Predictions of Malaysia Age-Specific Fertility Rates using the Lee-Carter and the Functional Data Approaches

Abstract

Global fertility has been experiencing a significant decline, reaching towards the replacement ratio. This trend, coupled with increasing life expectancies, has led to the emergence of an ageing population. In this study, we delve into an analysis of fertility patterns among Malaysian women, considering both their childbearing age and ethnic groups. A comprehensive 63-year fertility dataset, from 1958 to 2020, were obtained from the Department of Statistics Malaysia.  These data were fitted into the Lee-Carter model and its modified version, which is the functional data model. The models were evaluated using the out-sample forecast error measures. Results indicate that the third-order functional data model able to capture most of variation present in the actual data, consequently outperforming the Lee-Carter model in forecasting fertility rates among Chinese and Indian populations. The 20-year forecasts reveal a noteworthy shift in maternal ages of the highest births to older ages suggesting a trend towards delayed pregnancies among women. It is predicted that the Malay total fertility rates will likely fall to below the replacement level reaching 1.71 in 2040 whereas Chinese and Indian total fertility rates will substantially decrease to the lowest level in history below 1.0 which are 0.54 and 0.70 respectively. The evolution in Malaysian fertility rates is an alarming fact as, together with low mortality rates, it may impact the Malaysian population structure in future. Proactive policy measures are urgently needed to address these demographic shifts.