Tag: #demographics

ICAEW chart of the week: China population

Our chart this week follows the news that China’s population has peaked at just over 1.4bn, illustrating the dramatic change that has taken place over the last 40 years.

Step chart showing the change between China's population in 1981 and 2021. 997m in 1981, comprising 765m age 0-39, 228m age 40-79 and 4m age 80+. +776m births - 332m deaths - 15m net migration = 1,426m in 2021 comprising 735m age 0-39, 658m age 40-79 and 33m age 80+.

The news that China’s population has peaked and is starting to fall prompted us to take a look at how the country with the largest population in the world has changed over the last 40 years.

In 1981, two years after the introduction of the one-child policy, China was a young country, with a population of 997m and a median age of 21. Today it is a mature country, with a population of 1,426m and a median age of 38, approaching that of many western countries.

Our chart shows how that population has changed according to the United Nations Population Division. In July 1981, China was estimated to amount to 997m, comprising 765m under the age 40, 228m between the ages of 40 and 79, and 4m aged 80 or over. Since then, there have been 776m births, 332m deaths and net outward migration of 15m to reach a total of 1,426m in July 2021. This comprised 735m people aged between 0 and 39, 658m between 40 and 79 and 33m aged 80 or over.

The dramatic change in the age profile reflects the huge success that China has had in tackling poverty and disease, enabling many more children to survive into adulthood compared with previous generations, and to then live longer lives. Infant mortality fell from 45 per thousand births in 1981 to less than six per thousand in 2021 and life expectancy at birth increased from 65 to 78.

The rapid growth in the population over the last 40 years has slowed in recent years as the number of births has fallen and (as the population has aged) deaths have increased. There were 10.9m births in 2021 (down from 12.2m in 2020, much less than the 22.8m births in 1981) and 10.6m deaths (up from 10.3m in 2020 and much higher than the 7.4m deaths recorded in 1981). With net outward migration of 0.2m, the net increase in the population in 2021 was less than 0.1m, down from the net increase of 1.9m in 2021 and much lower than the 17.1m increase experienced in 1982 and the peak increase of 19.9m in 1990.

According to the UN’s numbers, China’s population was expected to peak this year (in 2023), with a central projection that would see the population falling by 233m the next 40 years to 1,193m in 2061, and then to 767m in 2100.

However, China’s population is now believed to have peaked already, with the National Bureau of Statistics of China announcing on 17 January 2023 that China’s population excluding foreign citizens and excluding Hong Kong, Macau and Taiwan fell by 0.85m from 1,412.6m in December 2021 to 1,411.75m at the end of 2022.

India, with an estimated population of 1,407m in July 2021 according to the UN, was expected to overtake China as the world’s largest population during 2023, but there is some speculation following China’s announcement that this has already occurred. India’s population is currently projected to continue to grow over the next 40 years and peak at 1,697m in 2064.

With the population peaking and many more people living longer lives, the fiscal challenge facing China becomes similar to those facing western nations: how to support a rapidly increasing number of pensioners at the same time as the working age population is declining.

This chart was originally published by ICAEW.

ICAEW chart of the week: Migration

The latest migration statistics for the year to June 2022 come with a health warning from the ONS that its ‘experimental and provisional’ numbers for people movements during a pandemic may not be representative of long-term trends.

Column chart showing migration flows for the year to June 2022: Non-EU inflows: Work +151,000, Study +277,000, Settlement schemes +138,000, Other reasons +138,000 Non-EU outflows: -195,000, Net = +509,000 EU inflows: Work +88,000, Study +71,000, Other reasons +65,000. EU outflows: -275,000, Net = -51,000 UK inflows: Work +47,000, Study +8,000, Other reasons +81,000 UK outflows: -90,000, Net = +46,000.

On 24 November 2022 the Office for National Statistics (ONS) published its latest ‘experimental’ statistics on net migration, provisionally reporting that net long-term migration to the UK amounted to 504,000 in the year to June 2022. This compares with estimates for net inward migration of 173,000 in the year to June 2021 and 88,000 in the year to June 2020. 

This is equivalent to approximately 0.7% of the UK’s total population and is more than double the net inward migration assumption of 237,000 for the same period used by the ONS in its most recent principal long-term projection for the UK population.

The ONS cautions that the middle of a pandemic may not be representative of long-term trends, given possible pent up demand following restrictions in movements in the previous two years.

The ONS also points out the large jump in the number of non-EU students coming to study in the UK, which boosts immigration numbers in the current year. This should in theory reverse in three to four years’ time when many (but not all) of these students return to their home countries or move elsewhere.

Non-EU

As the chart illustrates, immigration from countries outside the EU in the year to June 2022 comprised 151,000 people coming to work in the UK, 277,000 coming to study, 138,000 under settlement schemes and a further 138,000 coming for other reasons. Around 195,000 people from outside the EU were estimated to have left during the year, giving a net inward migration number for non-EU citizens of 509,000. This compares with 157,000 during the year ended 30 June 2021 and 51,000 in the year before that.

The numbers from outside the EU coming to work has increased from 92,000 in the year to June 2021 and 81,000 in the year to June 2020, offsetting some of the reduction in those coming from the EU to work. Those coming to study have increased by an even greater proportion (from 143,000 and 136,000 in the preceding two years respectively), although this may represent pent-up demand from the pandemic when it was much more difficult for students wishing to start courses in the UK. However, the ONS does comment that the new graduate visa that permits students to stay and work in the UK for up to three years after completing their studies may have encouraged more students to come. 

The 138,000 arriving under settlement schemes in the year to June 2022 included an estimated 89,000 Ukrainians who were resettled in the UK under the Ukrainian scheme, approximately 21,000 Afghans under the Afghan resettlement scheme and an estimated 28,000 of the 76,000 Hong Kong residents granted British national overseas (BNO) visas during the year. 

The ONS does not give a full breakdown of the other reasons why people are coming to the UK, which principally relate to those joining family, those planning to stay temporarily but for longer than a year, refugees granted asylum during the year and any other reason not classified by the ONS. The numbers exclude 35,000 people that arrived by small boats during the period, although those who are granted asylum will show up in the statistics in subsequent periods.

EU

Inward migration from the EU has gone into reverse since the ending of free movement on 31 December 2020, with net outward migration of 51,000 for the year to June 2022 compared with net inward migration of 12,000 and 26,000 in the two preceding years. 

As the chart illustrates, the 88,000 people coming from the EU to work, 71,000 to study and 65,000 coming for other reasons – a total of 224,000 people – were more than offset by the 275,000 who left the UK. Those coming to the UK include Irish citizens who do not need visas to live and work in the UK, in addition those coming from other EU countries who now need to apply for visas before they can come to live and work in the UK. 

UK

There was a net inflow of 46,000 UK citizens, as an estimated 136,000 who returned home exceeded the estimate of 90,000 who emigrated from the UK. Of those coming back to the UK, 47,000 came to work, 8,000 to join family and 81,000 for other reasons. This compares with net inflows of 4,000 and 11,000 in the two preceding years.

Health warnings

The ONS provides a range of health warnings for this data set, labelling the numbers as ‘experimental and provisional’, as well as relating to an unusual year for international migration. The numbers were affected by the coronavirus pandemic, the settlement schemes for Ukrainians, Afghans and Hong Kong residents, and by the ending in the preceding year of free movement for EU citizens wishing to come to the UK and for UK citizens to live and work in the EU.

From an economic perspective, Chancellor Jeremy Hunt will no doubt be pleased at the additional workers that have arrived in the UK at a time of labour shortages, as well as the success of the university sector in attracting international students, some of whom are likely to stay at the end of their courses to work. Many of those arriving to join family or for other reasons will also join the workforce, further helping to grow economic activity.

With a national workforce that would shrink otherwise and many businesses calling for more freedom to recruit from overseas, the Chancellor may well be hoping for higher levels of migration to continue – even if some of his ministerial colleagues are likely to be less than positive about this possibility.

This chart was originally published by ICAEW.

ICAEW chart of the week: School-age demographic change

This week’s chart illustrates how the number of 10 year-olds in the UK is expected to fall sharply over the rest of the decade, just as the number of 18 year-olds is expected to peak in 2030.

School-age children 10 year-olds 2022: 855,000 2023: 831,000 2024: 813,000  2025: 807,000 2026: 808,000 2027: 783,000 2028: 759,000 2029: 730,000 2030: 702,000 18 year-olds 2022: 741,000  2023: 752,000 2024: 781,000 2025: 797,000 2026: 824,000 2027: 817,000 2028: 826,000 2029: 841,000 2030: 855,000

The Office for National Statistics UK Population Estimate for July 2020 reports that there were 855,000 children in the cohort who will be 10 years old next year when most of them will be entering their final year of primary school. A falling birth rate since 2012 means that the numbers of 10-year-olds will fall by 18% over the following eight years to 702,000 in 2030, with a consequent drop in the number of primary school places that will be needed in the coming decade: 

  • 2022: 855,000 10 year-olds
  • 2023: 831,000
  • 2024: 813,000 
  • 2025: 807,000
  • 2026: 808,000
  • 2027: 783,000
  • 2028: 759,000
  • 2029: 730,000
  • 2030: 702,000

At the same time, the number of 18 year-olds will grow significantly reaching a peak in 2030 when that cohort of 855,000 will be 18, 15% more than the 741,000 of 18 year-olds in 2022. 

  • 2022: 741,000 18 year-olds 
  • 2023: 752,000
  • 2024: 781,000
  • 2025: 797,000
  • 2026: 824,000
  • 2027: 817,000
  • 2028: 826,000
  • 2029: 841,000
  • 2030: 855,000

The chart was prepared using the numbers of children estimated to be in the UK in 2020 adjusted for time growing up, but without adjustment for migration or the (fortunately) relatively small number of deaths that would be expected to occur over the course of the decade. 

Prior to Brexit and the pandemic, there was a net inflow of around 5,000 a year adding to each age group which, if repeated, would have the effect of reducing the rate of decline in 10 year-olds and increasing the size of the peak in 18 year-olds in 2030. However, with migration potentially having gone into reverse during the pandemic, it is unclear whether net immigration will be as high as it was before.

Either way, one of the first orders of business for new Education Secretary Nadhim Zahawi will be to review the plans to reduce primary school and expand secondary school provision over the next few years, as well as addressing the pressure there will be on universities, colleges and apprenticeships as the bulge of births in the mid-noughties flows through the education system over the coming decade.

This chart was originally published by ICAEW.