Understanding Singapore’s demographic trends
Researchers from Institute of Policy Studies (IPS) at NUS Lee Kuan Yew School of Public Policy conducted a study on how Singapore could capitalise on the current demographic trend of an increasingly ageing workforce and population, and also examined Singaporeans’ attitudes towards intergenerational transfers of wealth and workplace ageism.
The study was led by Principal Investigator Mr Christopher Gee, IPS Senior Research Fellow, who heads the Institute’s Demography and Family cluster. The research team consisted of Ms Yvonne Arivalagan, IPS Research Associate and Dr Chao Fengqing, IPS Post Doctoral Fellow. Through the study, the team hopes to provide a realistic and balanced perspective on Singapore’s demographic trends, as well as to introduce the idea of social risk pooling.
As the Singapore population ages, the researchers estimated a drag of 1.5 percentage points to annual GDP per capita growth from now to 2060. They projected that by 2080, there will be 91 elder Singaporeans for every 100 working age individuals.
Despite the challenges of an ageing population, the researchers postulated that with longer life expectancies, individuals have vested interest in enriching themselves, particularly in health and education, which should result in improved productivity over potentially longer working lifespans. Singapore’s life expectancy as of 2017 — 80.5 years for men and 85.1 years for women — is among the highest in the world.
Extrapolating the trend, the researchers demonstrated the extent of productive potential available. “There would be 450,000 healthy person years amongst the elderly population in 2030. Just to put that into context, that’s 20 per cent of the workforce today…If you can harness even a portion of that, it can go some way to reduce the effect of the reversing demographic,” said Mr Gee.
The researchers also projected that by 2060, 87 per cent of the working age resident population, as well as 85 per cent of those aged 65 years and above, will have tertiary education qualifications. This represents significant fodder that can contribute to productivity gains for Singapore and improve individual and societal well-being. Other “longevity dividends” can come from savings and investments, and these can be channelled into innovation and technology to boost productivity.
The researchers suggested social risk pooling as an efficient and cost-effective mechanism for mitigating longevity risk, adding that this would require an element of intra- and inter-generational societal solidarity.
The researchers surveyed 2,000 adult Singaporean citizens and permanent residents to gain an insight into generational self-reliance and Singaporeans’ bequest motivations; how the country should finance increased social spending on the elderly; after family, who should care for the elderly; and ageism at work.
A majority of the respondents (41 per cent) believed that generations should be self-reliant. The researchers found that a surprising 38 per cent thought otherwise, and suggested that the disagreement originated from feelings of inter-generational solidarity.
Another unexpected finding was that some 41 per cent of the respondents felt that older generations should not bequeath assets to their young. The researchers proposed that the bequest motivation is perhaps less prevalent than popularly assumed, and that longevity risk could possibly be compelling Singaporeans, especially those belonging to the “sandwiched” generation who have to care for their parents as well as their children, to hoard their assets for their personal retirement. Speaking of the group aged 45 to 64 years, Mr Gee said, “They are contemplating their own post retirement and it sounds like they are worried.”
As for social spending on the elderly, some 40 per cent disagreed with paying higher taxes to fund such programmes, with about 37 per cent of the respondents agreeing to use a larger share of the returns from investing national reserves to finance these programmes. Respondents aged 45 to 64 were more likely to hold these views. This could be due to the fact that individuals in this age group face the highest tax burden and may be experiencing the greatest uncertainty about paying for their own living expenses after they retire.
Help for the elderly should come first from the family with the government a close second, was the view many respondents held. This is at odds with the government’s Many Helping Hands approach, which advocates help from community organisations as a second line of defence after family. Ageism in the workplace resonated with the respondents, of whom 66 per cent believed that employees aged 55 years and above faced age discrimination.
This study was presented on 18 January as a backdrop to Singapore Perspectives 2018 on 22 January.
The research team consisted of (from left): Ms Arivalagan, Mr Gee and Dr Chao
