"Nine Months Per Year" | Episode One

00:00:00: Dan: My name's Daniel Stern. You might know me as the co-host of Radio Spaetkauf. It's a Berlin News and English podcast, for which I've earned some regional notoriety or you know, you may be familiar with my 1986 appearance in a local newspaper advertisement for a shopping mall in Western Massachusetts when I was six years old. Basically I'm a standup comedian who used to work in a pizza shop, but right now I'm walking through Berlin's Mitte district on my way to the offices of something called the FutureRes Project, and they've hired me to make a podcast about demographics. I'm familiar with the notion of demographics as it's used by advertisers and, pop culture critics. Something like “the film did well with the 18 to 35 demo” or think pieces, you know, on millennials relationship to the avocado, or I guess that song by The Who ‘Talking bout my generation…” It turns out I'll discover that demography is as serious as it gets. At its core, a literal matter of life and death. And I end up, well, I think anyone would end up contemplating the course of your life from a broader perspective and really end up looking at all of us, how we're all living, and how we're going to be living.

00:01:21: So. This podcast, it's my conversations with some amazing researchers and scientists. It's a journey through living and dying with the people studying the data created by our births and our deaths.

00:01:45: This is episode one of “Certain Futures.”

00:02:01: You are jumping in with me as I enter the building, which houses the Berlin Office of the FutuRes project and walk past the security guard acting like I know what I'm doing and head up to the office where I'll meet with Kate and Peter to admit that I really don't know what I'm doing, they're friendly and, and pretty sweet and do a great job of introducing me to this world of demography and a looming crisis of a continent, which is aging rapidly.

00:02:40: Dan: So like, what's this podcast? Uh, what do you want it to be about?

00:02:47: Kate: Well, we work with a lot of scientists, specifically demographers and economists, who are doing all sorts of analysis, working with the newest data and so on.

00:02:58: Peter: Yeah, we love science. But it happens on a different timeline than the rest of us. So if we're talking about these demographic topics, all of the demographers are saying, “We've been saying these things for 30 years, why are people still asking us the basic questions?” Well, people are asking the basic questions because it's tough, because it's, it's complicated.

00:03:22: Kate: Demographers have been sounding. The alarms for some time to say, okay, look, your population is going to be a lot older and therefore maybe you should start to plan for that.

00:03:33: Dan: And, this is the part where Kate and Peter generously hand me a digital stack of dense scientific research papers and reports. And I get into it and… okay, here's something you should know: the cost of an aging society in the EU. We're talking pensions, healthcare, long-term care, education. Okay? These costs are 24.4% of the EU’s GDP and in pensions, the public pensions, they're an average of 11.4% of that GDP. I discover all sorts of fascinating things.

00:04:08: Like, according to Eurostat, the median age in Europe is 44.7, and that coincidentally is my very age, which, you know, it makes me wonder, if I'm half dead. I'm not, because doubling my age would get me to almost 90, and it turns out that's not how medians work. So. The actual calculations of my life expectancy gives me about 35 years left to go. So I won't be 90, but 80. So I quickly went from thinking I have half a life left to live to realizing I, well, I can't divide 35 into 80. I'll leave that for the mathematicians on this podcast,

00:04:58: Jakub: Hello, my name is Jakub Bijak. I work at the University of Southampton in the UK as a professor of statistical demography, and my particular focus is on migration.

00:05:07: Dan: Can you tell me when I'm gonna die?

00:05:10: Jakub: I cannot tell you when you're gonna die, but I can tell you with some good degree of accuracy. What are the average lifespan left for a person of your age? Your sex? Your ethnic group in some cases. This is actually how, how demography started in the 17th century, looking at mortality, looking at the patterns of, human death. So we, got quite good at putting numbers on the measures like life expectancy; so remaining future lifespan. But this is not for an individual. This is always for a population or a subgroup of a population. It doesn't work at an individual level.

00:05:53: Dan: So everything I know about, demography is basically based on a couple of movies or books that were not made by scientists. There's a line in fight club where he's an insurance adjuster and he is like, “given a long enough span of time, everyone's chance of survival approaches zero.” Which is, you know, a nice way to say we're all gonna die.

00:06:10: Jakub: You mentioned insurance, right? So, so this is something where actually the very first life tables, 17th century life tables by Edmond Halley, the same guy who actually, you know, after whom the Halley Comet is named. So, his very first life table appeared in the year 1693. And, his work had actuarial applications. So, this was for calculating annuities; a life insurance product. So it was already, a very strong link between demography as an academic discipline emerging at the time and money and, insurance. And, over time, I think demography, we were quite successful, in terms of finding demand for our work because there is demand for knowing how many people will be there or how many events of different kinds. I mean, we talked about mortality, but there can be other events that may be of interest to the retail sector or, you know, to the city planners, or to the pension planners.

00:07:21: Jakub: The nice thing about demography is that there is an evolution of demography over the three and a half centuries of its existence. We haven't been discarding previous methods and previous approaches, but rather building up on them and adding new perspectives. At the beginning it was all about snapshots. At certain points in time. Then came the population censuses which proliferated in late 18th century, early 19th century. Every decade there was a census, people would be counted, but at some point this wasn't enough any longer. Where demography moved on from there ‘was how do populations change over time, along the individual life courses?’ So it was a shift for of perspective from just looking at, okay, here is a snapshot of what we see at any particular moment to what do we observe if we trace groups of people along the lives for longer periods.

00:08:24: Dan: As we look to the future and we've got like an aging population, is migration the solution?

00:08:28: Jakub: Oh, I think, no single thing in isolation will solve the challenges.

00:08:35: Dan: What does that mean?

00:08:36: Jakub: It means that, that the fundamentals of population aging, of the shifting age structure of the population are largely driven by fertility changes. To some extent by mortality and migration comes as a tinkering around the edges. Because there is an age profile, an archetypal age profile of migration, which means that people are most likely to move in their twenties, slightly less so in the thirties.

00:09:03: Dan: It seems like getting people in their twenties is a bargain, right?

00:09:08: Jakub: Because that's, that's the labor force, right?

00:09:10: Dan: Well, yeah, or I mean, I was just thinking like babies, you don't really contribute economically. They seem like a drain. I mean, in the short term, in the long term, I, you know-

00:09:21: Jakub: So here is a twist, right? So why is it not a solution, if migrants come when they're young? Why is it not a long term solution to the aging challenges? Because they will themselves age, right? So it turns out, the numbers of quote unquote migrants who would be needed are so absurdly high that, this remains a very hypothetical, a very hypothetical, calculation. So it's an academic exercise. It's not as serious long term policy option. Right. Of course, migrants feel shortages on the labor market in the short term. Absolutely, yes. They maintain the population size and the labor force size. Absolutely. Yes. We see it across Europe; most of the countries, if not for migration, for positive net migration, would be probably already in, or heading towards decline in the population size.

00:10:18: Dan: Yeah, it's, I mean, it was interesting, reading your work on migration behavior and how you sort of identify, there's a lot of problems with your data.

00:10:28: Jakub: Yes. It's the type of demographic process that, has the highest levels of unpredictability, of uncertainty, of errors. And these errors come from different places, one of which is the measurement of the data. And even behind this, there is the definition, there is the concept of, ‘who is a migrant? And I'll give you a very nice example of that. Because before the second World War most of Europe wasn't concerned with immigration, with people coming from elsewhere. The main concern was about possibly too many people leaving Europe to move to ‘The New World’ as it was called, so the focus of data collection was very much in many countries was on emigration.

00:11:16: Jakub: Now we are living in a sort of, completely different reality where the political focus is very much on immigration, on people who come, and emigration, people who leave, is an afterthought.

00:11:29: Dan: And it was an introduction to, your paper you said like, ‘It's important to note that everyday language tends to obscure what we really want to do’. and an example is words like the weather. Right?

00:11:40: Jakub: You know, everyone understands what a weather is, so we think. So, weather; do we mean precipitation? Do we mean wind speed? Do we mean temperature? Right? And the same with migrants, but at the same time, if we want to measure it, we have to define it somehow. And the Interesting thing is that I would argue that, especially in migration, you can clearly see how the data, what is being measured, is very much a social and a political construct.

00:12:12: Jakub: The weather is multi-dimensional and so are people's decisions to migrate. I think the greatest, one of the greatest achievements of, migration scholarship in the recent years has been a recognition that there are no simple drivers of migration, that they operate together.

00:12:43: Jakub: So something that I really like about demography is that if you take the demographic perspective, you realize that different groups of people, so you know, young people, older people, working age people, retirees; are not some different species, are not just different groups of people, but it's the same people. It's us. Right? At different stages of our lives. It's us going through time. It's us going through our life courses, and if we adopt that perspective, I think it helps also not only understand things better, but also connection between the generations. So, you know, there is this sort of tendency to pitch some generations against the others. But if, if you realize that actually, you know, this is the same people, this is the same ‘Us’ living through our lives, only at different stages. You know, this generation is maybe 20 years ahead of me. This generation may be 20 years behind me. But ultimately, you know, we are all sort of going through our lives, along these cohort lines as we would have it in demography. I think it's a remarkable observation.

00:13:50: Dan: I was curious what cohort I was because, born in 1980 there was some debate always like, am I a millennial? Am, I Gen X? And there was a brief period of time when I was around 12 or 13 that we were called Gen Y and for whatever reason, that just didn't stick. And what I uncovered is that, the term I should refer to myself with is a ‘geriatric millennial’, and that's not great. But you know what, it's not about where any one of us is in our life course or what we label it. Right? It feels like there's a dichotomy here. Jakub's encouraging us to see ourselves as part of a life course that we all have in common, but we are individuals, and I'm not sure how to reconcile that. Which, leads to our next conversation.

00:14:40: Alexia: My name is Alexia Fürnkranz-Prskawetz. I'm professor in mathematical economics at the Vienna University of Technology, and I'm also research group leader of Economic demography at the Vienna Institute of Demography, which is part of the Austrian Academy of Sciences.

00:15:00: Miguel: My name is Miguel Sánchez-Romero. I am a senior researcher, at the Technical University of Vienna, and also at the Vienna Institute of Demography. And my main focus is on the intersection between economics and demography.

00:15:16: Dan: We're gonna talk about the fact that both I and Europe, seem to be aging. I am forty-four point seven years old, give or take. So I wanna start by asking if I'm middle aged and if Europe as well is also middle aged>

00:15:32: Miguel: Yeah, the age of the population, now tis around, 42, 44 years. So yeah, exactly. You are exactly in the middle. But I will not be so worried about your life expectancy that you have, read today because these are always based on the mortality experience of nowadays.So in principle, if mortality continues to decline, as in all past decades, your life expectancy will be longer actually.

00:16:07: Dan: Ah, okay, that's fantastic. But for me, the stress of being middle aged isn't so much about when I might die, but retirement and have I put enough away and what's it gonna be like to be old? Which I, of course at 44, I'm still young. Is this also a concern for Europe in general?

00:16:28: Alexia: So let me also add maybe to the previous question, just one point. You are not really getting older by one year. Every year you're getting older, maybe only by nine months because we are gaining in life expectancy. So you're gaining a couple of months each year and this is something our economists should also know and should take advantage of. And in terms of your other question, the retirement; indeed, I think, the current system, how it is in most industrialized countries where the current working age population pays for those who are in retirement will become really difficult to sustain in a fiscal sense. So basically what everyone knows in science, we need to reform our pension systems and generally our social security systems. And I do believe also the policy makers know about this, but there's always the problem. How much can they sell to the public?

00:17:24: Dan: So I am getting older more slowly, does that not help with my savings or with Europe's savings for retirement?

00:17:33: Alexia: So maybe as a quick answer indeed, but we are not taking advantage of it because we are always used to these fixed age limits. We have like age 60 or age 65, of retirement. But we are not taking into account that age 60 today means something very different as age 60, 10 years ago. But what a nice question would be in fact, asking why we need models. I mean, to understand how aging affects our economy, how aging affects our social security systems. Why do we need such models? The Future will be something very different from the past. So we cannot just extrapolate from the past if we want to understand our future. We are living in a world, which is very different to the past. In terms of its demographic background. We have very different family structures, different fertility, different longevity, et cetera. But we have also very different economic situation, very different institutional setups.

00:18:38: Alexia: So this is where we are asking, or we are arguing that we are need a model, a model that in a sense can replicate the past, but can be used also to project the future. And the key cornerstone to do this is to build up models that include behavioral changes at the individual level. This means from the time when they're born until they die. And you can imagine, that these life cycles, really in a sense replicate now how people choose their consumption, choose their education, choose their labor force. So, they are really behaviorally reacting to different economic situations. And then we put this heterogeneous life cycles into a macroeconomic model, to react to changes and allowing heterogeneous behavioral reactions because individuals are heterogeneous. This allows us to use our model then to also project, or at least, give some future scenarios for policy advice.

00:19:49: Dan: And heterogeneous households kind of just means households, right? Like as they exist in real life. Is that right?

00:19:56: Miguel: It means that we have many different households and they differ based on their characteristics. Some households they can have, our children, other household have no children.

00:20:09: Dan: Right.

00:20:10: Alexia: And this is our key message, Because often in economics, and even in demography, we model a representative household, the average household, and then see how the average household is doing in terms of its welfare, in terms of its social security benefits, et cetera. And what we are arguing. It’s the wrong way to look at it because we need to understand how different household types are affected by different reforms. How different households are really doing in reality. Because we do have a huge increasing inequality; for example, life expectancy. I mean, the higher educated are living several years longer as the lower educated. But we have also a lot of differences between family structures, and in our model, we can see how these different types of households are affected by different reforms.

00:21:05: Dan: That's amazing.

00:21:05: Alexia: And I think, uh, I mean, for me it's so important because the point is this why the acceptance of pension reforms is so low in the public, because it's always, communicated as if everyone is getting the same kind of pension reform.And I think this is really something where we really need to be very, very careful. There's no kind of policy that fits all households. So there needs to be heterogeneity also in the reforms. And this is our key message,.

00:21:35: Dan: Alright, well, if I'm willing to admit that I'm aging, and I am willing to admit it, I think the continent of Europe can probably do that as well. I'm an independent artist, so I definitely have some thinking to do about how resilient my plans for aging are. Europe is kind of in the same boat. Jakub showed us a path from the very first life table to the creation of the census, and then on to creating statistically representative people that we examine. And now people like Alexia and Miguel, they're developing new tools which move us beyond thinking about an average person or a typical household. My hope is that if we are able to see how policy or reforms or new ideas affect all of us in unique ways, we're going to start making better decisions, decisions that have more positive outcomes for more people, and not just that. We'll start seeing these better outcomes extending further into the future, further into all of our futures.

00:22:51: On the next episode of Certain Futures, I'm traveling to a country with a higher median age, which will therefore make me younger. Statistically. We're headed to Italy. In episode two we go to Milan, and I'll be talking with some people on the streets.

00:23:08: Paolo: my name is Paolo. I'm Italian, we are in Milan, and we live in Milan and we are very very happy to live in a shit city.

00:23:25: Dan: And I'll also be chatting with experts there at the University of Bocconi.

00:23:30: Letizia: I think that people shouldn't be scared about, numbers. Numbers are simply the description of who we are. And they're not cold, numbers are not cold because with the numbers you can see people. You can see through the numbers and arrive to people and you can look at the numbers and then go around and find people. And this is what I like. and I think that humanity is beautiful, but it's also in danger.

00:24:00: Dan: Humanity is beautiful, but it's also?

00:24:02: Letizia: In danger.

00:24:03: Dan: In danger. Okay.

00:24:05: I am Daniel Stern, and this has been episode One of Certain Futures. This podcast was produced by Radio Spaetkauf in cooperation with the EU funded research project, FutuRes ‘Towards a resilient future of Europe’. You'll find plenty of information and links in our show notes. And please subscribe to the podcast.You don't wanna miss episode two or episode three or four. Thank you to Jakub and Alexia and Miguel. We had wonderful conversations and you were incredibly patient with me. One last thing, when I heard a recording of myself pronouncing the title of Alexia and Miguel's work, it wasn't pretty. So I asked Lani from our music team to take that title and transform it into something a little more beautiful that I think reflects the beauty of your work. Thank you everyone for listening.