Saturday 10 December 2016

Astounding changes in Ireland's population need scrutiny

Published 12/07/2015 | 02:30

'Apart from a period in the 1980s, the upward trend in the population has been quite consistent, and even continued throughout the recent downturn'
'Apart from a period in the 1980s, the upward trend in the population has been quite consistent, and even continued throughout the recent downturn'

Brian Cowen was born in the very first days of the 1960s. As it happens, it was at that very moment when Ireland's globally unique, century-plus period of population decline was coming to an end.

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Since that time, Ireland has gone from one demographic extreme to another.

Although the former Taoiseach seems to believe that population growth only began when he was Finance Minister - according to what he had to say at the banking inquiry recently - the increase in the population of 50pc over the past half-century is one of the biggest increases of any peer country.

The 1960s turnaround came as the decades-long experiment with economic isolationism ended and openness was embraced. This caused an acceleration in growth and, in turn, somewhat better employment opportunities. The expansion of the welfare system also led to fewer people being pushed into emigration.

Apart from a period in the 1980s, the upward trend in the population has been quite consistent, and even continued throughout the recent downturn.

There are a few things explaining this. First, the 'natural increase' (that is, births minus deaths) has been at its highest level since independence. This is thanks both to a baby boom, which is apparent on the bottom of the population pyramid (as per the accompanying pyramid chart), and falling death rates, as people are living longer.

There is also the migration effect, though this has been smaller than most people believe and not big enough to offset the aforementioned 'natural' increase. While many more left after the economy tanked, as a proportion of the population, net emigration has been considerably lower during the current slump than it was in past slumps, including that of the 1980s.

As the first regional graphic illustrates, all provinces have contributed to the population growth of recent decades. Similarly, all of the Republic's 26 counties have had at least some upturn. And with the exception of lonely Leitrim, all counties now have a higher population than they did in 1961.

However, as the graph also indicates, there have been big differences in how populations have changed across the island by province.

Leinster-isaton is the really big change in that regard. The eastern province accounted for two-thirds of the increase in the Republic's population since the 1960s and today more than half of the State's inhabitants reside there.

While readers might intuitively think that this is mostly about more people packing into the capital, that would be wrong. County Dublin did increase its share of the total population in the 19th Century and up to the early 1980s. But then it halted, with just shy of 30pc of the country's people living in Dublin city and county.

Since then Dublin's share has actually fallen back a tad, as the commuter belt counties dough-nutting the capital have swelled - thanks to urbanisation and suburbanisation.

And that urbanisation process is one of the big demographic stories from the past half-century, as it has been across the rest of the planet. At present 63pc of Ireland's population is defined as living in an urban area - a big increase from 1960 when the majority still lived in the sticks.

Ireland's urbanisation rate is now akin to the developed world's rate. But it remains below the average in the EU (75pc) and the OECD (80pc). Irish rurality makes us closer to Eastern Europe and Mediterranean countries than our Northern European neighbours.

Admittedly, the definition of 'urban' differs by jurisdiction. The CSO definition is a town and environs of over 1,500 people, thus including places many would regard as rural. The penchant for one-off housing may skew figures as well.

All that said, the overall move towards urban areas is clear and is set to continue. The UN Population Division expects urbanisation to increase in Ireland along European lines, reaching 75pc by 2050. Rural Ireland is said to face stagnation.*

The fate of rural Ireland has long been a topic of fierce political debate and could well be a prominent election issue. One of the many independent groups has promised 'a better deal for rural Ireland' as a core principle - and Sinn Fein has recently proposed a regeneration plan that includes a 'rural resettlement' programme.

While these proposals may be well intentioned (and certainly are vote-winning in rural constituencies), efforts to halt a trend so universally strong may be as futile as King Canute attempting to halt the incoming tide.

All of this matters a lot for the economy. Demography may not be destiny, but the number of people, their age profile and where they chose to live have a bearing on a whole range of matters - from labour supply, to domestic demand, to the provision of essential services.

The change in the Irish labour market has been dramatic. Among the OECD countries, Ireland's employment growth was the lowest from the 1950s to the early 1990s, with hardly any change recorded in the numbers at work. But during the Celtic Tiger, Irish employment growth soared to top spot in the OECD league table - with the numbers at work almost doubling in the 15 years to 2008, to reach close to 2.2 million. The recession of course intervened - and, as of the first quarter of 2015, total employment stood at 1.9 million.

Ireland's relatively young population and workforce has often been seen as a 'demographic dividend'. The ratio between those in the labour force and dependants (largely children and retirees) is better than most European countries.

Much of the reason for that is because the baby boom that happened in most western countries after the Second World War did not occur in Ireland until the 1970s and early 1980s. Evidence of this can be seen in the bulge of 30- and 40-somethings in the population pyramid (as explained in a previous column, the dearth of 20-somethings now is mainly due to falling birth rates earlier, though emigration of Irish and non-Irish is also a factor).

So while the 'baby-boomers' elsewhere are now retiring, Ireland's boomers still have a few more decades of toil to put in.

As alluded to earlier, one should be wary of demographic determinism.

During the boom, demographics were used to justify the huge property-price increases and to predict future economic growth. Indeed it has constantly been cited by key players in explaining their pre-crash thinking at the banking inquiry.

Irish history is a painful reminder that there is more to prosperity than favourable demographics.

http://esa.un.org/unpd/wup/Country-Profiles/

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