Population aging is often cited as a major economic challenge for the developed world. But a new report from the McKinsey Global Institute (MGI) shows that shifting demographics pose an even greater threat to the growth prospects of many emerging economies.
Over the last 50 years, the world’s 1.6% annual population growth fueled a surging labor force and a rapid increase in GDP in many emerging economies. Employment more than doubled in China and South Africa, and at least tripled in Brazil, India, Indonesia, Mexico, and Nigeria. In Saudi Arabia, employment increased almost nine-fold.
But, with population growth slowing, average annual employment growth in emerging economies is expected to drop from 1.9% to 0.4%. In absolute terms, the decline will exceed that of developed economies, where annual employment growth is expected to fall from 0.9% to 0.1% the coming years. In most economies, employment is expected to reach its peak within the next half-century; in China, the labor force could shrink by 20% over this period.
Chosen excerpts by Job Market Monitor. Read the whole story at Emerging economies’ demographic challenge | McKinsey Global Institute | McKinsey & Company.
Gillian B. White: You spent a lot of time researching the labor force and changing demographics around the world, in your opinion how prepared is the U.S. for the shift to an older population? Joseph M. Coleman: There are good things and bad things. We have a very dynamic economy, we’re able to react to … Continue reading
The euro zone’s number one economy will need an army of immigrants to keep its economy going, a Bertelsmann study showed on Friday. Europe’s powerhouse needs some 500,000 immigrants each year in order to stabilize its labor force and social welfare system until 2050, the newest study from think-tank Bertelsmann showed on Friday. The study … Continue reading
Japan is the world’s oldest country—25 percent of its people are aged 65 or over. By 2040, that ratio is estimated to rise to the historically unprecedented level of 36 percent. The population of Japan nearly tripled in the 20th century, peaking at 128 million in 2010. But with a falling birth rate, one of … Continue reading
Global economic growth is under threat because populations are aging, shrinking the size of the pool of people able to work. The only answer to the growth question in an era of dramatic demographic change is productivity growth. If historical rates of productivity growth were to remain constant, global GDP growth would be 40 percent … Continue reading
“Here is the biggest problem we face,” the senior official from Chancellor Angela Merkel’s government told me as he pulled out a pen and drew a pie-graph circle on his napkin. “This is the working-age population of Germany – 45 million people.” Then he drew a thick slice, almost a sixth of the circle: “This … Continue reading
The world is aging, and that matters for growth. In the past, an abundant and growing labor pool was a powerful engine of the world economy; today, the number of workers is starting to decline in many countries. This leaves no alternative but for companies, individuals, and governments to work in smarter ways. In an … Continue reading
In this paper, we addressed the important question of how selected areas of life will be affected as populations grow older and smaller. We used the case of Germany, a country that is at a relatively advanced stage of the demographic transition, to study the potential long-run implications of population aging. In the decades prior … Continue reading
Canada – Aging population could have a positive effect on the labour market outcomes of youth research finds
Post-recession it is common to hear concerns that youth, facing high unemployment rates, are unable to find good job opportunities. Historically, youth have experienced higher unemployment rates than older workers. In the context of an aging workforce dominated by the baby boom generation and delayed retirement, there appears a general concern that older workers are … Continue reading