Population projections: Uncertainty and the user

perspectivePresentation to

INIsPHO SeminarNewry, 2 December 2008

Tony Dignan

Overview

• Introduction

• Sources of uncertainty

• National projections

• Sub-national projections

• Concluding remarks

Uncertainty

• The future is inherently uncertain• That is why users look to population projections

to help in planning for the future– How many school places are required? Hospital

beds? Social and caring facilities?

• Dealing with uncertainty is also the major challenge in producing forecasts

• How to manage uncertainty in using projections?• Start by understanding the sources

Sources of uncertainty

• Assumptions– Judgements made about the future course of events– Based on what has happened in the (recent) past– Informed by expert opinion on what the future holds

• But:– Trends can change direction – turning point problem– The recent past – distinguishing cyclical events and

longer-term trends– External and/or unanticipated ‘shocks’ may occur– Changing economic circumstances

Components of change

• Deaths– The population ‘at risk’ is already born

• Fertility– Subject to choices that people make in future years– Social trends – can change

• Migration– An array of influences – economic, social, etc– Relative attractiveness of the country, region, for

which projections are being prepared– The most volatile component

Past experience

• Changing trends

• Changing economic circumstances

No rth ern Ire lan d - Ac tu a l an d p ro jec ted p o p u la tio n , 1971 -2031

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

1951 1961 1971 1981 1991 2001 2011 2021 2031

'000

s

H istorical

1971-base d

1977-base d

1985-base d

1994-base d

2004-base d

2006-base d

Why was the 1971 forecast so far off the mark?

End of the 1960s ‘baby-boom’ – sharp fall in fertility ratesSimilar experience across UK and Europe (Shaw, 2007)

T o tal fertility rate: N o rth ern Irelan d , 1971-2006

1 .5

1 .7

1 .9

2 .1

2 .3

2 .5

2 .7

2 .9

3 .1

3 .3

1971 1981 1991 2001

TF

R Actu a l

1971 Assu m ed

P opulation projections, Ireland, 1996-based

2,500

3,000

3,500

4,000

4,500

5,000

1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031

'000

s

Actual

M 1F1

M 1F2

M 1F3

M 2F1

M 2F2

M 2F3

The out-turn in 2006 was in excess of each 1996-based scenario – why?

Booming economy - Net inward migration exceeded expectations

N et m igration, Ireland: Actual and assum ptions - 1996-based

-60

-40

-20

0

20

40

60

80

'000

s

Actual

M1

M2

Variations in out-turn by age group – older and younger more accurately predicted – why?

Ire land: Actua l 2006 com pared with 1996-based pro jected (M1F2)

0.0 2.0 4.0 6.0 8.0 10.0 12.0

0-14

15-24

25-44

45-64

65+

All

Ag

e g

rou

p

Per cent

Irelan d : Mig ratio n b y ag e g ro u p , 2007 - rate p er 1,000 p o p u latio n

-30

-20

-10

0

10

20

30

40

50

60

0 -14Y ears

15 -24Y ears

25 -44Y ears

45 -64Y ears

65 Y earsan d O ver

Ra

te p

er

1,0

00

Im m ig ra tio n

E m ig ra tio n

Net

Migration is strongly age-selectiveErrors in migration assumption have less effect on older age groupsOver time, will affect younger age groups

National projections – 2006-based

• Variants/scenarios– Alternative combinations of assumptions– Typically a ‘high’ and a ‘low’– NOT upper and lower ‘limits’ for a given confidence

level– Reflect producers’ uncertainties– But can also help the user manage uncertainty

• Uncertainties?– Migration is especially uncertain at this time

Northern Ireland

• Net migration– Recent inflows driven by EU Accession

countries– Principal assumption is that this will end– Revert to balance between in an out

• Variant projections– High/low, but also young/old population – Zero migration scenario not greatly different

from principal

Actu a l an d p ro jec ted n e t m ig ra tio n , NI, 1966 -2031

-30

-25

-20

-15

-10

-5

0

5

10

15

1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031

'000

s

Principal

H igh

Low

Prin cip al an d selected varian t p ro jectio n s, N . Irelan d , 2006-b ased

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031

'00

0s

P rincipal

H igh P op

H igh Mig

Zero M ig

Young P op

Old P op

Low Mig

Low P op

Ireland

• Net migration– M1 and M2 assume will stay strong– Recent data suggests both are too high– Also a zero net migration assumption (M0)

• Scenarios– M1 and M2 – compare with M0– Migration accounts for bulk of growth– Five years before the next projection!

N et m igration, Ireland: Actual and assum ptions - 2006-based

-60

-40

-20

0

20

40

60

80

'000

s

Actual

M1

M2

M0

P opulation projections, Ireland, 2006-based

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

1971 1981 1991 2001 2011 2021 2031

'000

s

Actual

M 1F1

M 1F2

M 2F1

M 2F2

M 0F1

M 0F2

Sub-national projections

• Top-down – all components by area must add to national totals

• Major strength – consistent framework• But uncertainty will be greater• Internal migration

– Net flows from one area to another– Sum to zero at national level– Additional component of change– Hence more uncertainty

Northern Ireland

• 26 Local Government Districts (LGDs)• Trends

– Internal migration - Belfast losing, surrounding areas gaining

– External migration – Distinct geographical patterns– Major gainers – LGDs in East of NI and West & South

• 2006-based Assumptions– Both trends are apparent in the sub-national

projections

NI LGDs: Migration 2006, per 1,000 population

BelfastCarrickfergus

LisburnNorth Down

NewtownabbeyCastlereagh

CraigavonAntrimDownArds

BanbridgeBallymena

LarneBallymoney

StrabaneLimavadyColeraine

MoyleDerry

DungannonCookstown

Newry & MourArmagh

FermanaghMagherafelt

OmaghNI

-10 -5 0 5 10 15 20 25 30

Per 1,000 population

ExternalInternal

BelfastCarrickfergus

LisburnNorth Down

NewtownabbeyCastlereagh

CraigavonAntrimDownArds

BanbridgeBallymena

LarneBallymoney

StrabaneLimavadyColeraine

MoyleDerry

DungannonCookstown

Newry & MourArmagh

FermanaghMagherafelt

OmaghNI

-10 -5 0 5 10 15 20 25 30

Per 1,000 population

NI LGDs: Migration assumptions, 2006-2021, annual averages

N. Ireland : Popu lation g row th by reg ion , actual and p ro jected

70

80

90

100

110

120

130

Pe

r c

en

t o

f 2

00

6

B elfas t

Res t o f G rea te rB e lfas tE as t o f NI

No rth o f NI

West & S o u tho f NI

Projections show greater divergence in growth at sub-national level than historically the case

N. Ireland: Spatial Development Strategy regions: Population shares, actual and projected

45

46

47

48

49

50

51

52

53

54

55

Per

cen

t

B M A & H inte rland

R e st of N I

Extrapolation of the most recent trends also apparent from shifts in population sharesWhat are the uncertainties around that?

Ireland

• Eight Regional Authorities

• Most recent = 2002-based

• Three scenarios for internal migration– Traditional– Recent– Medium

Ireland: R egional population shares

0

5

10

15

20

25

30

35

40

1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006

Per

cen

t D ublin

R e st of G D A

R e st of S& E

B M W

Long-term trend - Stable pattern from early-1970s to mid-1990sChange from 1996 onwards – Dublin losing share.Temporary or more permanent?

Internal m igration flow s - rates per 1,000

-15.0 -10.0 -5.0 0.0 5.0 10.0 15.0

B orde r

D ublin

M id-East

M idland

M id-We st

South-East

South-We st

We st

Per 1,000 population

2006

2002

1996

Illustrates change in the pattern of internal migrationDublin and Mid-East only ‘gainers’ in 1996Dublin the major ‘loser’ in 2002 and 2006

N et m ig ratio n b y reg io n : 2002-2006, an n u al averag es

-15

-10

-5

0

5

10

15

20

25

Pe

r 1

,00

0 p

op

ula

tio

n

In terna l

Externa l

Net

In recent years, Dublin has lost population due to internal migrationBut gained most in relative terms from external migration

D ublin's population share: Actual and projected (2002-based)

20

22

24

26

28

30

32

1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021

Per

cen

t o

f S

tate Actual

Recent

Traditional

Medium

Which projection to use?

Concluding Remarks

• Value of projections– Consistent framework– Detail of the projections– Population by age and sex– Births, deaths, migration effects– Geographical patterns– Guide to what will happen in future IF the

assumptions hold good

Concluding remarks

• The turning point problem– Methodology based on extrapolation– Change the methodology? Forecasting

model? Whole new set of problems– Emphasises role of expert judgement

• Risk of over-reliance on the recent past– Apparent changes may be cyclical rather than

permanent– Need to have a coherent ‘story’

Concluding Remarks

• Uncertainty is inevitable– “Any set of projections will inevitably be proved wrong, to a

greater or lesser extent, as a projection of future demographic events or population structure” (Shaw, 2007)

– Some components more uncertain than others– How to manage that?– Understanding the assumptions – qualitative assessment and

indicators– Scenarios/variants will help to identify the key sources of

uncertainty– User can undertake sensitivity analysis– Some scenarios will be more useful than others, depending on

what user is seeking to achieve

Concluding Remarks

• Official projections are ‘trend-based’ • But some policies may have the effect of

changing the trends• Or be intended to change the trends e.g. spatial

development strategies• Need for policy based forecasts? But:

– Policy takes time to affect outcomes– Policy outcomes are themselves uncertain– Trend-based provides base for comparison – what

needs to be done to achieve a planned outcome?