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Trend: Demographics and inequality

A trend indicates a direction of change in values and needs which is driven by forces and manifests itself already in various ways within certain groups in society.

Demographic trends and societal disparities are contributing to a new economic reality, characterized by poverty and inequality. Populations ageing, changing family structures, increasing migration and increasing ethnic diversity are all contributing to differences between ‘the haves and the have-nots’ and to social and economic inequalities. Societal inequalities can lead to disparities within populations, either affecting health risks, disposable incomes, or where one lives. These situations can lead to different birth and mortality rates or quality of life within the population, which in turn can contribute to changes in its demography.

As described in the Widening Inequality megatrend, wealth inequality is increasing, but economic support for individuals can be provided by Universal Basic Income scheme for example to counter this.

This Trend is part of the  Megatrend  Increasing demographic imbalances

Manifestations

Developments happening in certain groups in society that indicate examples of change related to the trend.

Social economic inequalities

Linking demography and economic inequalities is sometimes controversial, due to the complexity and number of things to consider, definitions and interdependencies. Historically data has shown that high-income countries with low population growth can have social and economic challenges. At the same time, low-income countries with high population growth can also exhibit hindered socio-economic development. In this sense, the demographic composition of a country can affect inequality between and within countries. Similarly inequality can also affect a range of demographic factors. Growing inequalities can reduce an individual’s possibility to decide where to live, or migrate both internationally and inter-regionally. This may lead to situations where only those who cannot afford to migrate are left behind in certain countries, or regions. Higher-income populations can relocate and take resources with them.

Within countries, inequality also has a proven impact on demographic outcomes. Income levels correlate with life expectancy, mortality rates, fertility rates and quality of life. For example, expected healthy life years increase with higher average income. These factors are getting more attention, as the inequality between countries is narrowing while within-country inequalities are rising slightly.

There are multiple policy measures to address such inequalities related to demography, such as investing more in preventative healthcare, or implementing a ‘citizen-salary’. A citizen salary, or ‘universal basic income’ has been tested on a small scale for a limited time, where for example, an income was ensured that cut down on the administrative burden of a received financial contribution. Universal Basic Income can however also lead to individuals being discouraged from looking for employment, which can lead to inequalities among employed and non-employed households.

Signals of change: BMC Pregnancy Childbirth, SAGE, E21, Development Initiatives, UNESCO, PAA

Disparities between urban and rural areas

People having different possibilities of choosing where to live can lead to increasing inequalities between rural and urban areas, or more specifically, growing inequalities between areas with low and high population growth respectively. This can create a demographic change which in turn can increase the pressure on the urban and rural service provision. For example, limited healthcare provision in rural areas expounds inequalities and is detrimental to life expectancy and quality of life. Increasing automatisation may also replace workforce and risks increasing inequalities in society.

It is estimated that by 2050, 68% of the world population will live in urban areas. Most cities’ prosperity has been measured by productivity and income of their citizens. Over the the past 50 years large cohorts of working age populations kept the cities running. But declining population growth and reduced rural to urban migration will affect the urban population growth.

Signals of change: McKinsey, Bain, Springer

Intergenerational inequality

Intergenerational inequality refers to differences between generations, such as in resources (fiscal and natural), outcomes or opportunities. Intergenerational fairness means that all generations should be given equal weight and treated equally. The systems of transfer between generations are challenged by fiscal and healthcare pressure from populations ageing in societies. As people live longer, there is risk that dominant population is not respecting the rights and interests of future generations. In an aging population with increased retirement age can make limits on job options for younger people. This can affect that future parents are older when giving birth in order to have a stable job situation.

Signals of change: SN Soc Sci, Institute and Faculty of Actuaries

Interesting questions

What might this trend imply, what should we be aware of, what could we study in more depth? Some ideas:

• What if housing supply does not accommodate the rising population?
• What if governments can no longer afford social security?
• What if we only have kids after the age of 40?
• The projection that global population will peak and then start declining is based on the assumption that poorer countries will develop. What if that is wrong and global population continues growing?