From Contract to Status: Perspectives on Employment Seniority*

Length of service as a criterion governing personnel decisions is a widely applied normative principle. Contractual agreements that provide that employees' status with respect to promotion and layoff be based on seniority serve to limit discrimination and favoritism, remove an element of competition among workers, and provide a form of social insurance against the contingencies of aging. This status variable is sometimes erroneously perceived as “job ownership.” Decline of labor turnover, the aging of the labor force, and growth of pension programs reinforce concern about seniority. Expectations based on seniority have been challenged under the Civil Rights Act by former discriminatees who question the fairness of the rank ordering. In times of declining opportunity seniority as an allocative device assumes greater importance, while in a utopia, where all jobs are equally satisfying and there is full employment, seniority would be irrelevant.     

Demography of ageing

The world's elderly population, 60 years and older, reached 251.6 million by 1950, 488 million by 1990 and, according to United Nations projection estimates, it will reach 1205.3 million in 2025. These figures mean an increase of 144% between 1950 and 1990 and of 146% between 1990 and 2025. Asia accounted for the highest number of elderly persons: 49.2%, in 1990, Europe reported 19%, Africa 6.3%, and Latin America 6.5%. On the other hand, over the next 35 years, the European region figure will decrease to 12%, while other regions will show increased percentages: 58% for Asia and around 8% for Africa and Latin America. Fertility and mortality decreases in developing countries will result in the elderly population constituting 12% of the total population in the year 2025. In this same year, Latin America will have the same high proportion of elderly persons as the world will have in the year 2020. On the other hand, some of the developed regions, such as Northern America and Europe, will reach figures around 27%. Below the average value for these regions in the year 2025 will be the former Soviet Union with 20% and Oceania with 19.2%. Another way to confirm population aging is by computing the median age of a population. Thus, while in 1950 the world median age was 23.4 years, it increased up to 24.2 years in 1990, and is estimated to be 31.1 years by the year 2025. Developed regions show higher population aging than the less developed ones. In fact, in 1990, developed countries had a median age of 33.7 years and developing countries had a median age of 22 years. While the median age will be 40.7 years for developed countries in the year 2025, it will only be 29.7 years for less developed countries. Nevertheless, this relatively high median age indicates that the aging process has already started in less developed countries.     

Aging in Asia: A cultural,socio-economical and historical perspective

Asia has about 60% of the world population and population aging is occurring more rapidly in Asia than in Western countries. The group aged 65 years and above will increase from 207 million in 2000 to 857 million in 2050, a staggering increase of 314%. The diversity in economic, demographic, religious, cultural and geo-political factors in Asia is unparalleled by any other continent, and is, in part, contributory to the rapid rise in population aging. By 2050, those under 15 years old will have shrunk from 30% in 2000 to 19%, while those aged 65 years and above will increase from 6% to 18%. In addition, the gender divide still persists with 100 elderly women to 70 elderly men. These projected demographic changes pose three major challenges: 1) how best to address the rising population of the group aged 65 years and above, 2) how to address the shrinking population of the young as well as the working adults, and 3) how to address the problems arising from the disproportionate increase in older women than men. From now to 2050, it will be expeditious for each country in Asia to look into ways of reversing the decline in total fertility rates (TFRs) and restore to replacement levels. If not, at least introduce measures to halt its free fall. Due to the complexity of factors that have influenced the fall in TFRs in Asia, it will be a daunting task to reverse this fall. There is no “single size fits all” solution to this complex problem. Research work in this short-term strategy in addressing the aging population is urgent. In the longer term, the East-West Centre have suggested four modalities, 1) establish policies and programmes that enhance traditional Asian systems of family support for the elderly; 2) introduce policy reform that encourages the elderly who are still capable of remaining in the work force; 3) create institutions and systems that support high levels of personal saving; and 4) formulate public programmes, including pension schemes and national healthcare systems. We need to work while there is time.     

GENDER-COHORT SUCCESSION AND RETIREMENT AMONG OLDER MEN AND WOMEN, 1951 TO 1984

Long-term trends in occupational change and retirement policy have influenced the relative labor force participation and retirement patterns of subgroups of the older population. Structural changes in the economy have had a large impact on older men and women, pushing the former out of the labor force while pulling the latter in. Meanwhile, the expansion of pension programs for the aged has generally increased the early retirement of men under age 65. Time-series analyses of these trends between 1951 and 1984 point to the specific influences of these factors on gender-cohorts.     

The 1988 Nigerian population policy

The population of Nigeria is one of the fastest growing rates in the world at 2.5-3.5%/ year. The estimated population was 101.11 million in 1987 and by 2015 is projected to be 280 million. Nigeria was the 10th most populous country in 1985 and by 2025 it would be 4th. The average number of children for each woman is 6-7 and the death rate is 16/1000. A recent government policy has restricted women to 4 children. 47% of the population is under 15 years of age. Goals of the government include reducing the growth rate, improving the standard of living, and balancing the population distribution between urban and rural areas. To do this they will need to promote awareness of their population situation to all citizens, educate young people on family planning, and to enhance development in rural and urban areas by slowing the migration to the cities. Most Nigerians view this policy as discriminatory against women, and ineffective in curbing present growth in population. Religions including Catholicism, Islam and some Christian groups do not promote birth control. Although many groups oppose this policy, most realize that the country is over populated and that with the present economic situation, a reduction in growth is needed. A more acceptable policy would restrict Christians, who marry only 1 wife, to 4 children and Moslems, who can have up to 4 wives, could have only 1 child/wife or 4 children for the man, in each family. A better method would be to encourage 3 children/family because of the young age structure in the population. Even if the fertility would decline to 2 children/family there would be substantial growth for many years to come.     

Inequality in an OLG economy with heterogeneous cohorts and pension systems

We analyze the consumption and wealth inequality in an OLG model with mandatory pension systems. Our framework features within-cohort heterogeneity of endowments and heterogeneity of preferences. We allow for population aging and gradual decline in TFP growth. We show four main results. First, increasing longevity translates to substantial increases in aggregate consumption inequality and wealth inequality. Second, a pension system reform from a defined benefit to a defined contribution works to reinforce consumption inequality and reduce wealth inequality. Third, minimum pension benefits are able to partially counteract an increase in inequality introduced by the defined contribution system, at a fiscal cost. Fourth the minimum pension benefit guarantee mostly addresses the sources of inequality which stem from differentiated endowments rather than those which stem from heterogeneous preferences.     

Evaluating a basic-needs strategy and population policies: the BACHUE approach

The BACHUE model, a dynamic simulation technique developed within the International Labour Organization's World Employment Program, has been applied to the Philippines. The model simulates behavior and consequences in a number of key areas: fertility, marriage, migration, savings and expenditure, and labor force participation for households and a macro-model for demand, ouput, employment, and income. The design and development of the model are discussed in detail. The model was run for a series of 13 experiments ranging from nationlization of modern sectors, increasing self-employment, movement toward labor-intensive techniques, changes in growth rates of various sectors, and a reduction in fertility by 2% over 1976-1985, an increase over the 1% assumed in the base run. Runs R-2 to R-11 all showed that a change in basic needs is associated with significant declines in fertility, largely because of increasing education and decreasing mortality. Better economic conditions in rural areas also reduced migration. R-13 which examined the effects of a family planning program of moderate size on ultimate fertility, showed that even by year 2000 the effects were small. The population is reduced 5% over the run which assumes negative income tax and government subsidies to poor families but the gain in income per adult is less than 4%. Any real improvement in income as the result of family planning will take 40-50 years to achieve. Economic incentives, on the other hand, have much faster demographic results. The models also show that rural-urban migration is responsive to policy changes. Planners are cautioned that the model is not a picture of the entire range of human behavior but is an adjunct for use in analyzing interaction between policies.     

我国生育政策城乡一体化方案与配套支持

我国生育政策城乡一体化是人口转变与社会发展之必然。一方面,城乡二元的生育政策很难体现城乡公平,用生育政策的优惠来弥补社会保障功能的匮乏这一做法已越来越不符合社会发展趋势;另一方面,二元生育政策本身的复杂性增加了政策执行过程中的成本与困难。生育政策城乡一体化应以城市与农村均实行一孩半政策作为既简化又稳妥的改革方案。生育政策城乡一体化还应配备配套措施,完善生育政策的评估指标,将少生与不生纳入评估范畴,促进城乡医疗、养老、教育等公共服务机会均等化、户籍管理动态化,还要正确理解人口老龄化,为生育政策城乡一体化提供良好的执行环境。     

浅析廊坊市社区居家养老服务体系的构建

廊坊市老龄人口总数和年增长率均高于全国平均水平,已提前进入老龄化社会,养老服务问题愈加凸显,加快养老服务体系建设至关重要。社区居家养老服务模式集合了家庭养老和机构养老的优点,以其人性化、便捷性、操作性强等独特优势,已成为全世界非常推崇的养老服务模式。通过纵向数据分析和横向比较分析,描述廊坊市人口老龄化的基本态势,深入剖析居家养老服务模式的内涵,并在探讨廊坊市居家养老服务的实践与存在的不足的基础上,提出构建社区居家养老服务体系的对策。     

The Singapore state's response to migration

Migration trends in Singapore are traced since 1819. Immigration has been encouraged to advance economic development. Local and international factors fuel migration to Singapore. Singapore depends upon foreign labor. Population growth has been mainly due to migration from China, India, Malaysia, and countries surrounding Singapore. Independence in 1965 led to policies aimed at controlling high population growth. Policies became pronatalist after 1987. Foreigners in 1998 were over 18% of the total population, which was six times the number in 1970. About 2000 Singaporeans per year emigrated during the 1990s. Singapore is encouraging overseas industrial development. In 1997, the Prime Minister called for recruitment of foreign talent in order to meet the challenges of an increasingly globalized world, low fertility, and an aging society. Economic planners recommend short-term migration of unskilled foreign workers who would be a revolving pool to fill jobs natives do not want. Singapore is promoting arts and culture in order to keep people in Singapore. The government has issued assurances that natives will have first priority on jobs, education, and training. Singapore's ability to absorb workers will depend upon its economic performance.     

A neoclassical Kaldor model of real wage declines

A model linking macroeconomic equilibrium and income distribution in balanced growth equilibria is developed as a variant to the Kaldor model of factor shares. It departs from the original Kaldor model in assuming equal saving rates and a neoclassical production function. Macroeconomic equilibrium (national savings equal to investment) combines with competitive microeconomic behavior to determine the real wage and real interest rate. An increase in the ratio of national debt to labor reduces the real wage, explaining recent declines.     

Problematic Progress in Asia: Growing Older and Apart

The purpose of this article is to describe the demographic dynamics in 14 Asian countries. The foreseen impacts on economic growth, income disparity, social stability, pension programs, retirement, health care insurance, and labor market are presented. Public policy recommendations are delineated.     

Does Europe need immigrants? Population and work force projections

European countries defined as all Northern and Western Europe including the former East Germany had a population of 498.4 million in 1990. In 1990 Western Europe had 374.4 million people. The European Community (EC) makes u 92% of the total population. Projections forecast a peak of the EC population (excluding the former East Germany) in 2005 at 334.2 million compared with 327 million in 1989, then declining to 332.5 million in 2010, 329.0 million min 2015 and 324.5 million in 2020. In Europe outside the East, the 20-24 year old work force entrance age group will drop from 29,860,000 in 1990 to 26,400,000 in 1005 and 23,480,000 in 2000: decreasing by 6,380,000 or 21.3%. Fertility rose by 22% in Sweden between 1985 and 1990, the rise of negligible in France and Belgium, but 2% in the UK and Switzerland, 4% in the Netherlands, 13% in Norway, 16% in Denmark, and even 6% in Germany and Luxembourg. The Ec labor force was 145 million in 1990 (excluding East Germany); it is projected to peak at 146.9 million in 2000, decline slowly until 2010 and decline faster up to 2025 with the steepest decline occurring in Germany and Italy. Unemployment rates would change from the 1990 estimate of 15.7 million to 15.5 million in 1995. Net migration into the 12 EC countries was on average -4,800 from 1965 to 1969; 357,000 from 1970 to 1974; 164,400 from 1980 to 1984; and 533,000/year from 1985 to 1989 as a result of the rise of asylum applicants and migration of ethnic Germans into Germany. Increased immigration is not needed to satisfy work force shortages for the next 10-20 years in Western Europe or in the EC. Other issues addressed are the economic activity forecast, the hidden labor supply, skill shortages, Eastern Europe, and teenage shortage. High-level manpower movements, immigration of asylum seekers, and illegal immigration will continue, but in the long run the conditions of employment and welfare support have to be improved for the women of Europe.     

Demographic and employment shifts: implications for benefits and economic security

This Issue Brief examines factors affecting the population's age distribution and composition, such as mortality rates, fertility rates, and immigration. In addition, it examines factors affecting labor force composition, such as immigration, increased labor force participation of women, and retirement trends, and discusses the potential impact of these changes on publicly financed programs: Medicare, Medicaid, Social Security, and federal employee retirement systems. The discussion also highlights the implications of these population and labor force changes on employers, employees, and retirees. The elderly population--now 31.8 million, representing 12.6 percent of the population--is projected to experience tremendous growth between 2010 and 2030, when the baby boom generation reaches age 65, rising from 39.7 million, or 13.3 percent of the population, to 69.8 million, or 20.2 percent of the population. Growth in the elderly population has implications for retirement and health care systems. Population projections suggest that the traditionally pyramid-shaped work force, with a proportionately greater number of younger workers than older workers, will be replaced with a more even age distribution. Consequently, significant and continued modifications to benefit packages, such as changes in compensation structures in which earnings automatically rise with age, are likely to occur. Women's labor force participation began to accelerate in the mid-1950s, rising 75 percent among women aged 25-44 in 1991, although there is some indication that this growth may be flattening. With women comprising a greater part of the labor force, employers will be encouraged to develop and implement programs to better accommodate their needs. Increased life expectancy, a decreased percentage of entry level workers, changes in Social Security's normal retirement age from 65 to 67, and employer plans to raise the normal age of retirement or provide incentives to delay retirement, could raise the average age of retirement. However, other factors, such as poor health, other sources of retirement income, and individual preferences for retirement, could still dominate the retirement decision. The combination of increased average life expectancy guaranteeing more years of retirement to finance and rising dependency ratios increases the future cost of Social Security financing. Medicare financing is also an important policy issue because the program is projected to experience financial difficulties in the short term, resulting from explosive health care costs. In addition, Medicaid expenditures are consuming increasing amount of shrinking state budget resources--a large portion of which is used to finance nursing home care for a growing elderly population.     

Policy experiment in Russia: cash-for-babies and fertility change

Population decline in modern day Russia is alarmingly steep: Russia loses approximately 750 thousand people each year. To combat population decline, the Russian government instituted aggressive pro-natalist policies. The paper evaluates the capacity of new policies to change women's reproductive behavior using a socio-institutionalist theoretical framework, which analyzes the gendered interaction between the states, the labor market, and family. The paper arrives to a disappointing conclusion that while efforts to improve fertility are quite aggressive, new policies do not challenge gendered hierarchies neither in public nor in private spheres, which will further depress fertility rates of Russian women.     

Inverse J Effect of Economic Growth on Fertility: A Model of Gender Wages and Maternal Time Substitution

This paper presented a model where economic growth, via growth in female wages relative to male wages, encouraged households to raise paid female labor supply and have more children by substituting child care for maternal time. A threshold logarithm per capita output, above which fertility decline reverses, was predicted to depend on subsidized child care, maternity pay, and the value placed on children and maternal time spent rearing children. The predictions explained recent evidence and identified cross country differences in gender wages, family policy and willingness to substitute maternal time in childrearing as important factors in an inverse J-shaped effect of economic growth on fertility. The analysis was robust to the introduction of education and cost sharing among children in child rearing. Economies of scale in child rearing reduced the threshold logarithm of per capita output. Demand for child quality continued to rise with wages despite fertility decline reversal.     

World and regional labour force trends and prospects

Changes in fertility during 1970-1985 will not have any effect on the composition of the world work force until 1985 because the people who will be of working age at that time have already been born. However, fertility for this period will directly influence the size of the age group 15-30 in the year 2000. Moreover, fertility trends for this period will have an indirect effect on participation of women in the labor force. The number of people in the labor force has proportionately followed total population. Just as total population is projected to increase in the single decade 1970-1980 by an amount equal to its size in 1750, so the labor force will increase by 360 million during the 1980's (its original size in 1750). By the end of the present century the world labor force may well number some 2,6000 million, reaching 3,000 million by the year 2010; 4,000 million by 2030; 5,000 million by 2070; and stabilizing at about 5,200 million by the end of the 21st century. There will be great regional variations. Increases will range from 20-35% in Europe and the U.S.S.R. to 100-120% in South Asia, Africa, and Latin America. For East Asia and North America the increases may amount to 60% by the year 2000 and 100% by 2050. In 1970 less developed regions had 2/3 the world's labor force; by 2000 they will have 3/4. In 1970 about 20% of the labor force in more developed regions were working in agriculture while in less developed regions 2/3 were so engaged. In other terms, in more developed regions 10 farmers supported 108 persons while in less developed regions 10 farmers supported only 38. According to Food and Agriculture Organization projections, by 2000 only 3.5% of the labor force in developed regions and 43.5% in less developed regions will be in agriculture. Differences in gross national product between regions is striking. In 1970 the less developed regions contained 70% of world population, 67% of the world labor force, 87% of the world agricultural labor, and produced 15% of its wealth. There are also sharp contrasts in participation in the labor force. In less developed countries more youths and older persons are in the labor force while in developed countries more women work. By the year 2000 female activity rates in more developed regions will increase for ages 20-64 and decrease for those under 20 and over 64. This will raise female participation in the labor force to 35%. In less developed regions female participation is expected to decline. The proportion of young workers is expected to increase in less developed and decline in more developed regions; the same will be true for older workers. The dependency burden will be concentrated among the young in less developed nations; in more devel oped regions there will be larger numbers of older dependents.     

Paying for the health and social care of the elderly

The aging population of Japan is causing serious concern among social policymakers. The most urgent issue is to find a way to pay for the health and social care of the frail elderly. After universal coverage of pension and health insurance was achieved, but just before the economic growth rate was considerably slowed, in part, because of the oil crisis, the Japanese government more than doubled pension benefits and made medical care for the elderly free. Since the early 1980s, the government has tried hard to cut and control these benefits, only with moderate success. With a consumption tax rate of only 5%, rather than the proposed 7%, the government is now considering establishing a new health and social care insurance scheme for the elderly to finance the increasing cost of their care.     

Paying for the Health and Social Care of the Elderly

The aging population of Japan is causing serious concern among social policymakers. The most urgent issue is to find a way to pay for the health and social care of the frail elderly. After universal coverage of pension and health insurance was achieved, but just before the economic growth rate was considerably slowed, in part, because of the oil crisis, the Japanese government more than doubled pension benefits and made medical care for the elderly free. Since the early 1980s, the government has tried hard to cut and control these benefits, only with moderate success. With a consumption tax rate of only 5%, rather than the proposed 7%, the government is now considering establishing a new health and social care insurance scheme for the elderly to finance the increasing cost of their care.