Aging in France: Special challenge of a population of working age that does not grow anymore

In February 2018, INSEE (the French statistical agency) published a remarkable analysis of life expectancy in France in relation to a number of characteristics of the population, such as standard of living, gender, education level and region. Life expectancy in France is one of the highest in the world, so it was enough for me to explore the aging situation in this country, using the same analytical grid tested with previous national analyzes.

In France, like in Canada, Sweden and the United States, the 20-year period ending in 2030 – the present period – is the one experiencing the fastest aging process (giving credit to United Nations projections [1]). Between 2010 and 2030, the aging index (proportion of people aged 65 and over in the total population) would increase from 16.8% to 23.9%, an increase of 7.1 percentage points, fewer than Japan‘s (an increase of 11.7 points between 1995 and 2015) and Canada’s (9.1 percentage points), almost identical to that of the United States (7.4 points) and significantly higher than Sweden’s (3.9 points). The red line in the graph below shows it. This occurs because of the passing through the pivotal age of 65 years by the cohorts of young people under 15 years of age that saw their number increase steadily until 1975, a phenomenon naturally amplified by the equally significant increase in life expectancy.

Let’s look more closely at how the main parameters underlying aging, the fertility rate and life expectancy, have evolved.

Although decreasing from a high of 2.9 in 1964, the fertility rate remained above 2.0 until 1974, ensuring continued growth of the population of young people under 15 years of age to this date [2]. Subsequently, the fertility rate fell and then remained below the 2.0 value, reaching a low of 1.7, then stable from 1992 to 1997. It recovered slowly after 1997 to stabilize at 2.0 from 2006. These movements in the fertility rate explain that the young population decreased between 1975 and 2000, before gradually increasing thereafter.

What about the impact of the second driving force of aging, life expectancy, in France?

From 1960 to 2015, in 55 years, life expectancy at birth has risen from 70.3 years in France (2.8 years less than in Sweden, almost identical to Canada and the United States). and 2.5 years older than in Japan) to 82.4 years (1.5 years less than in Japan, less than one year higher than in Sweden and Canada and 3.6 years more than in the United States) [3]. The increase in life expectancy at an average rate over this period of 80 days per year was therefore, in France, at the same pace as the average for the OECD countries (79 days), faster than in Canada (73 days), Sweden (61 days) and the United States (59 days), but slower than in Japan (107 days). As a result of the increase in life expectancy and the above-described evolution of the young population, in 2014 the proportion of people aged 65 and over has exceeded that of those aged 14 or under in the total population. This phenomenon occurred in 1998 in Japan, in 2006 in Sweden, in 2015 in Canada and would only occur around 2025 in the United States according to the projection.

All over the world, life expectancy is longer for women than for men in France. The gap between the two evolved in three phases between 1960 and 2015: from 1960 to 1987, the gap increased steadily from 6.6 years to 8.4 years, meaning larger gains in longevity for women by close to two years; from 1987 to 1994, the gap stabilized at this level of 8.4 years; since 1994, there has been a significant narrowing of the gap to reach 6.3 years in 2015. We can ask ourselves whether these movements occurred because of possible changes in mortality levels for both sexes before or after 65 years. Examination of life expectancy at age 65 provides valuable information [4]. Over the 55-year period, while life expectancy at age 65 is already significantly longer for women in 1960 (15.6 additional years vs. 12.5 for men), it has also increased more for women than for men, by 7.9 years compared to 6.9 years. This indicates that mortality gains were higher for men than for women before the age of 65, as life expectancy at birth increased significantly for both men and women. The overall gains in life expectancy at birth have been about identical for both genders. While for women they were obtained more by the increased longevity beyond 65 years, for men these overall gains were relatively more a result of gains before 65 years.

We need to say a word about the impact of the flow of international migrants. We know that if the inflow is substantial, it delays the progression of aging, since the immigrant population is mostly of lower average age than the host country’s population. For France, OECD data [5] cover permanent international migrants over the period 2001-2014 – this means that the most recent migration flows are not included. On average over this period, the annual flow of permanent immigration is moderate (0.33% of the total population), less than half as in Canada and Sweden, and equivalent to that observed in the United States. However, over the entire period, it is growing steadily, from 0.23% in 2001 to 0.39% in 2014. The moderating effect on aging is therefore slightly increasing.

Finally, and as we did for the other countries studied, let’s take a look at some of the implications of aging on the French labour market:

• As a result of the two elements, changes in fertility rate and life expectancy, the population of working age (15-64 years) as a proportion of the total population reached its highest point in 1988 with a ratio of 66%. Compared to other countries examined, this ratio is low, just slightly higher than that of Sweden, and was reached much earlier than in all other countries, four years earlier than in Japan, and 19 or 20 years earlier than in Sweden, the United States and Canada. It has declined since that date. This is an important indicator because it gives a measure of the potential burden of young and old populations on this “more productive” population: the higher this ratio, the better the conditions of support for populations requiring services without being able to to generate the resources to obtain them. Such a decreasing ratio is a challenge for public policy.
• Unlike what is happening in Canada, where the working-age population continues to grow despite the decline in the percentage of the total population, in France, the working-age population remains just stable – between 40 and 41 million people – until the end of the projection horizon.
• However, until now, the labour force has continued to grow steadily thanks in large part to the rising participation rate [6]. It is at its highest level with the most recent 2016 figure (71.7%). Compared with the participation rates in the other countries studied in other articles of this blog, this rate is significantly lower, for the same year, than in the United States (72.9%), Canada (76.1%), Japan (76.9%) and Sweden (82.0%). In these other countries, except Japan, these activity rates in 2016 remained below their respective highest rates achieved, providing a margin of national growth. For France, a margin for of the participation rate exists, but it is due to the fact that the French participation rate is significantly lower than in these other four countries, even if it is at a highest historic level for France.

References

[1] United Nations, Population Division, Department of Economic and Social Affairs, World Population Prospects: The 2017 Revision.

[2] OECD (2018), Fertility rates (indicator). doi: 10.1787/8272fb01-en (Accessed on 25 January 2018).

[3] OECD (2018), Life expectancy at birth (indicator). doi: 10.1787/27e0fc9d-en (Accessed on 25 January 2018).

[4] OECD (2018), Life expectancy at 65 (indicator). doi: 10.1787/0e9a3f00-en (Accessed on 25 January 2018).

[5] OECD (2018), Permanent immigrant inflows (indicator). doi: 10.1787/304546b6-en (Accessed on 25 January 2018).

[6] OECD (2018), Labour force participation rate (indicator). doi: 10.1787/8a801325-en (Accessed on 25 January 2018).

 

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Non solum data – Data sine monito oculo nihil sunt.

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