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The workforces of different countries round the world vary considerably in their demographic characteristics. There are some countries, for example, in which only a minority of children can expect to survive to official retirement age; and relatively high mortality in middle age makes for a relatively young workforce. Mortality, of course, is not only reason why people end their working lives at different ages in different parts of the world – and in most developed countries these days mortality has very little to do with it. There are, furthermore, large national variations in the average age of entry into the workforce. As the level of education increases, so does the average age of entry into the workforce. The age composition of national workforces can then be modified by changes in societal norms or governments policies, though – like their size – it also depends a great deal on the background forces of demographic change, especially perhaps on what happens to fertility. Governments can try to redefine the age boundaries of the ‘working age population’ – but fertility remains an independent and major determinant of the size and age structure of the population pool from which the workforce is recruited. Over the next 30 years or so, and as a result of fertility decline, most countries round the world will see more or less parallel shifts not only in the age composition of their working age populations, but also in their size. Governments and policy analysts worry about the impact of these changes on labour supply and workforce productivity – and the knock-on effect on economic growth. If the age boundaries of what society and government regard as the ‘working age population’ remain unchanged, fertility decline will cause these sub-populations, the population pools from which the workforce is recruited, either to stop growing, or to grow more slowly, or to start to shrink. Whether or not the actual workforce will change in the same way (or to the same extent) is by no means clear-cut, however. There are some countries (e.g. Italy) in which a substantial increase in female participation in the workforce, together with an increase in the effective age of retirement (and continuing net inward migration), could completely offset the potential impact of fertility decline on the size of the future workforce – and there are others which will have much less room for manoeuvre in this respect.

Type

Report

Publisher

Oxford Institute of Ageing

Publication Date

01/04/2008