011 92.1 140.4 87.1 97.6 98.7 2021 72.3 109.2 68.7 64.0 71.8 2026 63.8 94.6 61.0 54.7 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

Source:

Demand

Productivity Commission 2011 2010 2020 2030 2040 2050 Residential Care Direct care workers (FTE workers) Direct care workers (total workers) Total residential care workforce (direct and support workers) Community Care Direct care workers (FTE workers) Direct care workers (total workers) Total community care workforce (direct and support workers) Total Workforce Requirement a 85,000 144,000 189,000 11,000 19,000 22,000 107,000 182,000 239,000 41,000 66,000 78,000 157,000 266,000 349,000 57,000 92,000 109,000 254,000 431,000 565,000 82,000 132,000 156,000 353,000 598,000 785,000 102,000 164,000 194,000 212,000 317,000 459,000 721,000 979,000 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