Contributed by EUNICE LI DAN YUE –
Implications Of An Ageing Population
Due to our ageing population, greater longevity must translate into more years at work instead of retirement (“Economic impact of ageing population”; Forum Online, Straits Times, Oct 23).
Why are most Singaporeans currently working past their retirement age?
Currently, the statutory retirement age is 62, but most Singaporeans work until they are 67 or 70 or beyond.
This is primarily due to the fact that with the costs of living climbing, especially healthcare costs, fewer of us can afford to stop working. Working beyond the traditional retirement age has become a necessity and is no longer a choice.
Otherwise, many Singaporeans face the very real prospect of their savings running dry almost halfway through retirement.
Delaying retirement is often viewed as the surest route to financial security in old age. By working longer and earning more, older workers can boost savings and shrink the period that their retirement savings must fund.
Benefits of working past retirement age
Employment at older ages also expands the nation’s labour pool, accelerating productivity, increasing national income, and raising living standards for both workers and retirees.
As more Singaporeans retire and fewer young Singaporeans enter the workforce, our citizen workforce will start to shrink. This will have implications on our economic growth.
Productivity growth measures the growth in output produced by each worker. Productivity growth is driven by two factors: capital and innovation.
Implications of a rapidly ageing workforce
A rapidly ageing workforce, if not managed well, may lead to a lower level of innovation. Evidence from high-income OECD countries suggests that the median age of the population is negatively correlated with total factor productivity, a measure of productivity growth associated with higher innovation and improving technology.
If the ageing population in Singapore not only leads to a shrinking workforce but also results in lower innovation, it will become even more difficult for us to support productivity and economic growth.
How our Government can encourage older workers, particularly seniors, to stay in the workforce?
It is thus important that the right Government policies are put in place to allow us to leverage on our older workers by first, investing in more elder-friendly technology; second, encouraging continuing education and training; and finally, encouraging our younger workforce to tap on the wealth of experience of our older workers.
How hiring older workers will benefit businesses in our country?
There will be impact on Singapore businesses as well. Companies will have to introduce policies and programme, and formalise strategies, to retain the older workers, as in the long run, they will represent a more important component of our workforce.
By Eunice Li Dan Yue
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