Demographic forecasting: 1980 to 2005 in review

Approaches and developments in demographic and population forecasting since 1980 are reviewed. Three approaches to forecasting demographic processes are extrapolation, expectation (individual-level birth expectations or population-level opinions of experts), and theory-based structural modelling involving exogenous variables. Models include 0-3 factors (age, period and cohort). Decomposition and disaggregation are also used in multistate models, including macrosimulation and microsimulation. Forecasting demographic change is difficult; accuracy depends on the particular situation or trends, but it is not clear when a method will perform best. Estimates of uncertainty (model-based ex ante error, expert-opinion-based ex ante error, and ex post error) differ; uncertainty estimation is highly uncertain. Probabilistic population forecasts are based on stochastic population renewal or random scenarios. The approaches to population forecasting, demographic process forecasting and error estimation are closely linked. Complementary methods that combine approaches are increasingly employed. The paper summarises developments, assesses progress and considers the future.