Nova Scotia Population - Trends and Implications Lars Osberg Economics Department Dalhousie University June 5, 2007

Why are we worried?

So traditional working age population likely to decline

What’s the context ? Birth rates in Canada and the OECD

Forecasting Future Populations ? Much less reliable for small areas, long time scales  Population = Births - Deaths + Net Inflow  Nationally, migration is policy variable At local level, gross migration flows are much larger than net flows or changes in natural increase  Statistics Canada Life Paths model Projects implications of continuation of recent trends – but labour market response is not modeled  Shortages => higher wages => changes in migration Halifax In Halifax Out Halifax Net Rest NS In Rest NS Out Rest NS Net 01/01/ /01/ /01/ /01/ /01/

Population growth rates = births + net immigrants - deaths

Participation trumps Demography!

Will there be a “Labour shortage”? Labour Force = participation*population

V Canada; Employment rate Both sexes; 55 + V Nova Scotia; Employment rate Both sexes; 55 +

V Canada; Median age; Total, all retirees; Both sexes V Canada; Average age; Total, all retirees; Both sexes

Older Workers – increasingly important !

How long can people work? How long do they want to work?  Males 65+ labour force participation rate % % %  Many reasons to expect future increase jobs are now much less physical workers better educated, career oriented Many need the money  38.4% of retirees need GIS  “Working Longer” Social Policy Objective in many countries - only a “good thing” if voluntary

Labour force = Participation Rate * Source Population  “Labour Shortage” = Demand > Supply  Wages increase, firms start training, etc. = “Too many jobs”  In exactly what sense is this a problem for Atlantic Canada?  Forecasts of “shortage” depend on: Demand projections Population & Participation assumptions + Interaction of Supply & Demand in a market economy, firms will raise wages & invest to increase labour productivity  Productivity trend dominates GDP growth

Is rural viability really the key problem for Nova Scotia?  Population decline severe in rural areas  Availability of services depends on population base Key issue is Minimum Efficient Scale for schools, hospitals & health services Technical change in telecommunications very rapid – changes space/service relation  How is a ‘problem’ defined ? determines which solutions are imagined

Useful Web Links  OECD - Ageing and Employment Policies  Policy Research Initiative Population Aging and Life-Course Flexibility  