Projecting fertility by regions considering tempo-adjusted TFR, The Austrian Approach

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1 WP October 2013 UNITED NATIONS STATISTICAL COMMISSION and ECONOMIC COMMISSION FOR EUROPE STATISTICAL OFFICE OF THE EUROPEAN UNION (EUROSTAT) Joint Eurostat/UNECE Work Session on Demographic Projections organised in cooperation with Istat (29-31 October 2013, Rome, Italy) Introduction Item 8 Assumptions on future fertility Projecting fertility by regions considering tempo-adjusted TFR, The Austrian Approach Alexander Hanika, Statistics Austria Stimulated by the paper Fertility Forecasting in the German speaking World: Recent Experience and Opportunities for Improvement, 1 Statistics Austria developed an approach considering tempo-effects in fertility projections to be implemented in the latest population projection for Austria on NUTS 2- level. 2 The above mentioned paper describes the inconsistencies of total fertility rate (TFR), tempoadjusted fertility (TFR*) and mean age of childbearing (MAC) for the time horizon of fertility projection arising from discontiguous projections for TFR and MAC based on the national population projections for Austria, Germany and Switzerland. The model of tempo-adjusted fertility TFR* by Bongaarts-Feeny 3 estimates the level of fertility in the absence of tempo-effects: <1> It expresses that the true quantum of fertility is disturbed by the change of mean age of childbearing (MAC). In times of rising MAC the quantum of fertility is underestimated by the conventional measure of period TFR and vice versa (see formula <1> above). Previous fertility projections for Austria considered a rising TFR hand in hand with rising MAC due to recent trends and assumptions. A more or less linear increase of both parameters was expected until a time horizon (e.q. 2030) and 1 Joshua R. Goldstein, Felix Rößger, Ina Jaschinski, Alexia Prskawetz: Fertility Forecasting in the German-speaking World: Recent Experience and Opportunities for Improvement. Comparative Population Studies Zeitschrift für Bevölkerungswissenschaft, Vol. 36, 2-3 (2011): Zukünftige Bevölkerungsentwicklung Österreichs und der Bundesländer 2012 bis 2060 (2075), Statistische Nachrichten 10/2012, Statistics Austria 3 Bongaarts, John; Feeney, Griffith 1998: On the quantum and tempo of fertility. In: Population and Development Review 24,2:

2 TFR, TFR* held constant for the rest of the projection period. Those sudden stops may cause inconsistencies due to the model of tempo-adjusted fertility as shown in the explanatory figure 1 below: The blue line indicates the path of a projected TFR which rises linear from 1.43 (2010) to 1.55 (2030). At the same time MAC increases from 30 to 32 years (yellow line). Using Bongaarts-Feeny s model to calculate the quantum of TFR* we receive an increase from 1.59 (2010) to 1.72 (2030; green line). In the case that the increase of TFR and MAC stops in the same year (2030) the quantum of TFR* would immediately fall down to the level of the TFR, because then the correction term (1-r t ) of TFR equals to 1 (dotted green line). Figure 1: The context of TFR, tempo-adjusted TFR* and MAC 1,75 32,5 1,70 32,0 1,65 31,5 1,60 1,55 31,0 30,5 MAC 1,50 1,45 1,40 TFR TFR* TFR*proj MAC 30,0 29,5 29,0 S: STATISTICS AUSTRIA, Population projection 2012 To overcome the explained inconsistencies, Statistics Austria reformulated in the year 2012 its fertility assumptions for the new population projection in a more consistent framework of TFR, TFR* and MAC. 2

3 The Austrian landscape of fertility At the time being the Total Fertility Rate (TFR) of Austria lies in average a bit over 1.4 children per women. (2010:1.44; 2011: 1.43; 2012: 1.44). Thereby period fertility has risen slightly since the beginning of the 21st century. After the baby boom with its maximum in the year 1963 (TFR: 2.82) period fertility fell at the beginning of the 1970s under replacement level and reached its preliminary minimum of 1.33 in the year Differentiation by the nine Austrian Bundesländer (NUTS 2-level) shows the exceptional position of Vienna, the capital city of Austria: During the 1960s and 1970s Vienna s TFR lay clearly under the Austrian average and also lower than in the other eight Bundesländer (figure 2). Even in the time of the baby boom Vienna s TFR did not reach replacement level. Until 1977 Vienna s TFR fell to Afterwards fertility in Vienna started to recover due to increasing immigration of nationalities with higher fertility levels. Since 1987 the City of Vienna is not any longer the rear light of fertility among the Austrian NUTS 2-regions. Currently the TFR of Vienna is just slightly lower than the Austrian average. Figure 2: TFR by Austrian NUTS 2-Regions ,5 3,0 2,5 Burgenland Carinthia Lower Austria Upper Austria Salzburg 2,0 1,5 Styria Tirol Vorarlberg Vienna Austria 1,0 S: STATISTICS AUSTRIA, Population projection 2012 Vorarlberg, the westernmost region of Austria showed in the past the highest fertility rates. In the last five years Vorarlberg shared the top position with Upper Austria on a level of more than 1.5 children per woman. Whereas fertility stagnated in Vorarlberg there was an increase in Upper Austria. The 3

4 lowest fertility rates at the level of 1.3 are now observed in Burgenland, the NUTS 2-region at the eastern border of Austria. The height of Austrian fertility lies about 30% under replacement level (Net Reproduction Rate NRR 0.69). The regional deviation ranges from 0.62 (Burgenland) to 0.74 (Vorarlberg and Upper Austria). The Mean Age of Childbearing (MAC) 4 rose since the second half of the 1970s from approximately 26 years to 30 years (figure 3). Also here regional differences are observed which similarly diminished in the past. Whereas in the 1970s the span amounted more than 2.5 years it reduced to less than one year at the time being. Figure 3: Mean age of childbearing by Austrian NUTS 2-Regions Burgenland Carinthia Lower Austria Upper Austria Salzburg Styria Tirol Vorarlberg Vienna Austria 24 S: STATISTICS AUSTRIA, Population projection 2012 Cohort fertility The current relatively low level of period fertility has to be seen in the context of postponement of births as reflected in the rising MAC. Higher education and economic activities of younger women, their planning of carriers as well as problems of combining family and job are suspected to cause the 4 Calculated as the mean age of the age-specific fertility rates 4

5 observed postponement of births. On the other hand, as known from different surveys 5 we know that the desired number of (additionally) births is higher than the realized number. On the other hand, historical comparisons show that at the end final cohort fertility is lower than the reported declarations by surveys. Table 1: Women aged 20 to 44 years by additional wish of children Age Women 20 to 44 years in AIs indicated in table 1 Austrian women aged 20 to 44 years want do have in average 1.83 children. More than a half of them (1.03 children) is already born. The highest wish of babies we can find among women aged 30 to 34 years with nearly 2 children. Women at the age of 40 to 44 years have given birth to 1.68 children in average. This survey result fits very well to the below mentioned competed cohort fertility rates. no child maximum 1 child Additional wish of maximum 2 children maximum 3 children more than 3 children Total 1.418,4 12,5 16,0 51,6 16,0 3,9 1,83 1, years 257,3 13,2 9,8 61,1 13,8 (x) 1,81 0, years 274,5 12,8 11,5 56,7 15,4 (3,5) 1,85 0, years 276,2 8,4 14,8 54,9 18,2 (3,6) 1,96 1, years 279,1 11,6 22,6 44,5 16,7 (4,6) 1,80 1, years 331,3 15,9 19,9 43,1 15,9 (5,2) 1,76 1,68 S. Labour Force Survey (Microcensus) 4/2012 Comparison of period TFR with cohort TFR for women born 1970 and before shows completed cohort fertility not lower than 1.6 children per woman. Only women born 1946/47 have reached cohort fertility higher than replacement level (figure 4). Women born around 1960 have a cohort fertility of For younger women still some more births are to be expected. Women born around 1970, the youngest cohorts with completed fertility have given in average birth to 1.6 children. Reflecting the cohort 1946/47 a regional spread in TFR of 1.59 (Vienna) to 2.25 (Burgenland) is observed in average number of births. At the time being regional disparities became clearly smaller. in % total number of children (realized + desired) realized number of children For women born in 1970 the spread in cohort fertility reaches from 1.50 (Vienna) to 1.76 (Vorarlberg). 5 E.g. Labour Force Survey (Micro census) 4/2012, supplementary questions on (additionally) desired births. 5

6 Figure 4: Cohort fertility for women born 1945/46 to 1970/71 by Austrian NUTS 2-Regions 2,3 2,2 2,1 2,0 1,9 1,8 1,7 1,6 1,5 1,4 Burgenland Carinthia Lower Austria Upper Austria Salzburg Styria Tirol Vorarlberg Vienna Austria 1,3 S: STATISTICS AUSTRIA, Population projection 2012 Projection of fertility To project future fertility patterns Statistics Austria uses a modified Hadwiger function 6 (see Annex 1). This model estimates age-specific fertility rates by four parameters, i.e. TFR, MAC, the mode and the variance of the fertility distribution. Therefore, assumptions on all this parameters have to be formulated for the 9 Austrian NUTS 2-regions as well as for 3 fertility variants (high medium - low). We assume a change of fertility parameters until the year The time after all parameters should remain constant on the projected 2060 level. Total fertility rate and mean age of childbearing The first step is to project the TFR for the year 2060 according to the mean variant under the precondition that completed cohort fertility will not fall substantially under the observed cohort fertility of generation 1970/71. The Austrian level of this value is 1.60 as shown above, the nine 6 Rodgers, A., Little, J.: Parameterizing age patterns of demographic rates with the multiexponential model schedule. In: Mathematical Population Studies 3, 1994, P Condgon, P.: Graduation of Fertility Schedules: An Analysis of Fertility Patterns in London in the 1980s and an Application to Fertility Forecasts. Regional Studies 4, 1990, P

7 NUTS 2-regions vary between 1.76 (Vorarlberg) and 1.50 (Vienna).The forecast is done by a logistic regression model of TFR by time ( ). In the year 1999 period fertility started to recover in Austria. Regressions use for NUTS 2-region completed cohort fertility of generation 1970/71 as an upper asymptote. <2> Table 2: Projected Total Fertility Rates 2060 by NUTS 2-Regions and Variants 7 Year Burgenland Austria Austria berg Lower Upper Vorarl- Carinthia Salzburg Styria Tirol Vienna Austria ,20 1,32 1,35 1,41 1,40 1,29 1,36 1,51 1,29 1, ,20 1,34 1,37 1,46 1,40 1,30 1,38 1,46 1,34 1, ,23 1,32 1,35 1,41 1,35 1,23 1,33 1,51 1,31 1, ,22 1,30 1,42 1,48 1,45 1,30 1,39 1,54 1,41 1, ,24 1,32 1,40 1,45 1,39 1,30 1,37 1,46 1,39 1, ,28 1,36 1,46 1,52 1,44 1,32 1,43 1,57 1,41 1, ,27 1,37 1,46 1,49 1,45 1,32 1,41 1,55 1,38 1, ,25 1,42 1,46 1,49 1,40 1,31 1,41 1,52 1,39 1, ,29 1,38 1,41 1,48 1,41 1,30 1,37 1,47 1,36 1, ,31 1,40 1,46 1,51 1,43 1,32 1,39 1,51 1,39 1, ,27 1,37 1,42 1,51 1,39 1,32 1,38 1,51 1,36 1, ,28 1,42 1,47 1,55 1,46 1,35 1,42 1,55 1,42 1, ,28 1,40 1,48 1,52 1,45 1,33 1,40 1,52 1,41 1, Medium V. 1,49 1,53 1,62 1,67 1,53 1,49 1,53 1,62 1,49 1,57 High Var. 1,99 2,03 2,12 2,17 2,03 1,99 2,03 2,12 1,99 2,07 Low Var. 0,99 1,03 1,12 1,17 1,03 0,99 1,03 1,12 0,99 1,07 Those regressions produce fertility levels between 1.49 (Burgenland, Styria, Vienna) and 1.67 (Upper Austria) with a total value of 1.57 for Austria in 2060 (table 2). The high and low variant are assumed to vary at this time by ±0.5 children per woman. As spatial differences of MAC diminished over the last decades, MAC is assumed to rise up to 33.0 years in 2060 for all Austrian regions and all three fertility variants. The next stage is to translate projected period TFR into a path of future tempo-adjusted TFR*. Due to Bongaarts-Feeny s model, the Austrian tempo-adjusted TFR* for the year 2011 currently mounts up to 1.70 children per woman (TFR: 1.43; r t : 0.16). Because of the assumption that in the long run of population projections TFR, TFR* and completed cohort fertility will converge to the same value (e.g for Austria), consistent paths of TFR* and r t have to be found. The first step is to calculate a path for the tempo-adjusted TFR*, starting with the actual value for the base year (1.70) and converging asymptotically to the projected value for 2060 (1.57). 7 The model for the Austrian population projection is formulated in a bottom-up approach. Therefore the result for the total of the country is the sum of a regional forecast by the 9 NUTS 2-regions. In this case demographic rates for the total of Austria have to be recalculated from the projection results for vital statistics and population. With respect to the increasing weights of regions with lower fertility, the TFR for Austria will rise to 1.55 instead of 1.57 as indicated in this table where the results of an independent extrapolation for the total of Austria are presented. 7

8 TFR, TFR*, r Figure 5: Projected fertility parameters for Austria 1,8 35,0 1,6 1,4 34,0 1,2 33,0 1,0 0,8 0,6 0,4 0,2 TFR TFR* r MAC 32,0 31,0 30,0 AMAC D F 0,0 29,0 S: STATISTICS AUSTRIA, Population projection 2012 We chose an asymptotic term, like <3>, where Index t is number of the projection year, is the tempo adjusted TFR of the last projection year, is the tempo adjusted TFR of the base year, and is the number of projection years. The second step is to estimate a path for r t with r t 0 and r t = MAC (last year of projection) minus MAC (base year of projection). For this calculation we used 8. <4>, where

9 Index t is number of the projection year, is the mean age of childbearing in the last projection year, is the mean age of childbearing in the base year, and is the number of projection years. The parameter y is chosen by graphical inspection to receive a smooth curve including the observation of r t in the base year of the projection. Based on the above mentioned relations (formula <1>) TFR t could be easily recalculated by: <5> The results of this exercise for the total of the country and the mean variant of the latest Austrian population projection are shown in figure 5. Table 3 presents also values of period TFR and tempoadjusted TFR* for the high and the low fertility variant. The green line illustrates the path of the projected TFR*, which declines gradually to the expected long-term quantum of fertility at a level of 1.57 children per women after the year The yellow line indicates the diminishing tempo r t in changing postponement of childbearing, which is reflected by the red line of MAC. MAC is assumed to reach the level of 33 years in Finally the blue line shows the future path of period fertility, derived from the projected developments of TFR* and r t (formula <5>). Table 3: Projected fertility parameters for Austria by variants Year MAC r t Medium variant High variant Low variant TFR TFR* TFR TFR* TFR TFR* ,02 0,160 1,43 1,70 1,43 1,70 1,43 1, ,17 0,154 1,44 1,70 1,45 1,71 1,43 1, ,61 0,139 1,45 1,68 1,49 1,73 1,42 1, ,23 0,116 1,47 1,66 1,56 1,77 1,40 1, ,74 0,094 1,48 1,64 1,64 1,81 1,38 1, ,15 0,074 1,50 1,62 1,71 1,84 1,35 1, ,47 0,056 1,51 1,60 1,78 1,88 1,31 1, ,70 0,040 1,53 1,59 1,84 1,92 1,27 1, ,85 0,026 1,54 1,58 1,91 1,96 1,23 1, ,95 0,014 1,55 1,57 1,96 1,99 1,18 1, ,99 0,005 1,56 1,57 2,02 2,03 1,13 1, ,00 0,000 1,57 1,57 2,07 2,07 1,07 1, ,00 0,000 1,57 1,57 2,07 2,07 1,07 1, ,00 0,000 1,57 1,57 2,07 2,07 1,07 1, ,00 0,000 1,57 1,57 2,07 2,07 1,07 1,07 Beside TFR and MAC we need also assumptions on the development of future modes and variances of the age-specific fertility patterns. These four parameters are necessary for the estimation of future fertility patterns by Hadwiger function for all Austrian NUTS 2-regions, variants and projection years. 9

10 Variance and mode of age specific fertility rates The variances of the Austrian and regional age specific fertility rates declined rapidly during the 1970s. At the time being they are rising again. Once more, the development of Vienna differs from the other eight NUTS 2-regions. On the one side Vienna s variance of age specific fertility rates started to rise earlier than in the other Bundesländer, on the other hand Vienna s variance increases much stronger (figure 6). This is a consequence of Vienna s higher percentage of population born abroad. To a certain percentage those women give birth to their children in a younger age than women born in Austria. Figure 6: Variance of age specific fertility rates by Austrian regions 50 Projection 45 Burgenland Carinthia 40 Lower Austria Upper Austria Salzburg Styria Tirol Vorarlberg Vienna Austria 20 S: STATISTICS AUSTRIA, Population projection 2012 Similar to TFR the variance was extrapolated to the future by a decreasing trend. According to total fertility the trend is built on the years Based on the linear trend the increases of variances are reduced by 2% for each projection year. For Vienna the trend is additional reduced by 1/3 to prevent an increase beyond observed levels of variances by NUTS 2-regions in the past (Salzburg, Tyrol and Vorarlberg). Moreover, from today s point of view, an extraordinary strong increase of variance would lead to unplausible high fertility rates of women at the age of 40 to 50 years. 10

11 Figure 7: Fertility parameters for Austria TFR 3, Mode MAC Variance TFR 2,50 2,00 1, , ,50 S: STATISTICS AUSTRIA, Population projection 2012 The 4 th parameter to estimate our fertility functions is the mode of the distribution. The mode represents the age where the highest fertility rates are observed. In the past this parameter converged from a lower level to the mean age of childbearing and corresponds to it at the time being (figure 7). We assume for the future, that the mode of the fertility function will be on a par with MAC. This should be true for all three variants of fertility and all nine Austrian NUTS 2-regions. Figure 8 compares Austrian age specific fertility rates for 1972, 1988 and 2011 with the projected rates for 2030 and 2060 by all three fertility variants. In the medium variant the mode of the distribution will reach a level as observed at the end of the 1980s. Between 1988 and 2030 there is a shift of six years from 25 to 31 years and until 2060 by additional two years to 33 years. In the case that the high variant might become true, the peak of fertility could reach the level of the year 1972 with a value of about 14 percent. 11

12 Figure 8: Age specific fertility rates for Austria 0,16 0,14 0, (VAR: 38,8; SD: 6,2 Y.) 1988 (VAR: 26,9; SD: 5,2 Y.) 2011 (VAR: 29,9; SD: 5,5 Y.) 2030med (VAR: 32,8; SD: 5,7 Y.) 2030high (VAR: 32,8; SD: 5,7 Y.) 2030low (VAR: 32,8; SD: 5,7 Y.) 2050med (VAR: 34,5; SD: 5,9 Y.) 2050high (VAR: 34,5; SD: 5,9 Y.) 2050low (VAR: 34,5; SD: 5,9 Y.) 0,10 0,08 0,06 0,04 0,02 0, Age in years S: STATISTICS AUSTRIA, Population projection

13 Annex 1: The Hadwiger Function for modeling fertility patterns This function models fertility patterns by using 4 parameters, namely: F, total fertility rate (TFR) MO, the mode of the function MAC, mean age of childbearing VAR, the variance ( ) ( 13

14 Annex 2: Results of the Austrian population projection (Press Release ) Austrian population will increase to 9 million inhabitants during the next 20 years Vienna, According to assumptions regarding fertility, mortality and migration, Austria's population will increase to 9.00 million people (+6.9%) by 2030 and to 9.38 million (+11.4%) by This new population projection by Statistics Austria is based on the reference year 2011, when Austria had a population of 8.42 million. Regional development: Highest population growth expected for Vienna According to the main scenario, the population development will vary substantially among the nine federal states (Länder) during the next decades. Vienna, the capital of Austria (+27%), and Lower Austria (+17%) are expected to have the most marked population growth until 2060, followed by Burgenland (+12%), Vorarlberg (+11%), Upper Austria and Tyrol (+7% each), Salzburg (+4%) and Styria (+2%). Carinthia is the only province being expected to lose some population until 2060 (-8%). Population growth will be accompanied by ageing Children and young people below 19 years of age are projected to account for a slightly smaller proportion of the total population, namely 19% in 2060, compared to 20% in The majority of the Länder will follow this trend, except Vienna, where a rising proportion of young people is expected. As the "baby-boom generation" (those born between 1955 and 1970) will reach the retirement age after 2015, the size of the elderly population (aged 65 and over) is projected to increase in all of the nine Länder. Thus, for Austria as a whole, the proportion of the elderly population will grow from 18% in 2011 to 29% by By then, Carinthia (34%) as well as Burgenland (33%) are expected to remain the "oldest" regions while the western part of Austria (Tyrol and Vorarlberg) as well as Vienna will still rank as the "youngest". Vienna will hold a share of 23% elderly people by The average age of Austria s population will significantly increase over the next decades from 41.8 (2011) to 47.1 years (2060). 14

15 Population increase 2011 to 2060 by NUTS II regions and broad age groups Population by broad age groups Region / Year Total Under 20 to years Under 20 to years 20 Years years and older 20 Years years and older Absolute In per cent Austria , , , , ,4 61,9 17, , , , , ,1 56,9 24, , , , , ,6 52,5 28,9 Burgenland ,6 61,9 19, ,3 54,6 28, ,2 49,4 33,4 Carinthia ,8 60,9 19, ,1 54,2 28, ,6 49,4 34,0 Lower Austria ,7 60,6 18, ,1 55,5 25, ,8 50,8 30,4 Upper Austria ,7 61,2 17, ,6 55,7 24, ,0 51,1 29,9 Salzburg ,2 62,1 16, ,6 56,8 24, ,7 52,5 29,8 Styria ,3 61,9 18, ,6 56,4 26, ,3 51,8 31,0 Tyrol ,3 62,3 16, ,9 57,3 23, ,8 52,6 29,6 Vorarlberg ,2 61,3 15, ,2 57,0 22, ,0 52,0 29,0 Vienna ,3 63,9 16, ,5 60,1 19, ,0 56,8 23,2 S: STATISTICS AUSTRIA: Population projection

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