Indicators to reflect an ageing population in Singapore

The Total Dependency Ratio

Life expectancy at birth & infant mortality rate per 1000
live-births
Median age of the population

Indicators to reflect an ageing population in Singapore

Total fertility rate of women (TFR)
Growth rate of population of a certain period of time
Old-age support ratio

Ageing population: A problem

Labor supply
Ex: Chinas shortage of labor
Capital accumulation
Life cycle hypothesis:
1 % rise in elderly dependence ratio reduction of
1.5% of GDP
Factor productivity

Not so much a problem

Labor supply
Higher productivity level of the young people
Capital accumulation
Forward-looking behavior to put save more for old age
Factor productivity
Senior workers have more experience

Situation in Singapore
-Median age of the population: 39.3
-Total Fertility rate : in 2012 1.29, in 2013 1.19
-Old age support ratio:
in 1970 13.5
in 2014 6.
-The Total Dependency Ratio: 36.1
-Life expectancy at birth & infant mortality rate per 1000 live-births
in 2009-2013: 2
-Growth rate of population in 2013: 1.6%

Predicted Situation in
Singapore
2005
1 in 12
residents
was 65
years or
older

2030
1 in 5
residents
will be 65
years or
older.

Causes of Aging Population

Post-war baby boom
Declining birth rates
Higher Life Expectancy

Implications of Aging
Population
Fiscal challenge: increasing tax
burden on our working-age population.
Hollowing out effect
Increased demand for healthcare and
social services.

How will it affect Singapores

economy?
-According to Moodys Investors Service, Rapid aging in
Singapore could halt economic growth by 2030.
-Estimates show that aging will reduce aggregate annual
economic growth by 0.4 percentage point in 2014-19 and by a
much larger 0.9 percentage point in 2020-25,

Is it all bleak?
-Singapore has a strong fiscal and
government debt metrics Lessen the
effect of increased government spending.
-Higher consumer spending among the
aging population
-More market opportunities generated by
the aging population

Policies
1) Increase retirement age beyond 62
) human resources most important competitive advantage in Singapore
) tripartite partners - aim to boost employment of older workers and change the perceptions and mindsets
of employees and public
- Re-employment Ready campaign
- WorkPro
) Effectiveness:
- the employment rate of older Singapore residents has increased over the years to reach 64.0% in
2012.
- more than three-quarters of the companies in the WorkPro scheme have applied for age management
grants

Policies
2) Complement the resident workforce with foreign workers
) can help to maintain Singapores growth potential at a healthy level and provide greater economic
resilience to the country
) the supply of resident healthcare manpower will be insufficient to meet the sharp rise in manpower
demand
) local manpower supply for the built environment sector is tight
) Effectiveness:
- enables businesses to expand quickly and flexibly during economic booms
- contributes to the GDP growth in Singapore - 5% per year in the last decade
But,- too many foreign workers will depress wages and reduce productivity

Comparison: Sweden
-Effects of an aging population in a welfare state

The aging population in Sweden:

-18% are above 65 years old.
-Expected to be 30% by 2030

Fertility rate and female participation in the work force

- Sweden: high level of working women and relatively higher fertility rate than
other OECD countries, possibly a result of generous benefit system.

Public funded eldercare vs. privately funded.

-Sweden: problems in how to finance health- and eldercare with increasing beneficiaries
relative to

Lessons from both systems

Potential Solutions
Technological Aids for Elderly & Eldercare
Decrease Eligibility for Care
Increased Female Participation Rate
Selective Immigration
Education Reforms
Dedicated Office of Elderly Care
More Robust CPF System