Population projection

Overall population movements, such as those mentioned above, cover a considerable amount of variation across the underlying characteristics of the population. For example, immigration and emigration propensities are typically higher amongst individuals in their early to mid-20s, western immigrants have a higher tendency to emigrate than non-western immigrants and women have lower mortality rates than men in the same age groups.

There is a considerable uncertainty associated with the forecast of these population movements. This is obvious in the estimates of the number of future immigrants. This is attributable to the fact that immigration is largely controlled by policy and subject to developments in international conditions, both of which are hard to estimate and forecast. The abnormal numbers for immigration in 2015 are an example of the difficulties surrounding migration forecasting. The number of births also varies from year to year and highlights another source of challenge when estimating population. Developments in mortality rates have been relatively stable for a number of years, however, it is nevertheless possible to underestimate the actual mortality, especially in the case of extraordinary circumstances such as disease epidemics and extreme climatic conditions.

The forecast provides estimates for the difference between people inside and outside of working age, a factor crucial to assessing the fiscal challenges that future generations can expect to face. The overall pattern observed in the forecast is one that shows a decreasing proportion of the population within the working age.

These models utilise the forecasted demographics to further forecast the population by highest completed education, labour market status and more. In particular, the socioeconomic forecast employs the forecasted changes to the mortality rate and life expectancy to evaluate the effect of a reform-driven increase in retirement-age which was initiated in 2011 by the retirement reform.

The population projection informs DREAM’s microsimulation model SMILE with overall demographic changes.

The model is also used to evaluate changes in the size of the population in relation to changes in demographics such as immigration, fertility, and mortality; the consequences of which can then be evaluated in socioeconomic forecasts and our economic models.

Statistics Denmark constructs a population forecast by evaluating population developments in Denmark’s 98 municipalities.

Since 2010, DREAM has collaborated with Statistics Denmark to develop the official population forecast for Denmark. Prior to this, DST developed both the regional as well as the national population forecasts. The result of the unification of forecasts not only removed confusion, but also allowed for more fruitful collaboration with other research institutes, especially in the Nordic countries. DST has maintained their role in estimating the regional population forecasts in Denmark.

The population forecast is continuously being developed. In 2018 it became possible to identify the children of descendants of immigrants in the model and recently the numbers of immigrants have become nuanced with the reason for residence. The latter allows for further description and variation in education behaviour and labour market status.

Demographic changes are distributed by the same dimensions and are typically determined by the product of a probability and a so-called risk group. For example, the number of deaths in a given year is given by the probability of death multiplied by the number of people at the start of the year. 

The probabilities are both assumed to be constant assumed to vary over the forecast period. Immigration and emigration probabilities are assumed constant, whereas mortality and fertility rates are dynamic. Whether they are constant or not, all probabilities are based on historical evidence and trends.