Trends in fertility and mortality have resulted in an increasing excess of deaths over birth since 2015/16 in Wales. The Total Fertility Rate in Wales fell below the replacement rate (of 2.1) in 1974 and has remained there since, standing at just 1.5 births per woman in 2021.
Based on past trends, the Welsh population is projected to have a growing share of the elderly, a slowly decreasing share of working-age people, and a decreasing share of the young. There is a real risk of population decline, especially among the younger and working age populations, and especially if in-migration falls.
These trends, if they continue, could have significant economic implications for Wales, including changes in the demand for goods and services, such as public services, a shrinking labour force, a smaller tax base, and reduced block grant from the UK Treasury.
The trend of population ageing and risk of population decline are not unique to Wales. Many countries, such as Italy and famously Japan, have already begun experimenting with a range of policies to respond to these trends.
The Welsh Government commissioned the Wales Centre for Public Policy (WCPP) to conduct a review and synthesis of the best available evidence on how other countries are responding to the fiscal challenges of population ageing and decline, particularly in terms of policy approaches to maintaining and increasing the size of the young and working-age populations. This project focuses on three key responses to potential population ageing and population decline:
In September 2023, a roundtable was held on behalf of Welsh Government officials and academic and policy experts to provide an opportunity to discuss how learning from elsewhere could be applied in Wales in relation to these responses, what could be done where policy is reserved, as well as where there might be opportunities for innovation in policy and practice.
Learnings from the international evidence review and the roundtable have been combined as a final report, accompanying policy briefing along with expert think pieces.