‘Bleak labour future for S’pore as population ages rapidly’
SINGAPORE: While Japan had the biggest slump in its workforce in Asia over the last 10 years, Singapore has the most to fear from an ageing population over the next two decades.
The city state will face a double whammy: a shrinking workforce and slower progress than Asian neighbours in getting more people into the labour market.
According to a new study from Oxford Economics, Singapore’s labour supply — after accounting for changes to the participation rate — will shrink by 1.7 percentage points in the 10 years through 2026 and by 2.5 percentage points in the decade after that.
That’s the worst of a dozen economies in a report by Louis Kuijs, the head of Asia economics at Oxford.
Almost all Asian nations will face demographic challenges over the next two decades, and efforts to boost labour participation rates — for example, by drawing more women into the workforce and raising the retirement age — will only marginally limit the negative impact.
In Singapore, immigration restrictions can partly explain an expected drop in working age population growth from 2027.
South Korea and Taiwan also will be hard hit by declining labour supply in the decades to come, while for some countries, the pain is only delayed: Thailand’s workforce will barely decrease over the next 10 years, but should see a 1.1 percentage point yearly drop in the decade thereafter.
The grim rule of thumb for the region: A one-percentage-point decline in labour supply in any of these areas would shave off a half-point to two-thirds of a percentage point in gross domestic product growth.
While Southeast Asian countries like the Philippines and Indonesia were still benefiting from younger and growing populations, they would need to do more to boost productivity over time, focusing on economic integration and technology, said Chris Humphrey, executive director of the EU-Asean Business Council. Bloomberg