At 65, auto-technician Tan Ah Kok is one of many older Singaporeans who have opted for an extended career over retirement.
“Working is like sleeping and eating to me, it is a natural part of my life,” says Mr. Tan, as he takes a short break from his duties at a car workshop in Yew Tee Industrial Estate. “I enjoy occupying my time at work and will continue working as long as my health allows me. I can stay fit and earn extra money. If I stay at home the whole day, I will get bored and restless.”
“Although I have two children who are working professionals, I do not want to rely on them,” says Mr. Tan. “It is not as though I am frail and unhealthy now. I can still do my job well and earn my own rice bowl”, he says with a sense of pride.
Like Mr Tan, our older workers today exemplify how ageing can be a positive force for our labour force. Someone who is born today is expected to live up to 83 years old on average. The life expectancy of residents increased by 3 years from 2005 to 2015, and is projected to continue rising. This means that mature workers can contribute longer in the labour force.
More mature workers have been joining the labour force over the last decade. The improvements in our resident labour force participation rate (LFPR) from 20061 to 2015 were largely due to workers aged 50 years and above, as seen from the shaded area in Chart 1 below. The largest increase was seen in the 60 to 64 year old age group. About four in ten residents aged 60 to 64 years old were either working or actively looking for jobs in 2006. This increased to six in ten residents in 2015.
Ageing is often referred to as a ‘silver tsunami’, but is it really so?
By hiring mature workers, companies stand to benefit as younger employees get to tap into a wellspring of experience. For instance, Mr. Tan plays the role of a mentor to two apprentices who often seek his advice on technical matters, ranging from maintenance procedures to improving operation processes.
“I am glad to be able to contribute even at my age” says Mr. Tan. “Being able to teach these youngsters gives meaning to my life, and it brings me great joy to watch them hone their skills. Someday, they will become mentors too and I hope they can pass down my knowledge.”
Instead of being a ‘silver tsunami’, an ageing population presents many opportunities for businesses that are able to capitalise on the strengths of our mature workers.
Even though a larger proportion of mature workers are joining the labour force and working longer, there are limits to how much our labour force size can increase.
Structurally, we are starting to see the effects of slowing local workforce growth. The strong local workforce growth in recent years was supported by continued increases in the size of our working-age population, as well as gains in the LFPR with more women and older residents joining the labour force. However, these effects are expected to taper significantly.
First, the growth of our working-age local population is slowing as a result of our ageing demographics. The size of successive cohorts of younger locals entering the workforce will shrink, and more from the baby boomer cohorts will retire and exit the workforce. In 2015, there were 1.4 locals entering the working-age for every 1 local exiting. This situation reverses by 2030, with only 0.7 entering for every 1 exiting.2
Second, further improvements to the resident LFPR are likely to be muted. Singapore’s LFPR for males is already higher than that of the OECD average as seen from Chart 2a below. While the LFPR for females is slightly lower than some of the developed economies at the older age groups, we have been catching up as policies have been enhanced over the years to support females to re-enter the labour force.
LFPR for males is among the highest internationally, while for females it is catching up with other developed economies
Age-Specific Labour Force Participation Rate (Males)
Age-Specific Labour Force Participation Rate (Females)
The six OECD countries selected are the US, UK, Denmark, Sweden, Japan, and South Korea.
Source: Ministry of Manpower, OECD Statistics
Longevity can be a positive force for the labour force and business, as mature workers work longer and continue to contribute meaningfully at work. However, it cannot fully mitigate the impact of ageing as the size of our labour force will eventually become smaller because of our demographic realities.
If you are a towkay, you need workers to sustain your businesses. Young graduates today want exciting good jobs that match their rising aspirations. As a country, we need a vibrant economy to provide the fiscal resources to support our population needs.
As the saying goes: Time and tide wait for no man. Amid the regional and global competitiveness, Singapore’s economy has to remain relevant and agile to achieve higher living standards for our people. No single strategy will be sufficient. We need to continue to encourage our mature workers to upskill and stay in the workforce. We also need to restructure our economy towards higher productivity and greater capital intensity to offset a slowing workforce growth. The strategies require strong partnership with workers, employers and unions. By acting now, our economy can continue to flourish and we can create good opportunities for Singaporeans even as our population ages and our local workforce growth slows.
1 2005 data unavailable as the Labour Force Survey was not conducted in that year.
2 Projections based on Total Fertility Rate of 1.2 and baseline immigration scenario.