Presentation

oeaw.ac.at

Presentation

Retirement Migration of the Baby Boomers

in Australia: Beach, Bush or Busted?

VID Colloquium, 22 March 2011, Vienna, Austria.

Nikola Sander

Vienna Institute of Demography, Austrian Academy of Sciences

Wittgenstein Centre for Demography and Global Human Capital


Beach, Bush or Busted?

Beach: moving from capital cities to non-metropolitan costal areas

Noosa, Sunshine Coast,

South-East Queensland

Bush: moving from capital cities to high-amenity non-metropolitan

inland areas

Western

Queensland

Southern

Tasmania

Busted: ageing in place


Regularities in the age pattern of migration

Theoretical development and empirical work done at IIASA in 1970s and 80s

Components of the model migration schedule (Rogers & Castro, 1981:12)

Migration is triggered by life course events!

new job

marriage

birth of child

tied

migrants

retirement

‘empty-nest’


Impending retirement of the baby boomers

Large cohorts of the baby boom (born 1946 – 1976) move into their

retirement years

increased pool of potential retirement migrants

• if migration rates stay constant, the

number of retirement migrants will rise

• but evidence suggests that boomers

exhibit distinctive behavior

migration intensities may change

• lower or higher migration

levels will alter service needs,

demand for health care, etc


Three fundamental issues will shape retirement migration

in the future!

1) Processes underlying continuity and change in the spatial structure

of retirement migration

2) The changing nature of the retirement transition

3) The distinctive behaviour of the baby boomer generation


1) Processes underlying continuity and change in the

spatial structure of retirement migration

• northward drift of retirees to south-east Queensland’s subtropical climate

(Burnley and Murphy, 2002; Drysdale, 1991; Hugo, 1988)

concetrated movement from Sydney and Melbourne to Noosa, Gold Coast

and Coffs Harbour

• in the UK:

shift from coastal to high-amenity inland areas

(Law and Warnes, 1982)

has a similar decentralisation occurred in Australia?


2) The changing nature of the retirement transition

• moves are triggered by life course events/ transitions (Longino et al., 2008)

• but: retirement migration is commonly studied using age-based definitions

age 60+ or 65+

assuming that retirement occurs instantaneously at age 65

• retirement transitions are often not clear-cut

• the timing of the transition varies by sex, country and over time

• survey data show that most Australians retire before age 65 (median age: 59)

retirement cannot be

tied to a specific age

calls for a life-course

approach!

Per cent retired (of all retirees)

10

9

8

7

6

5

4

3

2

1

0

46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

Age at retirement


3) The distinctive behaviour of the baby boom cohort

• in the US, large cohort size appears to have had a depressing effect on

migration intensities during the 1970s and 1980s (Pandit, 1997; Plane and Rogerson, 1987)

• little research on the effect of cohort size on mobility outside the US

do the US findings hold in other developed countries?

• differences in timing of the baby boom in the US and Australia!

United States (in 1,000,000)

4

3.5

3

2.5

2

1.5

Number of Births

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Year

Datasource: UN, 2007

2.9

2.7

2.5

2.3

2.1

1.9

1.7

1.5

Australia (in 100,000)


3) The distinctive behaviour of the baby boom cohort

• peaks in number of births was smaller and occurred later

demographic bulge created by the baby boom was much smaller!

Percentage of the population aged 15–25 years in Australia and the US, 1950–2000

20

19

Percentage aged 15-24 (%)

18

17

16

15

14

13

12

11

United

States

Australia

10

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Year


3) The distinctive behaviour of the baby boom cohort

The baby boomer generation is characterised by:

• more wealth accumulated during working years

• better health

• higher educational attainment

• a larger share of dual-earner families & single households

• higher dependence on superannuation as retirement income

• a great disparity in income levels

some boomers might be unable to fund their own retirement

(Gittens, 2004; Keister and Deeb-Sossa, 2001; Olsberg and Winters, 2005; Ozanne, 2009;

Wilson and Simson, 2006)


Aim

To explore alternative future migration trajectories of the baby

boomer generation based on a set of empirically-based scenarios.

2) Under alternative scenarios…

Research Questions

1) In which ways is retirement migration behaviour likely to change until

2036?

…what is the projected increase in the number of retirement migrants

between 2001–6 and 2031–36?

…what is the projected change in the proportion of retirees in

Australia’s regions?


Data

Cross-sectional:

Australian Internal Migration database

• derived from the census (1981, 1986, 1991, 1996, 2001, 2006)

• transition data on place-to-place migration flows

• by 5-year age groups and sex

• for six quinquennial census intervals from 1976-81 to 2001-06

• temporally consistent geography (69 regions)

allows time-series analysis and construction of synthetic cohorts

Longitudinal:

Household, Income and Labour Dynamics Australia (HILDA) survey

- household-based panel study

- 6 annual waves, conducted 2001-2006

- nationally representative sample of Australian households

- initial research population: 19,969 individuals in 7,682 households

- 3,884 persons (28% of initial sample) lost to attrition


Processes underlying

continuity and change in

the spatial structure of

retirement migration

Battery of spatial

indicators

Spatial interaction

models

Methodology

The changing nature of

the retirement

transition

Discrete-time event

history analysis in a

life-course framework

The distinctive

behaviour of the baby

boom cohort

Age-period-cohort

models

Exploring the future of

retirement migration

among the baby

boomers

Bi-regional cohortcomponent

projection

models


Results (spatial structure)

Net-migration probabilities (%)

2001-06, 55-69 year olds

-25.0 - -10.0

-9.9 - -5.0

-4.9 - 0.0

0.1 - 5.0

5.1 - 10.0

10.1 - 45.0

• no shift in movement to inland rural areas as in UK

• instead, moves further away from capitals to coastal areas

Net-migration

1976-81 (%)

Net-migration

2001-06 (%)

Change in

net-migration

Change in

out-migration

Change in

in-migration

Sunshine Coast, Queensland 42.48 12.95 -29.53 1.19 -27.18

Gold Coast, Queensland 37.32 5.56 -31.76 -1.09 -32.38

Fraser Coast, Queensland 5.46 15.28 9.82 2.96 13.78

North Coast, NSW 19.34 6.25 -13.09 3.65 -9.00

Mid-North Coast, NSW 23.45 10.19 -13.26 1.31 -11.28

Gippsland, Victoria 5.16 8.52 3.36 -0.62 4.09

Southern Tasmania -6.83 10.10 16.93 -1.61 16.00


Results (spatial structure)

Destination-specific distance decay

effects, aged 55-69, 2006

-3.30 - -2.00

-1.99 - -1.50

-1.49 - -1.00

-0.99 - -0.50

-0.49 - 0.00

Spatial interaction model parameters, Poisson distribution

aged 55-69 years all ages

1981 2006 1981 2006

Variable Coef. Coef. Coef. Coef.

ln(Origin population) 0.759 0.669 0.635 0.599

ln(Destination population) 0.498 0.388 0.558 0.522

ln(Distance in km) -0.614 -0.497 -0.554 -0.529

Deviance 176,458 220,519 1,371,868 1,286,502

No. of observations 4,692 4,692 4,692 4,692

McFadden's Adj R-squared 0.79 0.78 0.85 0.86


Results (retirement transition)

Discrete-time complementary log-log model of HILDA respondents who

retired AND moved during survey period (-> risk of moving around retirement)

Baseline hazard, full sample, by distance moved

retirement triggers migration, especially longer-distance

triggering effect is highest in year of retirement, but weakens with ret. age


Results (retirement transition)

Adding covariates: hazard ratios, longer-distance moves

dual-earner couples, with health problems (husband), high income, early retirement

Partner not in labour force

Partner None

Partner also retired

Partner in labour force

Retiree good health

Retiree bad health

Spouse good health

Spouse bad health

Retiree high school

Retiree post-secondary

Retiree postgraduate

Spouse high school

Spouse post-secondary

Spouse postgraduate

Home renter

Home owner

High household income

Low household income

Retirement age at or above 60

Retirement age below 60

p > .05

*p ≤ .05

0.5 1.0 1.5 2.0 2.5 3.0


1901-06

1906-11

1911-16

1916-21

1921-26

1926-31

1931-36

1936-41

1941-46

1946-51

1951-56

1956-61

1961-66

1966-71

1971-76

1976-81

1981-86

1986-91

1991-96

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Cohort

Incidence Rate Ratio

Incidence Rate Ratio

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75+

Results (APC-effects)

Used negative binomial APC model

with dummies for age groups,

periods and cohorts to disentangle

APC-effects on migration intensity.

splitted migrant counts in older

and younger APC-spaces to avoid

linear dependency

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Age

1976-81

1981-86

1986-91

1991-96

1996-01

Incidence Rate Ratio

Period


Results (summary)

Retirement migration behaviour is likely to change in 3 ways upon

retirement of the baby boomers:

1. in terms of the timing of migration (left- or rightward shift of retirement

peak)

2. with respect to the intensity of migration (height of the retirement peak)

3. in terms of destination choices (concentrated or dispersed flows)

Projection Assumptions

Internal migration: 2001–06 transition rates change along 3 dimensions.

International migration: Immigration remains constant at 817,220 persons,

emigration at 458,989 persons (region’s shares of immigrants from census)

Fertility: Region-specific TFR converges to 1.8 until 2036.

Mortality: Life expectancy at birth rises to 88.4 (females) and 85.2 (males).

Region-specific SMRs remain constant over time.


Internal Migration - Scenarios

Boomers wil be either better off or worse off in retirement than their parents!

• better health

• more wealth

• more flexible pension schemes

• loosening of intergenerational

relationships

can afford a move to the

traditional coastal retirement

destinations along the east coast

• insufficient retirement savings

• altered family relationships

• higher divorce rates

• work beyond retirement age

can only afford to move to nonmetropolitan

WA, SA and

Tasmania (more affordable

housing and lower living costs)

Timing

Intensity

Pattern

retirement peak shifts left

higher intensity

concentrated flows to east coast

reversal of recent trend

retirement peak shifts right

lower intensity

dispersed flows

intensification of recent trend


Internal Migration - Scenarios

SCENARIO

Baby Boomers are Baby Boomers are

Baseline

Dimension

Better Off Worse Off

Timing 2001-06 Peak shifts left Peak shifts right

Intensity 2001-06 Higher intensity Lower intensity

Pattern 2001-06 Reversal Intensification

% change in in-migration,

2011-16

% change in in-migration, 2011

-300 to -50

-49 to -20

-19 to 0

1 to 20

21 to 50

51 to 90


Bi-regional cohort-component projection model

• includes migration flows between regions

• is a form of spatial aggregation of the multi-regional model (Rogers, 1995)

• migration is modelled between and the

• run as a series of bi-regional models (number of regions – 1)

migration is a function of origin population size & age structure

by relating flows to the correct Population At Risk of moving (PAR)

age profiles of flows easier to smooth than net-migration (model schedule)

flows are easier to trend into future than in-migration shares in pool model


Projection Results – migrant numbers

The system-wide number of retirement migrants is projected to:

• increase under the ‘Baseline’ and the ‘Better Off’ scenario

• decline under the ‘Worse Off’ scenario

Number of migrants

600,000

500,000

400,000

300,000

200,000

100,000

0

1976-81

2001-06

2006-11

+128

+52%

-17%

2011-16

2016-21

Period

2021-26

2026-31

2031-36

Better Off

Baseline

Worse Off


Projection Results – retiree population size

Under ‘Better Off’ scenario, the size of the retirement-aged population will:

• increase in coastal NSW and SE Queensland

• decrease in inner districts of capital cities

small differences in retiree population growth between alternative scenarios!

SE Queensland & NSW Coast

Melbourne Outer

Southern NSW & Inland Victoria

Sydney Outer

Sydney Inner

Inland NSW & Queensland

Brisbane Inner

Melbourne Inner

Brisbane Outer

observed (2006)

Baseline (2036)

Better Off (2036)

Worse Off (2036)

Perth Outer

0 200 400 600 800

Population aged 55-69 years (in thousands)


Projection Results – retiree population size

• shifts in the retirement peak (timing) have little impact

• changes in migration intensity have little impact

• changes in migration patterns have a stronger impact

Shift left (2036) Shift right (2036)

Reversal (2036) Intensification (2036)

0 200 400 600 800

Population aged 55-69 years (in thousands)

0 200 400 600 800

Population aged 55-69 years (in thousands)


Projection Results – population age structure

Strong differences between scenarios in projected impact on regional population age structure.

Observed, 2006 Baseline, 2036

31.7 years 37.8 years

Better off, 2036 Worse off, 2036


Conclusion

Changes in the intensity of retirement migration and shifts in retirement age are

likely to have little impact on regional population age structures

since inflows and outflows were projected to increase or decrease by equal

increments

But changes in the spatial patterns of retirement migration could significantly

reshape the pace of population ageing in key destinations.

Retirement migration is projected to have little impact on retiree population

growth, but a strong effect on the median age of populations in destination regions

Australia

Inner Sydney

SE Queensland & Northern NSW

No migration scenario: 40.6 (Australia); 44.9 (Inner Sydney); 39.9 (SEQ & NSW)

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